Mediare Appeals: Providers Are Entitled to See the Medicare Contractor's Documentation Concerning Statistical Sample

Providers facing Medicare "recoupments" that are based on alleged overpayment calculations taken from a "statistical sample" are entitled to receive a copy of the Medicare contractor's sampling documentation and records.  These documents and records must be sufficient for the provider to recreate the sampling frame and to mount a due process challenge to the statistical validity of the sample.  

In the Case of Global Home Care, Inc., the Medicare Appeals Council declined to review an Administrative Law Judge’s decision that set aside the extrapolation of an overpayment where CMS or its contractor did not produced documentation requested by the provider necessary to recreate the sampling frame.

This is a critical decision for providers who need to recreate a "Statistically Valid Random Sample" or other extrapolation conducted by CMS or one of its contractors in order to fully review and analyze a notice of overpayment.

LEARN: To learn more about Medicare and Medicaid audits, order a complimentary copy of Ilana Sable, Esq.’s book “A Physician’s Guide to Increasing Revenue and Surviving Payor Scrutiny in the Reformed Health Care Market ” and learn about a proven plan and system for facing auditors.

ACT: If a Medicare or Medicaid auditor contacts you, or if you receive a notice of overpayment, you have a very small window of time to act and to preserve your legal rights.  Protect yourself and your practice by getting the advice you need and enforcing your legal rights in a timely manner.

CONTACT: Health law attorney Ilana Sable, Esq. at (800) 976-4904 to learn more about your legal rights and the options immediately available to you 

Are Your Properly Coded Medical Bills Being Denied in Violation of Current Procedural Terminology Guidelines?

Are your properly-coded medical bills being denied by commercial insurance with instructions (often verbal) to resubmit the claim using an improper Current Procedural Terminology (CPT) code or an improper combination of CPT codes.  For instance, often times a commercial insurance carrier will deny a medical bill that uses an appropriate “bundle” code and will wrongfully instruct the provider to resubmit the medical bill using a combination of codes that the bundle code is meant to represent.  Another example is where a commercial insurance carrier instructs a provider to use a code(s) that is less-descriptive of the services provided than the code that was originally provided.

In many cases, the insurance carrier’s demand to resubmit the claim using the improper code(s) will result in a lower overall reimbursement amount (taking into account subsequent denials, such as denials for codes that cannot be billed together for the same visit, etc.) and are a violation of CPT guidelines.  

If you’ve notice a pattern of improper “re-code and resubmit” denials that result in an overall decrease in the amount reimbursed for your medical claims, you can formally challenge these improper denials with the insurance carrier (internally) and with its governing authorities (externally).

For more information on the rights and remedies available to health care providers dealing with insurance carrier reimbursement issues, order a complimentary copy of my book - "A Physician's Guide to Increasing Revenue and Surviving Payor Scrutiny in the Reformed Health Care Market" - or contact me at (800) 976-4904.

Are Your Practice's Medical Claims Being Paid At A (Wrongfully) Reduced Rate of Pay Due to An Insurance Carriers Internal Credentialing Error?

I just obtained a Thirty Thousand ($30,000.00) Dollar adjustment-payment for one of my clients after a local “employee benefit plan” wrongfully began processing the physician’s claims at a “not participating” rate of pay.

This particular benefit plan’s rate of reimbursement is higher for “participating providers” and an internal credentialing error caused the physician’s claims to be reimbursed at a substantially reduced rate for more than six months.  My client was credentialed as a “participating provider” for many years with the benefit plan when – without authorization – the benefit plan unilaterally and wrongfully changed the physician’s profile within its system to “not participating.”  My client tried for months to have the benefits plan's internal error corrected but my client’s requests were wholly ignored while the benefit plan continued to reimburse his medical claims at a reduced rate of pay.

This alleged “credentialing error” is one of the many schemes that insurance carriers use to wrongfully reduce a medical providers rate of reimbursement for medical claims.  Often times, providers don’t notice the reimbursement error for months (or longer) while the insurance carrier continues to wrongfully reduce it rate of reimbursement and absorbs the difference.

If you have had a similar experience, please share your story in the comments section below this post.  I would love to hear from you! 

For more information on the rights and remedies available to health care providers dealing with insurance carrier reimbursement issues, order a complimentary copy of my book - "A Physician's Guide to Increasing Revenue and Surviving Payor Scrutiny in the Reformed Health Care Market" - or contact me at (800) 476-4904.


Following my post titled “Audit Defense-Part I: Monitoring Your Practices Medical Records,” I received several questions and comments concerning a medical practice’s best use of its medical records to fight audits, investigations or reviews. My answer is that the best course of defense is a medical practice’s “offensive” maintenance of clear, well-established, medical records and documentation.

Medical necessity, in terms of medical records and documentation, evaluates whether the services, tests and/or treatment provided to a patient were reasonable and necessary under the circumstances presented. When government and private payors evaluate medical necessity they use Current Procedural Terminology codes (“CPT Codes”) and International Classification of Diseases Diagnosis and Procedure Codes (“ICD Codes”) to conduct their reviews and audits. The CPT Codes and ICD Codes guide payors in determining whether the services provided to the patient were (a) furnished for the diagnosis, direct care and treatment of the patient’s medical condition and (b) compliant with the standards for good medical practices. 

There is no standard definition for medical necessity. For this reason, there is no single, foul-proof, approach to fighting a payor challenge based on “medical necessity.” However, most government and private payors use some variation of the definition used by Medicare and Medicaid (found in the Social Security Act), which reads:

Notwithstanding any other provision of this title, no payment may be made under Part A or Part B for any expenses incurred for the items or services - (1)(A) which… are not reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member…]

Moreover, all medical practices participating in and submitting medical bills to Medicare and Medicaid, among other federally funded programs, must comply with Medicare’s documentation requirements, as follows:

  • There must exist sufficient documentation in the provider’s records to verify that the services were provided to eligible beneficiaries;
  •  Medicare’s coverage and billing requirements must be met (including that requirement that the services be reasonable and necessary); and
  • Services must be provided at the appropriate level of care and must be coded correctly.

These requirements are especially critical when providers receive Additional Documentation Requests (“ADR’s”) from Medicare contractors or are subject to an audit.  Upon request by a Medicare contractor (including a Recovery Audit Contractor), medical documentation must be submitted within forty-five days of the date of the request. If the provider (a) fails to submit documentation or (b) provides insufficient documentation for the services billed, Medicare takes the position that that there is no justification for the services or level of care billed and will either deny the claim or consider any prior payment an “overpayment” and request that the provider repay the amount previously paid on the claim. 

For more information on medical records and documents, please click here and here to review prior posts on this subject.

Providing Midwifery Services As Part of Your Obstetrics Practice: Benefits and Compliance Considerations

Obstetrics practices located in New Jersey and New York can increase revenue and efficiently allocate a substantial portion of their daily patient care by incorporating the services of certified midwives and/or certified nurse-midwives into their practices. Generally speaking, midwives are certified to attend to low risk pregnancies, attend during childbirth and to provide post partum care. Certified nurse-midwives may prescribe certain drugs, as authorized by the licensor-states and as outlined in their governing collaboration and/or affiliation agreements with a supervising physician.


In New Jersey, in order to provide patient care, “certified midwives” are required to enter into a written affiliation agreement with a New Jersey licensed physician who holds hospital privileges in operative obstetrics/gynecology. The affiliation agreement must set forth clinical guidelines that will outline the certified midwife’s scope of practice.


In New York, “licensed midwives” are required to establish and maintain a collaborative relationship with (i) a licensed physician who is board certified as an obstetrician-gynecologist by a national certifying body, (ii) a licensed physician who practices obstetrics or (iii) a hospital that provides obstetrics through a licensed physician having obstetrical privileges at such institution. The collaborative relationship must provide for consultation, collaborative management and referral to address the health status and risks of his or her patients and must include plans for emergency medical gynecological and/or obstetrical coverage.


As with other non-physician practitioners (“NPPs”), obstetrics practices can issue medical bills to commercial payors, Medicare and/or Medicaid for services provided by certified midwives and certified nurse-midwives. Depending on the method by which the midwife services are billed to the insurance carrier (i.e., using the name and national provider identifier (“NPI”) number of the midwife versus the name and NPI of the supervising physician’s as “incident to” the services provided by the physician) the midwife services, on average, will be reimbursed at a rate similar to that which would be paid if the services where performed by a physician. 


The “midwife” license is only offered in a small number of states (New Jersey and New York offer the midwife license). Because these services are payable and reimbursable by insurance carriers and they offer obstetric practices the opportunity to treat patients in an efficient, cost effective, manner without actively utilizing the time and supervising physician(s).

New Jersey "Health Care Professional Responsibility and Reporting Enhancement Act" Provides Immunity for Entity-to-Entity Employee Reference Requests

A persistent concern for many health care entity-employers (“Entity-Employers”) is retaliation from a disgruntled former employee after the Entity-Employer responds to a “reference request” with negative, albeit truthful, information about the former employee. Often times, the Entity-Employer will choose not to respond to the reference request or will omit key information found in the former employees personnel file in the hopes of avoiding future conflict or retaliation (usually in the form of a lawsuit).  However, the State of New Jersey found any failure to report on the part of Entity-Employer to be a danger to patient safety and welfare and, accordingly, enacted the Health Care Professional Responsibility and Reporting Act (“HCPRREA”) in response.

In New Jersey, pursuant to the HCPRREA, Entity-Employers are prohibited from, among other things, withholding certain information about current or former employees from other health care entities that request information. Entity-Employers are further provided with immunity from civil liability for reporting employment related information to another health care entity. 

In Senisch v. Carlino, et. al., 2011 N.J. Super. Lexis 211 (Decided December 1, 2011 Superior Court of New Jersey, Appellate Division), the Appellate Division upheld a finding that, pursuant to HCPRREA and related case law, Entity-Employers are immunized from civil liability for reporting to another health care entity if said reporting complies with the HCPRREA’s provisions.

In Senisch, Plaintiff was a physician assistant formerly employed by Defendant Deborah Heart and Lung Center (the “Cardiology Center”). Plaintiff had been terminated from his employment with the Cardiology Center because of stated deficiencies in his performance. When Plaintiff attempted to obtain different employment the new employer sought a reference from the Cardiology Center. The Cardiology Center responded to the request with negative information from the personnel file of Plaintiff.

The Appellate Division affirmed the trial court’s findings and held that:

[The HCPRREA] … prohibits health care entities from withholding certain information about current or former employees from other health care entities that request the information. The relevant parts of the Act state:

a. A health care entity, upon the inquiry of another health care entity, shall truthfully:

. . . .

(2) provide information about a current or former employee's job performance as it relates to patient care, as provided in this section, and, in the case of a former employee, the reason for the employee's separation.

. . . .

c. A health care entity, or any employee designated by the entity, which, pursuant to this section, provides information in good faith and without malice to another health care entity concerning a health care professional, including information about a current or former employee's job performance as it relates to patient care, is not liable for civil damages in any cause of action arising out of the provision or reporting of the information.

Accordingly, the Appellate Division concluded that the Defendants could not be held liable in a civil lawsuit for responding to a reference request with negative information from the personnel file of Plaintiff. 

Circumventing Exclusion from Insurance Carrier Networks: A Formula for the Fraudulent Practice of Medicine

Health care providers who have been excluded from participation with certain insurance carriers often approach me for guidance concerning their options (if any) for continuing their existing relationships - and possibly treatment – with patients who are insured by the “excluding” insurance carrier. While the reasons for “exclusion” are quite varied and have differing degrees of severity (depending on the particular insurance carrier and type of exclusion that is involved), in almost all cases, exclusion from network participation means that the excluded provider cannot treat patients insured by the excluding insurance carrier, whether directly or indirectly. Provider arrangements made to circumvent exclusion may, among other things, be deemed the “fraudulent practice of medicine” and may carry serious, permanent, consequences for both the excluded provider and any provider assisting the excluded provider with the circumvention.

In the Matter of Josifidis v. Daines, 2011 NY Slip Op 7891 (decided November 10, 2011, Appellate Division, Third Department) the Third Department confirmed a determination of the Hearing Committee of the New York State Board for Professional Medical Conduct (the “Committee”) which, among other things, revoked the medical license of Petitioner Harry Josifidis (the “Excluded Provider”) for the fraudulent practice of medicine. In doing so, the Third Department confirmed the Committee’s finding that the Excluded provider circumvented “his exclusion from insurers’ networks by using another physician’s name.” 

The relevant facts underlying the Third Department’s decision are as follows:

“[The Excluded Provider] was excluded by certain health insurers from being reimbursed as an in-network provider for treatment rendered to their insureds as the result of a prior disciplinary action. [The Excluded Provider] thereafter entered into an agreement with another physician (hereinafter the other physician) by which the other physician’s name appeared on claims submitted to the insurers for [the Excluded Provider’s] treatment of in-network patients.

The Excluded Provider, in an effort to “explain” the legality of the circumvention arrangement, argued that “he relied on the other physician’s representations that their arrangement was ‘lawful and appropriate’” and that “he entered the agreement to provide his patients with continuity of care rather than for profit.”

The Third Department concluded that “[s]ubstantial evidence in the record shows that [the Excluded Provider] repeatedly submitted bills in the other physician’s name for services he had provided in order to receive payment from insurers who had specifically excluded him from being reimbursed for such services…. Accordingly, [the Third Department found] that the Committee properly rejected [the Excluded Provider’s] explanation and substantial evidence in the record supports its determination.”

Five Levels of Appeal Available for Medicare RAC Overpayment Determinations

Providers, physicians and other suppliers who receive unfavorable overpayment determinations by Medicare Recovery Audit Contactors (“RACs”) for services and supplies provided to Medicare beneficiaries under Part A and Part B have up to five levels of appeal available to them.  This process is exactly the same for all providers, physicians and suppliers who want to appeal a Medicare claim decision.  The five levels of appeal are as follows:



1.         Redetermination is performed by the claims processing contractor

2.         Reconsideration is performed by the Qualified Independent Contractor (QIC)

3.         Administrative Law Judge (“ALJ”) Hearing

4.         Appeals Council Review

5.         Final Judicial Review (Federal District Court Review)


First Level of Appeal: Redetermination

A redetermination is an examination of a claim by Medicare processing contractor personnel (i.e. Fiscal Intermediary; Medicare Administrative Contractor) who are different from the personnel who made the initial determination. The appellant (the individual filing the appeal) has 120 days from the date of receipt of the initial claim determination to file an appeal. A minimum monetary threshold is not required to request a redetermination.


Second Level of Appeal: Reconsideration

A party to the redetermination may request a reconsideration if dissatisfied with the redetermination.  A Qualified Independent Contractor (“QIC”) will conduct the reconsideration. The QIC reconsideration process allows for an independent review of medical necessity issues by a panel of physicians or other health care professionals. A minimum monetary threshold is not required to request a reconsideration.


Third Level of Appeal: Administrative Law Judge Hearing

If at least $130.00 remains in controversy following the QIC’s decision, a party to the reconsideration may request an Administrative Law Judge (“ALJ”) hearing within 60 days of receipt of the reconsideration. Appellants must also send notice of the ALJ hearing request to all parties to the QIC reconsideration and verify this on the hearing request form or in the written request. The amount in controversy threshold for as of 2010 is $130.


Fourth Level of Appeal: Appeals Council 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. There are no requirements regarding the amount of money in controversy. The request for Appeals Council review must be submitted in writing within 60 days of receipt of the ALJ’s decision, and must specify the issues and findings that are being contested.


Fifth Level of Appeal: Judicial Review in U.S. District Court

If at least $1,300.00 or more is still in controversy following the Appeals Council’s decision, a party to the decision may request judicial review before a U.S. District Court Judge.  The appellant must file the request for review within 60 days of receipt of the Appeals Council’s decision.  The amount in controversy required to request judicial review is increased annually by the percentage increase in the medical care component of the consumer price index for all urban consumers.  The amount in controversy threshold for 2011 is $1,300.


For more information about the Medicare Appeals process, please see the Medicare Appeals Process brochure (pdf) issued by the Department of Health and Human Services, Centers for Medicare and Medicaid Services.

Employing Non-Physician Practitioners: Benefits and Compliance Considerations

Traditionally, it was only “doctors” that provided medical care to patients – likely with the help of some sort of unlicensed assistant – and doctors would, therefore, limit their billing (and revenue) to the services that they, individually, provided. In recent years licensed and/or certified non-physician practitioners (“NPP’s”) have begun to provide an increasing amount and variety of medical care to patients and, accordingly, increase the amount of reimbursement and revenue to health care practices that utilize the services of an NPP.

The regulations and statutes regarding NNP education, scope of practice, supervision and training are primarily based on state laws and, in many ways, differ from state to state. The designation and variety of NPP’s also vary from state to state, but, generally speaking, NPP’s can be categorized as follows:

  • Advanced Practice Nurse
  • Certified Registered Nurse Anesthetist
  • Clinical Nurse Specialist
  • Clinical Psychologist
  • Clinical Social Worker
  • Nurse Midwife
  • Nurse Practitioner
  • Occupational Therapist
  • Physician Assistant
  • Physical Therapist
  • Speech Pathologist
  • Surgery Assistant

Billing and Reimbursement for Non-Physician Practitioner Services

Reimbursement received by health care practices for services provided by NPP’s varies substantially among federal, state and commercial payors, and should be thoroughly evaluated prior to submission of medical bills. For instance, Medicare will reimburse for services provided by certain NPP’s in private physician practices when:

(1) The bill for NPP services is submitted using the NPP’s own name and national provider identifier (“NPI”) number. The NPP is reimbursed at eighty-five (85%) percent of the Medicare physician fee schedule.

(2) The bill for NPP services is submitted using the supervising physician’s NPI as “incident to” the services provided by the physician. The NPP’s services will be reimbursed at One Hundred (100%) percent of the Medicare physician fee schedule. Further, if covered NPP services are furnished, then services and supplies furnished incident to the NPP’s services may also be covered.

In order for a health care practice to submit a bill to Medicare for NPP services provided “incident to” the services of the supervising physician, the following criteria must be met:

(a)   The NPP services must be performed under the direct supervision of the physician as an integral part of the physician’s personal in-office service (this does not mean that each occasion of an incidental service performed by a NPP must always be the occasion of a service actually rendered by the physician.

(b) There must be a direct, personal, professional service furnished by the physician to initiate the course of treatment of which the service being performed by the NPP is an incidental part, and there must be subsequent services by the physician of a frequency that reflects the physician’s continuing active participation in and management of the course of treatment;

(c)   The supervising physician must be physically present in the same office suite and be immediately available to render assistance if that becomes necessary;

(d) Also, a physician might render a physician’s service that can be covered even though another service furnished by a NPP as incident to the physician’s service might not be covered.

In practice, this translates to the following criteria:

(1) The supervising physician initially sees the patient (or sees the patient at a previous visit) and initiates the plan of care that the NPP is carrying out.

(2)The supervising physician remains involved in the patient’s care and continuously documents this involvement in the patient’s medical record.

(3)The NPP is an employee and/or independent contractor associated with the physician practice.

(4)The supervising physician (or another physician of the physician practice) must be in the medical office at all times that the NPP provides services and must be immediately available to intervene in the patient’s care if medically necessary.

Commercial payors, on the other hand, are free to set their own policies and guidelines for credentialing NPP’s and providing reimbursement for their services. Some commercial payors are willing to credential NPP’s and allow NPP services to be reimbursed using the NPP’s own provider number or instruct physician practices to bill for services provided by the NPP under the supervising physician’s provider number as “incident to” the services provided by the supervising physician. Other commercial payors simply refuse to reimburse for services provided by an NPP altogether. It is also important to note that a health care practice may be able to negotiate the reimbursement rate provided by certain commercial carriers for services provided by NPP’s.

Additionally, federal, state and commercial payors each have unique restrictions and guidelines concerning an NPP’s ability to examine and treat new patients, patients with new or worsening conditions, and so forth. Accordingly, health care practices should always request and keep on file each payor’s written policy concerning qualification, billing, coding and reimbursement of NPP services.  

What Are The Benefits Of Using A Third Party Medical Billing Company?

Over the past few years health care providers have reported an increasing surge in the outsourcing of medical billing and collections  to third party medical billing companies.  The outsourcing surge stems from a number of factors, most of which are focused on increasing revenue and surviving payor scrutiny.  

First, health care providers rely on medical billing companies to assist them with processing claims in accordance with applicable rules, regulations, laws and statutes (“health care laws”).  With the increasing complexity of the health care industry, the demand for familiarity with health care laws can be overwhelming for health care providers and will often require the education, knowledge and skill of an independent professional.

Second, health care providers are increasingly consulting with medical billing companies to provide them with timely and accurate advice regarding reimbursement matters and overall business decisions.  Medical billing companies normally support a variety of providers and organizations with different specialties and, therefore, have a unique insight to reimbursement issues, as well as diagnosis and procedure code utilization and optimization.  The critical component is a medical billing company’s ability to conduct practice-to-practice comparisons and data mining of coding, billing and collection patterns.

Third, medical billing companies normally have professionals dedicated to specific specialist and/or process areas, thereby increasing employee efficiency, skill and knowledge within the assigned area.  For instance, professionals skilled in collecting unpaid cardiology claims will have the benefit of uncovering and monitoring payor patterns of rejection and denial, and will have the insight to determine which coverage determinations are worth fighting or which coding practices to alter.  

Fourth, in most cases a medical billing company will consistently provide clients with customized practice reports and analytics that offer an in depth look at key metrics an allow the provider to make informed, strategic, decisions concerning billing, coding and collections.  While most of this data and analysis can be conducted in-house, is often underutilized or overlooked altogether with small physician practices. 

Finally, another issue that small physician practices face with in-house medical billing is hiring, training and maintaining an adequate medical billing staff.  Normally, small physician practices allocate one to two designated staff members for medical billing and collection purposes and suffer the consequences of insufficient and inefficient staff in the form of timely filing issues, timely appeal issues, lack of follow up and collections, contractual allowances and, ultimately, write offs.

It is important to note that third party medical billing companies significantly vary in terms of the type of services provided and the manner in which these services are provided for their respective clients. For example, some medical billing companies provide coding services for their clients, while others only process pre-arranged Superbills that have already been coded by the provider.  Additionally some medical billing companies offer a spectrum of management services, including patient intake support, accounts receivable management and debt collections. 

The main question to consider when determining whether to use an in-house medical billing professional or to outsource to a outside medical billing company is “what are you coding and billing, and why?” If the answer to this simple question is not supported by customized practice reports and analytics, strategic and informed, decisions concerning the coding, billing and collections choices made for each patient, and driven by the voluminous rules, regulations and statutes affecting health care practice, then the answer is flawed and is likely costing the practice critical revenue.