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American Health Lawyers Association

March 2013

Medicare Claims Appeals:From Audit to OMHA

Donna K. ThielPartnerKing & Spalding, LLCWashington, DC

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The Appeals Process

Original Medicare Appeals Processhttp://www.cms.gov/Medicare/Appeals-and-Grievances/OrgMedFFSAppeals/index.html

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+ Issues Addressed Today

Different Procedures For Direct Challenges To Local and National Coverage Decisions

Different process for Enrollment/disenrollment

Claims, Not Cost Reporting

Medical Necessity Is The Primary Issue Statistical Validity Of Sample

Timeliness of Reopening

Waiver Of Recovery/ABN

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+ Who Denied the Claim?

Pre-Payment Medicare Contractors (MACs)

Providers

Practitioners

DMACs: DMEPOS Claims

Post-Payment MACs and DMACs

Specialty Auditors

RACs ZPICs PSCs

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+ Medicare Administrative Contractors

15 MACs and 4 DMACs for redeterminations.

2 Part A QICs (Maximus - both jurisdictions)

2 Part B QICs (First Coast Service Options and Q2 Administrators)

1 DME QIC (C2C)

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+Specialty Auditors

Zone Program Integrity Contractors

Recovery Audit Contractors

ZPICs/RAC are authorized to conduct audits, interview beneficiaries and providers, initiate administrative sanctions (including suspending payments, determining overpayments, and referring providers for exclusion from Medicare), and refer providers and beneficiaries to law enforcement.

The ZPICs/RAC also are expected to use "innovative data analysis methodologies for the early detection and prevention of abusive use of services, as well as possible fraud, waste and abuse schemes."

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+ZPICs

ZPICs were created to perform program integrity for Medicare Parts A, B, C (Medicare Advantage) D (Prescription Drugs), Durable Medical Equipment (DME), Home Health and Hospice.

When Medicare began the process of moving Part A and Part B intermediaries and carriers into the Medicare Contractor system, CMS also moved the program integrity component of their duties into program safeguard contractors or PSCs. The ZPICs replaced the existing Program Safeguard Contractors (“PSCs”)

The ZPICs are paid by CMS, but unlike the RACs, reimbursement to a ZPIC is not contingent upon any overpayment amounts recovered by the ZPIC.

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+Specialty Auditors: Zone Program Integrity Contractors

ZPICs perform program integrity for Medicare Parts A, B, C (Medicare Advantage) D (Prescription Drugs). The ZPICs replaced the existing Program Safeguard Contractors (“PSCs”)

Reimbursement to a ZPIC is not contingent upon any overpayment amounts recovered by the ZPIC.

ZPICs calculate overpayments based on Statistical Sampling

Seehttp://www.cms.gov/MLNProducts/downloads/ContractorEntityGuide_ICN906983.pdf

Zone 7 is devoted almost solely to Florida, considered a "hot zone" because of a high incidence of Medicare fraud. Other "hot zones" include California and Texas (Houston and Dallas). Zone 2 covers a vast territory of largely western and southwestern states where there has not historically been a high prevalence of Medicare billing issues

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+Overpayment Based on Sampling

Universe: All claims in two year period

Frame: Eliminates cases outside the audit design

Sample Design: How large a sample based on precision/error rate

Sample: Random Selection of Claims

By Beneficiary or By Claim

These claims will be the subject of the appeal

Sample: 31 claims, Claims Denied: 31

Error Rate: 100

Actual Overpayment: $44,155.84

Extrapolated Overpayment $ 5,751,331

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+Recovery Audit Contractors (RACs)

4 RACs- Same jurisdiction as DME MACs

Region A: Diversified Collection Services

Region B: CGI

Region C: Connolly, Inc.

Region D: HealthDataInsights, Inc.

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+Bonus on RAC results

RACs are paid on a contingency fee based on the amount of over and underpayments corrected Contingency Fees Region A -12.45% Region B - 12.50% Region C - 9% Region D - 9.49%

Contingency fee returned if denials are overturned on appeal

RACs are not authorized to investigate fraud but are required to refer possible fraud to CMS

Suspension of Payments

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+The Appeal Process: Part A and Part B

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+Who Decides?

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+Overpayment? Consider Your Repayment Options

If The Claim Is Post-Payment, Denial Will Be Followed By A Demand For Payment

Whether or not you appeal, an Appellant Can: Pay The Amount Due Immediately

Request To Pay Over Time Under An Extended Repayment Plan

Interest Accrues On The Amount Due

Pay through offset/recoupment

If You Do Not Pay, Medicare Will Recoup The Overpayment, Plus Interest, From Current Receivables Unless You Appeal Timely

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Staying Recoupment Pending Appeal

Medicare will not recoup an overpayment if you appeal ‘super’ timely. Section 935(f)(2) of the Medicare

Modernization Act 42 USC 1395ddd(f)(2)

Redetermination: Appeal within 30 days of the notice of overpayment to stay recoupment. Ordinary Appeal deadline for

Redeterminations is 120 days If you lose, you can pay, request an

ERP or appeal to the second level

Reconsideration: Appeal within 60 days of Redetermination to stay the recoupment Appeal deadline for

Reconsideration is 180 days

+Getting Started

Medicare Claims Processing Manual Chapter 29 - Appeals of Claims Decisions http://www.cms.gov/Regulations-and-

Guidance/Guidance/Manuals/downloads/clm104c29.pdf

Once an initial claim determination is made by a contractor, beneficiaries, providers, participating physicians and suppliers have the right to appeal the determination

All appeal requests must be made in writing

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+Requesting an Appeal

A written request must include (at Every Level):

Beneficiary name

Medicare Health Insurance Claim (HIC) number•

Specific service and/or item(s) for which a redetermination is being requested

Specific date(s) of service

Name and signature of the party or the representative of the party

The appellant should attach any supporting documentation to the request for Appeal. See discussion below about establishing the record

A request may be filed on Form CMS-20027

www.cms.gov/Medicare/CMS-Forms/ CMS-Forms/CMS-Forms-List.html

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+Getting Started: Parties Who may appeal?

Beneficiaries, Providers, Suppliers

Physicians and other suppliers who do not take assignment on claims have limited appeal rights

Non-Party Must Submit Authorization Of Representative

42 CFR § 405.910 CMS Form 1696, www.cms.gov/Medicare/CMS-Forms/CMS-Forms/CMS-Forms-

Items/CMS012207.html

Authorization Of Representative is Different than Assignment

Beneficiaries may transfer their appeal rights to non-participating physicians or suppliers who provide the items or services and do not otherwise have appeal rights

Form CMS-20031 must be completed and signed by the beneficiary and the nonparticipating physician or supplier to transfer the beneficiary’s appeal rights.

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Level One: Redetermination

+Level One: Redetermination

Written Request To MAC/DMAC

Must Be Filed In 120 Days From Initial Determination (Denial)

Must Be Decided In 60 Days

Recoupment Can Be Stayed If Appeal Is Filed By Day 30

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+Overpayment Based on a Sample

Keep all claims in the sample together

Note on your pleadings that the cases are part of a statistical sample

Request Documentation on the Sampling Methodology

Hire a Statistician to Evaluate the Sampling

Ensure none of the claims in the Sample have been appealed before

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Level Two: Reconsideration

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+Level Two: Reconsideration

A party to the redetermination may request a reconsideration if dissatisfied with the redetermination.

Written Request to QIC

Written reconsideration request must be filed with the QIC within 180 days of receipt of the redetermination.

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+Reconsideration No monetary threshold

A request for a reconsideration may be made on Form CMS-20033 www. cms.gov/Medicare/CMS-Forms/CMS-Forms/CMS- Forms-

List.html.

If the form is not used, the written request must contain all information noted above PLUS: A copy of the RA or Redetermination

Any additional documentation to address the Decision below

Address denial in Redetermination but do not limit your argument to that decision

Documentation that is submitted after the reconsideration request has been filed may result in an extension of the timeframe a QIC has to complete its decision.

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+Qualified Independent Contractor

The QIC Is A Panel Of Physicians Or Other Appropriate Health Care Professionals

Must Have Sufficient Medical Legal And Other Expertise Including Knowledge Of Medicare Program Only MDs Can Review MD Claims

Reconsiderations are conducted on-the-record If the QIC cannot complete its decision in the applicable

timeframe, it will inform the appellants of their right to escalate the case to an ALJ

Only evidence submitted before the issuance of the QIC decision can be considered in subsequent appeals, unless

good cause is shown for any delay.

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Level Three: Office of Medicare Hearings and Appeals

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+Request for ALJ Hearing

If at least $140 remains in controversy following the QIC’s decision, a party to the reconsideration may request an ALJ hearing

Appeal must be filed in writing within 60 days of receipt of the Reconsideration decision.

Reconsideration decision letter contains procedures for requesting an ALJ hearing. Form CMS-20034 may be used to file a request

Appellants must also send a copy of the ALJ hearing request to all other parties to the QIC reconsideration. (Beneficiary?)

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+Request for an ALJ hearing.

42 CFR §405.1014(a) The request for an ALJ hearing must be made in writing. The

request must include all of the following— (1) The name, address, and Medicare health insurance claim

number of the beneficiary whose claim is being appealed. (2) The name and address of the appellant, when the appellant is

not the beneficiary. (3) The name and address of the designated representatives if any. (4) The document control number assigned to the appeal by the

QIC, if any. (5) The dates of service. (6) The reasons the appellant disagrees with the QIC's

reconsideration or other determination being appealed. (7) A statement of any additional evidence to be submitted and the

date it will be submitted.

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+Requesting an ALJ Hearing

Jurisdictional Elements QIC reconsideration/dismissal/Escalation

Amount in Controversy ($140) (2013)

Timely Request (60 days)

Party standing

Requests for Hearing Send to Centralized Docketing

Copying Parties

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Part A/B Appeals42 C.F.R. §405,

sub I

Part C Appeals42 C.F.R. §422,

sub M

Part D Appeals42 C.F.R. §423,

sub U

+OMHA Locations

Arlington, Virginia (Mid-Atlantic)

Cleveland, Ohio (Midwestern)

Irvine, California (Western)

Miami, Florida (Southern)

HHS OMHA Centralized Docketing200 Public Square, Suite 1260Cleveland, OH 44114-2316

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+ALJ Authority

ALJ Decisional Independence New look at the claim (de novo review)

ALJ is Finder of Fact

Must apply Statutes, Regulations, CMS Rulings, NCDs

Substantial Deference—LCDs, CMS Manuals

Application of LCD, Manual Instructions

Whether Sampling Met CMS Requirements

Liability Issues §1879 Limitation on Liability

§1870 Overpayment Waiver

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+Hearing Request Issues

Aggregating Claims Used to meet the amount in controversy requirement

Confirm

Consolidated Hearings Cases must be before the same ALJ

Evidence Document your submissions at lower levels

Good cause must established for submitting evidence for the first time at the ALJ level (42 CFR §405.1028)

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+Conduct of Hearings

Pre-Hearing Conferences

ALJ Assignment Random Rotation

National Jurisdiction

42 CFR §405.1020 Video-Teleconference (VTC)

Teleconference

In-Person

CMS or Contractor Involvement

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+Decisions Time Frame

Possible Delays

All parties not copied on the request for hearing (§405.1014) Untimely request for hearing (§405.1014) Request for hearing sent to the incorrect entity (§405.1014) Discovery requested (§405.1016, §405.1037) Written evidence is submitted late (§405.1018) Hearing is rescheduled at the Appellant’s request (§405.1020) Appellant has material missing evidence (§405.1030) Appellant waives timeframe (§405.1036) Party request for opportunity to comment on the record

(§405.1042) Consolidated hearing granted at request of appellant

(§405.1044)

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Level Four: Appeals Council

+Appeals Council

ALJ Decision is binding on the parties, unless reopened or Appeals Council decides to review

CMS can refer cases for “Own Motion Review”

If a party to the ALJ hearing is dissatisfied with the ALJ’s decision, the party may request a review by the Appeals Council

Must be filed within 60 days of ALJ Decision

No Financial Threshold

Must specify the issues and findings that are being contested

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Level Five: Federal Court

+Federal Court

Party

Any party to the Medicare Appeals Council decision

Appellant who requests escalation to Federal district court if the Appeals Council does not complete its review of an administrative law judge's (ALJ's) decision within the applicable adjudication period,

Amount remaining in controversy must satisfy the requirements set forth in 42 CFR §405.1006

$1400 for 2013

Timely

60 days to request review

Standard of review: substantial evidence based on the record

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Practice Tips

+Making Your Case

Review Starts with the Premise that something less (or less expensive) could have been done

Rapid Response for Admission or Initiation Patient failed to improve on prior therapy or in a different setting?

Patient sick enough (fragile enough) to require admission, adjuvant therapy, special equipment?

The risks of not engaging the services/items

Treatment has been considered, or tried or ruled out

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+Making the Prima Facie Case

Avoid “Technical Denials”

Audit for any Specialized Documentation You Must have To Establish Coverage Prescription/Orders

Recertification

CMN

Signatures

� Audit for Facts You Must Prove To Establish Coverage Prerequisites Satisfied

Other Aspects of Care Management

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+Challenge of Establishing Medical Necessity

Establish the Link between Payor’s Coverage Criteria and the Clinical Case

Document Severity Illness or Conditions or Comorbidities

Document Intensity Of therapy, Of testing, Of treatment

Document Plan of Care Consistent with Coverage Policy

Explain Deviations from Policy

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+Timing is Everything

Document Patients condition at the time the order was placed

Chronic Illness must be addressed (diabetes, COPD, CHF Immobility do not go away but address implications on a continuing basis (every day!)

Entire record should reflect severity/risk that justifies the treatment continuously

Document Progress (relative to last note) or lack of it

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+Defending Your Claims

• Do Not Assume That The Adjudicator Will Be Familiar With The Relevant Benefit Or Its Coverage Criteria

• Set Out The Relevant Coverage Policy• Medicare Statute, Regulations, Manuals, LCDs, Or NCDs

• Payor Contracts

• Describe your Products • Mechanisms of Action

• Documentation Methods

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+Avoid These Pitfalls

Delay Don’t Procrastinate In Starting The Appeal Process Do Not Put Off Collecting Medical Records For The ‘Next Level Of

Appeal’

Submitting Evidence As If It Speaks For Itself Tell The Story Of Your Services Draft A Cover Page To Be Appended To Each Set of Documents Telling

The Patient’s Story, Referring To Specific Notations In The Record Summarize Critical Elements In The Patient’s Case and Cite to the

Record

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