Health Care Compliance Watch : New York Health Care Compliance Lawyer & Attorney : Ilana Sable : NY Physician Representation Law

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.

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All medical pracites participating in and submitting medical bills to the Medicare program must comply with the following documentation requirements:

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

These requirements are especially important when providers receive Additional Documentation Requests (“ADR’s”) from Medicare contractors or are subject to an audit. It is important to note that, 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. Moreover, now that Medicare’s RAC program has been extended to each state, ensuring that your medical practice is compliant with Medicare’s documentation requirements is an absolute necessity.

In addition to Medicare and Medicaid, medical practices must be mindful of documentation requirements imposed by their specific state as well as insurance carriers.  Accordingly, when evaluating a practice’s medical records and medical documentation, providers are encouraged to conduct internal audits and investigations, and identify corrective actions that promote compliance with all of the administrations and agencies that regulate medical practices.

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On June 4, 2010 the U.S. Department of Justice announced the recovery of $2.85 million dollars from three New York City ambulance companies – SEZ Metro Corp., SEZ North Corp. and Big Apple Ambulance Service Inc. – to resolve false claims made to Medicare under the False Claims Act (“FCA”). The FCA gives the federal government (as well as private citizens) a cause of action against those who submit false claims to the government by and through its various agencies and/or departments. In this case, the Justice Department alleges that the ambulance companies used, or caused the use of, false records to appeal a large scale Medicare program refund demand.

Under Medicare rules, ambulance companies can lawfully bill the Medicare program for non-emergency transports only if a patient cannot be transported by any other means. Here, Medicare audited the ambulance companies past billings – audits that can go as far back as seven years under some circumstances – and concluded that the ambulance companies had charged Medicare tens of millions of dollars for ambulance trips that did not meet the standards required by the Medicare rules. When Medicare demanded a refund the ambulance companies proceeded by disputing Medicare’s decision through the Medicare appeals process and, in support of their appeals, submitted false claims by causing hundreds of forged letters purported to come from health care providers that attested to the need and medical necessity of the non-emergency ambulance transports.

This action was originally filed by a whistleblower – a private citizen who was the former financial officer for one of the ambulance companies – under the qui tam provision of the false claims act. The qui tam provisions permit private citizens to file suit on behalf of the United States and share in any recovery. Here, the former financial officer’s share of the settlement will be $618,450.00.

It is unclear whether the original Medicare audit that prompted this case was a product of Medicare’s recently instituted Recovery Audit Contractor (RAC) program.

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