Source: https://www.lilesparker.com/tag/zpic/
Timestamp: 2019-04-26 00:14:24+00:00

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(April 16, 2018): Chiropractors around the country are again finding their services and claims under intensive scrutiny from Medicare contractors and investigators, despite the fact that only three services even qualify for coverage and payment. Several weeks ago, the Department of Health and Human Services (HHS), Office of the Inspector General (OIG) released its latest critical assessment of chiropractic services currently being billed to the Medicare program. The agency’s report, entitled “Medicare Needs Better Controls To Prevent Fraud, Waste, And Abuse Related To Chiropractic Services,”[i] reemphasizes the OIG’s prior findings that the Centers for Medicare and Medicaid Services (CMS) still lacks appropriate safeguards to prevent the submission and payment of improper, sometimes fraudulent claims for chiropractic services to the Medicare program. This article is intended to highlight the government’s concerns and outline the steps that a provider should take to better ensure that any chiropractic services billed to Medicare qualify for coverage and payment.
At the outset, it is important to recognize that in recent years, CMS and its program integrity contractors have taken a number of steps to elevate the level of scrutiny placed on questionable chiropractic claims billed to Medicare. Nevertheless, the OIG has taken the position that considerable work still needs to be done in order to better protect the Medicare program from fraudulent, wasteful and abusive chiropractic billings. For example, the average improper payment rate for Medicare Part B services has been estimated at between 9.9%-12.9%. For chiropractic services, the improper payment rate has been estimated to be between 43.9%-54.1%. About half of all chiropractic services covered by Medicare were not supposed to be covered. The OIG has estimated that of the nearly $450 million spent by Medicare on chiropractic services every year, between $257 million and $304 million in improper payments are being made every year for chiropractic services.[ii] Over a six-year period, $2.9 billion was spent by Medicare on chiropractic services. Theoretically, this means that at least $1.27 billion was wasted over those six years.
Submit claims for services that never occurred.
Submit claims for services that were medically unnecessary.
Bill for services covered by Medicare but provided other services such as a massage or acupuncture.
Provided services to beneficiaries without a valid license.
Offered incentives to patients to receive unnecessary services.
II. What Solutions Has CMS Tried?
In an effort to spur more detailed documentation, CMS implemented the initial treatment date requirement for claims. This requirement has been more effective than the AT modifier requirement, as 7 out of 8 contractors do check to ensure this requirement is met. In that respect, this is a successfully implemented requirement. However, when audited, this requirement has largely failed due to inadequate documentation. Approximately 86% of all claims that included an initial treatment date did not adequately document the medical necessity of the services provided. Once again, it appears that chiropractors are aware that the initial date is necessary for payment and will include the date regardless of the quality of their documentation.
At the urging of the OIG, CMS has made significant efforts to better educate chiropractors on the importance of proper documentation and which chiropractic services are actually covered by Medicare Part B. CMS has create publications, seminars, and an educational video for chiropractors to learn about services that are covered under Medicare Part B and how to meet documentation standards. Unfortunately, either through lack of provider participation or because of difficulties in accessing the information, this initiative has largely failed. Many chiropractors and beneficiaries remain ignorant with respect to the medical necessity, documentation and coverage requirements of chiropractic services under Medicare Part B. For example, one of the educational videos created by CMS is supposed to educate chiropractors on how to meet documentation requirements. This video only received 8,898 views between December 2015 and January 2017. Even if we were to assume that every view was by a licensed chiropractor (which is highly unlikely), it only reached a fraction of the chiropractors participating in the Medicare program. CMS will likely need to implement more changes that may lead chiropractors to utilize educational resources and improve documentation.
III. Would A Medical Review Threshold or Service Limit Work?
Approximately 61% of private insurance plans that participate in the federal employee health benefits program (FEHBP) cover chiropractic services. Of the FEHBP private insurance plans that cover chiropractic services, there are limits between 10 and 60 services per year, with the average plan limiting patients to 21 chiropractic services per year. The concept of limiting the number of services a beneficiary has been proposed by the OIG in the past, but CMS did not agree with this solution.
A medical review threshold is a limit on the number or cost of services before a review of medical necessity must be completed to continue coverage of future services. CMS states that contractors may set thresholds for the number of services allowed before medical review, but may not limit the number of services provided. There is no CMS-level medical review threshold, but as mentioned earlier 2 of the 8 contractors have already set medical review thresholds. CMS-level medical review thresholds are already in place for out-patient therapy specialties such as physical therapy and speech-language pathology. The threshold for these two specialties is monetary, at $1,920. After a beneficiary reaches $3,700 in physical therapy or speech -language pathology services, a medical review s needed for the beneficiary to continue treatment.
The OIG conducted a nationwide review of the percentage of “unallowable payments” made for three groups of beneficiaries, divided by the number of services received in a calendar year. The first group received 1-12 chiropractic services in a year, 76% of which were unallowable payments. The second group received between 12-30 chiropractic services in a year, of which 95% were unallowable payments. The final group received more than 30 chiropractic services in a year, of which every single payment was unallowable. It is worth noting that the two contractors that had set a medical review threshold had no beneficiaries in the last category. Based on this assessment, HHS-OIG estimates that a threshold for medical review between 12-30 services would have saved Medicare between $95 million and $447 million between 2013-2015. Additionally, that same threshold would have saved beneficiaries between $24 million and $114 million in out-of-pocket expenses over the same period.
Educate beneficiaries on which chiropractic services are and are not covered by Medicare Part B, and encourage beneficiaries to report chiropractors that are providing services that should not be covered by Medicare.
• Subluxation determination based on an x-ray. If a provider has determined that a subluxation is present based on an x-ray,[v] a Medicare contractor will likely take into consideration when the x-ray was taken and how much time has elapsed before a course of treatment was initiated. As discussed in Local Coverage Determination (LCD) L34009 published by Noridian Healthcare Solutions, LLC (Noridian), the contractor requires that an x-ray must have been taken at a time “reasonably proximate” to the start of care. Noridian considers an x-ray to be reasonably proximate to the initiation of care if it was taken no more than 12 months prior to or 3 months following the initiation of a course of chiropractic treatment. Understandably, Noridian will typically allow a chiropractor to base his / her subluxation determination on an older x-ray if a beneficiary’s medical records show that the patient has suffered from a chronic subluxation condition (such as scoliosis) for longer than 12 months AND there is a reasonable basis to believe that the chronic condition is permanent.
• Tissue, tone changes in the characteristics of contiguous, or associated soft tissues, including skin, fascia, muscle, and ligament.
A limited scope of chiropractic services qualify for coverage under Medicare Part B if they are performed by a licensed, qualified chiropractor. Regrettably, CMS still takes the position that most of the various services offered by a chiropractor are “supportive” in nature rather than “corrective.” In other words, CMS considers most chiropractic services to be “maintenance therapy,” which is not covered under Medicare Part B. As maintenance therapy, CMS does not consider most chiropractic services to be medically necessary.
So what chiropractic services ARE covered under Medicare Part B? Frankly, not many. CMS specifically limits Medicare Part B coverage to hands-on manual manipulation of the spine for symptomatology associated with spinal subluxation. Additionally, qualifying hand-held manual devices (where the thrust of the force of the device is manually controlled) may also be used by chiropractors in performing manual manipulation of the spine. Notably, Medicare does not recognize any additional charges associated the use of such a hand-held device.
• CPT Code 98942 (for treatment of all five spinal regions).
When providing chiropractic services that are intended to provide active / corrective treatment, Medicare requires chiropractors to append the claim with an AT modifier. The AT modifier is intended to denote the fact that “Acute Treatment” for subluxation was provided to the beneficiary. If a chiropractor bills one of the three covered codes without an AT modifier, the service will be automatically denied as not medically necessary when the claim is processed by your Medicare Administrative Contractor (MAC).
In most instances, properly coded chiropractic services (limited to 98940, 98941 and 98942) will qualify for payment. Having said that, both CMS contractors and OIG have repeatedly found that just because a claim has been appended with the AT modifier does not mean that the chiropractic services billed were in fact, medically necessary. In multiple audits conducted over the last decade, government reviewers have found that chiropractors have failed to properly document the medical need for services billed to Medicare.
Although Medicare has not placed a limit on the number of chiropractic services that a beneficiary can receive, providers who appear to be billing an excessive number of services will quickly be flagged for medical review by a MAC, a Zone Program Integrity Contractor (ZPIC) or a Uniform Program Integrity Contractor (UPIC). It is essential that you carefully document the medical necessity of any services billed. At present, pre-authorization to confirm the medical necessity of a treatment is only required by two MACs. One contractor sets its threshold for medical review as 12 services per month but no more than 30 services per year. The other sets a threshold of 25 chiropractic services per year.
It is important to keep in mind that under Title XVIII of the Social Security Act, §1862(a)(1)(A), services must be medically reasonable and necessary in order to qualify for coverage and payment. Similarly, Title XVIII of the Social Security Act, §1833(e) prohibits Medicare from paying for any claims that lacks the necessary information to process the claim. Therefore, regardless of whether the determination of a subluxation has been based on an x-ray or a physical examination, a chiropractor must ensure that complete and accurate records of the encounter are taken.
• CMS Medicare Benefit Policy Manual, Pub. 100-2, Chapter 15, Sections 30.5 and 240.
• CMS Medicare Claims Processing Manual, Pub. 100-4 Chapter 12, Section 220.
#1. Family History / Past Medical History.
• Prior interventions, treatments, medications, secondary complaints.
#2. Description of the Present Illness.
• Symptoms causing patient to seek treatment.
• The symptoms should refer to the spine, muscle, bone, rib and / or joint and be reported as pain, inflammation, or as signs such as swelling, spasticity, etc.
• The symptoms documented must be related to the level of the subluxation that has been cited. A statement on a claim that there is “pain” is insufficient.
Finally, the location of a patient’s pain must be described and the symptoms documented must be related to the level of the subluxation that has been cited. Noridian further requires that the location of pain must be described and whether the particular vertebra listed is capable of producing pain in the area determined.
#3. Evaluation of musculoskeletal/nervous system through physical examination.
#4. Diagnosis. The primary diagnosis must be subluxation, including the level of subluxation, either so stated or identified by a term descriptive of subluxation. Such terms may refer either to the condition of the spinal joint involved or to the direction of position assumed by the particular bone named.
• Objective measures to evaluate treatment effectiveness.
#6. Date of the initial treatment.
• System review if relevant.
• Evaluation of treatment effectiveness.
#3. Documentation of treatment given on day of visit. The patient must have a significant health problem in the form of a neuromusculoskeletal condition necessitating treatment, and the manipulative services rendered must have a direct therapeutic relationship to the patient’s condition and provide reasonable expectation of recovery or improvement of function. The patient must have a subluxation of the spine demonstrated by x-ray or physical exam as described above.
It has been more than 20 years since the OIG first identified chiropractic billings as a potential fraud and abuse problem. To their dismay, the AT modifier requirement, initial treatment date documentation requirement, and educational resources have failed to significantly remedy the level of improper claims for chiropractic services being billed to the Medicare program. In light of the OIG’s latest report, chiropractors should expect CMS and its MAC, ZPIC and UPIC contractors to increase their audits of chiropractic claims. Providers should also expect to see oversight through education, medical review, limits to the number of services, and documentation requirements.
What should you do? Get back to basics. When is the last time you compared your medical necessity, documentation, coding and billing practices to those outlined in your respective LCD and the Medicare Benefit Policy Manual.
Need help? Give us a call. Our attorneys are experienced in representing chiropractors in audits and investigations of their Medicaid and private payor claims.
Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Liles Parker attorneys represent chiropractors and chiropractic practices around the country in connection with Medicare, Medicaid and private payors claims audits. We also represent chiropractors in connection with complaints filed against our clients with the State Chiropractic Board. For a complimentary review and discussion of your issues, you can call Robert at: (202) 298-8750.
[i] Department of Health and Human Services, Office of Inspector General. Medicare Needs Better Controls To Prevent Fraud, Waste, And Abuse Related To Chiropractic. A-09-16-02042. February 2018.
[ii] CMS’s Supplementary Appendices for the Medicare Fee-for-Service Improper Payment Reports for 2010–2015.
[iii] In one case, when an audit was initiated against a chiropractic practice, the chiropractor supposedly falsely reported a robbery had taken place and that medical records were stolen from his car. This triggered a fraud investigation that led to a 63-month fraud conviction, over $1 million in restitution, and a 23-year exclusion for the chiropractor.
[iv] Medicare Benefit Policy Manual, Chapter 15, §240.1.2.
[v] Noridian will usually permit a previous CT scan MRI to be used as evidence if a subluxation of the spine is demonstrated.
(April 12, 2018): A big concern with the Medicare appeals process is the ghastly backlog at the Office of Medicare Hearings and Appeals (OMHA) for an Administrative Law Judge (ALJ) hearing coupled with the government’s authority to recoup alleged overpayments after the second level of appeal (reconsideration). There is renewed buzz regarding the backlog and potential recourse given the Fifth Circuit’s decision on March 27, 2018 in Family Rehabilitation, Inc. v. Azar, No. 17-11337, which affirmed the possibility for providers to sue for an injunction to prevent Medicare Administrative Contractors (MACs) from recouping overpayments until administrative appeals are concluded under the collateral-claim exception. But what about the snail-like pace of postpayment reviews at the very beginning of this process? As discussed below, Medicare’s Transmittal 768 may alleviate this continuing problem to some extent.
Before claims are appealable, they have to be denied on review. A major source of massive extrapolated alleged overpayments are postpayment reviews by Zone Program Integrity Contractors (ZPICs) and their successor Unified Program Integrity Contractors (UPICs). Our experience has been that these reviews usually take many months, even years. This is in spite of the fact that providers are required to turn over the requested records in somewhere between 15 and 30 days, maybe even 45 days if the provider requests an extension. The investigators typically remain tight-lipped throughout the review and investigation process. Inquiries about the status of a review are usually met with no response or cryptic feedback like “The review findings will be provided at the conclusion of the review.” In the meantime, providers are expected to sit on their hands. Then one day, a letter arrives which often reflects an unmanageable alleged overpayment figure for the provider and the provider is left to dispute the alleged overpayment through “Medicare’s Byzantine four-stage administrative appeals process” – in the words of Circuit Judge Jerry E. Smith in Family Rehabilitation, Inc. v. Azar.
Please note, however, that this is an internal timeline for the contractors (as between the medical reviewer(s) and lead investigator), meaning that providers should not expect to receive the postpayment audit results within 60 days of having submitted the records to the UPIC / ZPIC. However, Transmittal 768 may be useful to put pressure on the contractors when reviews are pending for months or years on end.
For a detailed discussion of the ZPIC program and process, please see: ZPIC Audits.
Lorraine A. Rosado, J.D., is a Senior Associate at Liles Parker and has extensive experience representing Medicare providers and suppliers around the country in administrative claims audits, suspension and revocation cases. She is also performed a number of IRO reviews in connection with annual CIA reviews by HHS-OIG. Should you have any questions regarding an administrative enforcement action, please feel free to call Lorraine for a free consultation. She can be reached at: (202) 298-8750.
(August 15, 2015): The Centers for Medicare and Medicaid Services (CMS) has awarded the contract for Zone Program Integrity Contractor (ZPIC) services for Zone 6 to SafeGuard Services, LLC. Zone 6 encompasses Maryland, Delaware, Washington, D.C., Pennsylvania, New Jersey, New York, Connecticut, Massachusetts, Rhode Island, Vermont, New Hampshire, and Maine. SafeGuard is the current program safeguard contractor (PSC) in this jurisdiction, and its functions as a ZPIC will be similar to its duties as a PSC. SafeGuard is also the ZPIC for Zone 1 (California, Nevada, and Hawaii) and Zone 7 (Florida).
As the new Zone 6 ZPIC, SafeGuard will be responsible for investigating suspected waste, fraud, and abuse among Medicare providers. ZPICs have the authority to conduct unannounced, onsite inspections of providers’ facilities, perform pre-payment and post-payment reviews of claims, impose payment suspensions, recommend to CMS that a provider’s billing privileges be revoked, and refer providers to law enforcement for investigation. In our experience, SafeGuard is among the most aggressive ZPICs in the country.
Liles Parker attorneys assist all types of providers across the country with responses to Zone 6 ZPIC investigations, audits, and other administrative actions. If you have questions or concerns about a ZPIC investigation, please contact our office for a free consultation.
Liles Parker has offices in Washington DC, Houston TX, McAllen TX and Baton Rouge LA. Our attorneys represent health care professionals around the country in connection with ZPIC audits of Medicare claims, licensure matters and transactional projects. Need assistance? For a free consultation, please call: 1 (800) 475-1906.
I. Will the Government Seek to Pierce the Corporate Veil?
The legal doctrine of piercing the corporate veil allows creditors to reach through the corporate structure and collect their debts from shareholders or similar owners. This doctrine is not unique to healthcare. In fact it is a potential way for all creditors to collect debts from individual entity owners.
Defective Incorporation: If the legal statutory requirements for organizing the corporation or LLC are not met, no corporation exists to shield owners from liability.
Ignoring the Separateness of the Corporation: Entering into contracts and otherwise transacting business variously in a corporate name and an individual name can justify piercing the corporate veil. Commingling corporate and individual assets, transferring assets between the provider and an owner without formalities, or transferring assets between the provider and a sister company, can also suggest the owners did not respect the separate nature of the entity, potentially allowing CMS to pierce the corporate veil.
Significant Undercapitalization: A corporation must have a reasonably sufficient amount of capital to pay its expected debts. Undercapitalization is grounds to impose liability on the owners.
Excessive Dividends or Other Payments to Owners: When owners are actually working for a corporation, they can usually pay themselves fair compensation, as long as it is clearly characterized as salary or wages. However, additional dividends and other non-compensation distributions can only be safely taken out by an owner to the extent the distributions reflect profits. If an owner takes non-compensation distributions exceeding profits, these distributions constitute a return of capital and can give rise to an undercapitalization claim by a corporate creditor. If such distributions are made when the corporation is insolvent, the creditors’ claims against the owner will be almost impossible to defend.
Misrepresentation and other Unfair Dealings with Creditors: Deceptive practices such as dishonesty, false statements to corporate creditors, and asset concealment can make owners liable for corporate debts.
Absence or Inaccuracy of Records: If corporate records are missing or inaccurate, this can form a basis to pierce the corporate veil, especially if they hinder a creditor’s collection efforts against the provider.
Failure to Maintain Ongoing Legal Requirements: Each state’s statutes impose annual franchise fees and report-filing requirements on corporations and similar entities. These usually have grace periods and cure provisions, but if they are neglected long enough the corporation or LLC will legally cease to exist, resulting in owner liability.
In United States v. Bridle Path Enterprises, Inc., a Massachusetts federal district court held the owners of a home health agency personally liable for the provider’s Medicare overpayment debt. The provider, Bridle Path, made payments toward the overpayment until they sold all of their assets to another provider. At the time of the sale, $64,807.84 was outstanding on the overpayment liability. The United States sought to hold Bridle Path’s owners personally liable for the Medicare overpayment, using the piercing the corporate veil doctrine. Due to the number of checks Bridle Path wrote to its owners, their home health agency, and their real-estate holding company, the court found that the owners did not treat Bridle Path as a separate corporate entity and pierced the corporate veil to hold the owners liable for the Medicare debt.
If any of the factors above exist, CMS and its Medicare contractors can seek to pierce the corporate veil of a healthcare provider’s company and collect debts from the provider’s owners. These circumstances are not typical for health care providers and are easily avoided by maintaining personal owner dealings separate from all entity business. Do your practice’s day-to-day operations expose you to unnecessary liability? If your business was assessed a huge fine and forced into bankruptcy, are you 100% confident that you, as the owner, will be free of individual liability? If you have any questions about this or any other health law issue, call 1-800-475-1906 for a complimentary consultation.
The attorneys at Liles Parker, Attorneys & Counselors at Law represent health care suppliers and providers around the country. We specialize in regulatory compliance reviews, Medicare audits, HIPAA Omnibus Rule risk assessments, privacy breach matters, and State Medical Board inquiries. If you have any questions about healthcare provider liability, contact us at: 1 (800) 475-1906.
(January 21, 2014): In a contentious letter to the head of the Centers for Medicare & Medicaid Services (CMS), The American Hospital Association (AHA or Association) has argued that the current two-year backlog in Medicare appeals (totaling more than $1 billion), along with a growing number of claims denials by Recovery Audit Contractors (RACs), have resulted in a serious “detrimental impact” on the Association’s member hospitals. To help alleviate this problem, serious RAC program reforms are needed. In a separate, yet similarly strongly worded letter to Congress, the AHA has shared its concerns with Capitol Hill. The Association is seeking Congressional support in connection with the current appeals backlog. Perhaps most significantly, the Association is urging Members of Congress to pressure CMS to adopt a number of fundamental RAC program reforms to the current recovery audit framework.
The two AHA letters are in response to a recent memorandum from the Department of Health and Human Services (HHS) outlining operational changes to the Office of Medicare Hearings and Appeals (OMHA) system. Effective July 15, 2013, OMHA will temporarily suspend the assignment of most new requests for Administrative Law Judge (ALJ) hearings.
According to HHS, this suspension will allow OMHA and its 65 ALJs to focus on the nearly 357,000 appealed claims for Medicare services and entitlements already in the system. HHS claims that the suspension was “necessitated by a dramatic increase in the number of decisions being appealed” to ALJs, which have grown by 184% since 2010. Due to the current backlog in claims, the agency does not expect the suspension to be lifted for at least 24 months.
As argued by the AHA, the proposed delay is quite significant. The group highlights the fact that these delays “are not only unacceptable, they are a direct violation of the Medicare statute,” which requires that an ALJ issue a decision on the appeal within 90 days of receiving a request for a hearing. Even more, the AHA argues that ALJs’ failure to comply with this statutory deadline is not new.
For example, 94% of hospitals participating in the AHA’s RACTrac survey reported experiencing at least one delay longer than the statutory 90 days. Equally disturbing is the fact that this problem isn’t merely isolated to the third level of administrative appeal. Sixty-six percent of hospitals also reported receiving notification from a Qualified Independent Contractor (QIC), the contractor responsible for handling second level administrative appeals, that the QIC could not make a decision within the 60 days required by the statute.
“…the nearly unfettered ability of RACs to churn out erroneous denials forces [hospitals] to pursue appeals in order to receive payment for medically necessary care, while the inability of OMHA to manage the appeals process within the timeframes required by the Social Security Act holds that payment hostage.” (emphasis added).
The overburdened appeals system may stem (at least in part) from the fact that RAC commissions are based on claims that are “denied” by the contractor BUT no penalties are levied against the RAC if the claims at issue are ultimately found to qualify for coverage and payment. As a result, RAC contractors are arguably incentivized to deny as many high-dollar inpatient hospital claims as possible, regardless of whether or not the RACs’ claims denials are truly non-payable.
While the hospitals’ have experienced a high rate of success when appealing RAC denials, it is important to note that, over 70% of the RAC denials issued by the contractor thus far, have been appealed by member hospitals since the RAC program began and are still pending in the appeals system. The AHA notes that there is currently nearly $1.5 BILLION in appealed hospital claims being held up in the Medicare appeals process.
The Association’s January 14th letter to Marilyn Tavenner, Administrator for CMS, asks that the agency make fundamental changes to Medicare’s claims auditing system. AHA has made several suggestions to help mitigate the detrimental impact that the currently delay is having on hospitals.
· Postponing recoupment for appealed claims should until after the hospital receives an ALJ determination.
· Enforcing the statutory timeframes that ALJ must abide by in issuing appeals decisions by entering a default judgment in favor of the provider if an appeal has not been heard within the required statutory time period.
· Addressing systematic issues with the RACs that lead to avoidable claim denials and appeals and provide a mechanism for erroneous denials to be reversed outside of the appeals process.
· Lowering the alternative dispute resolution (ADR) limit, which would decrease the volume of claims that can potentially end up in the appeals system.
· Enforcing the RAC’s deadline to issue a decision on a claim by denying a RAC its contingency fee for any claim for which it has missed its deadline.
The AHA is asking that Congress encourage CMS to adopt a number of necessary reforms to the national RAC program. The recommended reforms track those set out in the previously introduced Medicare Audit Improvement Act of 2013, (S. 1012 & H.R. 1250). First introduced in March 2013, this proposed legislation currently remains in House and Senate committees.
If the results of the RACTrac survey prove accurate, RAC auditors have unfairly denied thousands of inpatient hospital claims, holding up a significant amount of reimbursement money for hospitals. In many instances, we have seen auditors focusing claims for care provided during a short length in stay where they presume that, if the length of stay is short, the patient likely could have been seen in a lesser intensive level of care. These include outpatient services in a skilled nursing home or through a home health agency. Unfortunately, beneficiaries may not qualify for Medicare coverage in these types of care.
As seen at the ALJ hearing, a number of the RACs’ presumptions regarding the claims at issue have been shown to be incorrect. Unless Congress and / or CMS moves to restrain RACs in their overzealous pursuits, hospitals and other Medicare providers are likely to continue to see increasing RAC audits (and denials) of their Medicare claims. In that case, providers will continue to spend countless dollars fighting to receive payment for the services they have rendered. As both hospitals and physicians can attest, although their administrative appeal of denied claims may ultimately be successful, these providers will have spent significant time and money defending themselves. These appeal activities make it even more difficult to focus on treating our nation’s Medicare beneficiaries.
Should you receive a medical records request for records from a RAC, ZPIC or another CMS program integrity contractor, please feel free to give us a call.
Robert W. Liles, Esq., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law. Liles Parker attorneys represent health care providers and suppliers around the country in connection with Medicare audits by ZPICs and other CMS-employed specialty contractors. The firm also represents health care providers in HIPAA privacy breach matters, state medical board inquiries and regulatory compliance reviews. For a free consultation, call Robert at: 1 (800) 475-1906.
As the Health Integrity educational letter further sets out, there are a number of specific Medicare medical necessity, documentation and other regulatory concerns that are currently under review by the ZPIC.
A. Is the Patient Truly Confined to His / Her Home?
As Health Integrity’s letter states, under Chapter 7 § 30.1 of the Medicare Benefit Policy Manual, a patient’s medical records must accurately reflect that the patient qualified as “homebound” during the specific period under review. Denials based on lack of homebound status are not new – home health agencies should have a solid handle on these requirements by now. Having said that, it isn’t merely enough for a patient to merely qualify as homebound – you and your staff need to fully and accurately document the specific clinical facts which support each patient’s homebound status. Detail is important. Is the patient ever absent from the home? If so, what is the reason for the absence? How long were gone? In consideration of any absences, does the patient continue to qualify as homebound? All of these are important questions to be asked.
If the patient meets one of the criteria in Criteria-One, then the patient must ALSO meet two additional requirements defined in Criteria-Two below.
B. Are Timely, Valid Physician Orders in the Record Which Support the Care Provided?
How was each patient referred to your home health agency for care and treatment? What are the qualifications of the referring physician? Who signed the patient’s “Plan of Care”? When was it received back from the physician? What types of treatment were ordered by the referring physician? Were any verbal orders documented in the record? Have all Orders been signed and dated in a timely fashion? Were all supplemental physicians’ orders signed and dated before the claim was billed to Medicare? If so, identify the orders and list the dates they were signed. Were the services billed properly?
C. Is there a Need for Skilled Care?
Documenting a patient’s need for and receipt of “skilled care” has been a perennial problem for many home health agencies. In most instances, we have found that the agency’s clinical staff has not been properly trained to document skilled care issues. What specific skilled services (e.g. injections, wound care, catheter changes, gait training) were provided to the patient during a particular episode? Ultimately, home health agencies should re-familiarize themselves with Chapter 7 §§ 40.1, 40.2 of the Medicare Benefit Policy Manual.
D. Are “Length of Stay” Issues to be Considered?
Data mining is enormously helpful to the government in identifying home health providers whose business and / or clinical practices essentially make them an “outlier” when compared to the practices of their peers. A patient’s length of stay on service is one of the most common comparisons used by ZPICs when making targeting decisions. Provide a detailed rationale as to why the patient was admitted to / recertified for home health services at the beginning of this episode.
II. Why is Our Home Health Agency Receiving a Health Integrity Educational Letter?
Not all home health agencies in Texas, Oklahoma and the rest of Zone 4 received a copy of Health Integrity’s “Educational Letter” dated November 1, 2013. If your home health agency received a copy of Health Integrity’s letter, it could be based on the fact that your agency has previously received a number of ADR’s, been placed on prepayment review or been subjected to a prior review or one type or another. Alternatively, your home health agency may have been sent Health Integrity’s letter based solely on the ZPIC’s data mining findings. Your agency may be an outlier in terms of its business or clinical statistics. As such, your agency has now been “flagged” by the ZPIC.
(B) documented educational intervention has failed to correct the payment error.
Both fundamental fairness and a plain reading of both the underlying statute and CMS guidelines require that Medicare overpayment auditors (including Health Integrity) have justification before beginning a statistical sampling of a provider’s Medicare claims. If the auditors could select anyone for audit without cause, the administrative burden on providers would be extraordinarily high. Therefore, the justification for a high error rate or failed education must be based on evidence that exists before the sample is selected. In light of the “Educational Letters” recently sent to home health providers by Health Integrity, the ZPIC will now be free to seek extrapolated damages since they can now allege that continuing problems were not corrected through educational intervention.
III. How Should Our Home Health Agency Respond to Health Integrity Educational Letter?
If your agency has received a Health Integrity Educational Letter, one option would be for you to just take the information in stride, remind your staff of their regulatory obligations and hope for the best. A more affirmative approach would be to review your practices and ensure that the concerns set out in Health Integrity’s letter are not problems in your organization. Should you find that deficiencies are present, remedial action should immediately be taken and any overpayments must be immediately refunded to Medicare. While the specific approach taken by your home health agency in responding to Health Integrity’s concerns will differ from one organization to another, we believe that it is imperative that all recipients review their practices to help better ensure that Medicare’s regulatory requirements are being met.
Robert W. Liles serves as Managing Partner at Liles Parker, Attorneys and Counselors at Law. Our firm represents home health agencies and other health care providers around the country in connection with ZPIC enforcement actions, prepayment reviews, postpayment audits, and a wide range of other regulatory matters. Should you have any questions or concerns regarding your home health agency, please give us a call for a free consultation: 1 (800) 475-1906.

References: §1862
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