If you receive a letter from a Medicare recovery audit contractor (RAC) regarding overpayment, don’t panic! You may think you only have two options: pay up or launch an appeal. There is another option, however, if you move fast (before a formal appeals process starts) and are certain the RAC is mistaken about the overpayments.
According to David M. Vaughn, JD, CPC, of Vaughn & Associates, LLC, “42 CFR 405.374 allows the provider at least 15 days for an informal rebuttal before the formal appeal process starts. The typical RAC letter will state that you have 15 days to informally respond prior to the time the RAC submits its results to the Medicare administrative contractor (MAC), who then issues the formal demand letter. So the first step in the process is to quickly figure out why the RAC is incorrect, and advise it within 15 days; and if you are correct, the RAC will correct the audit mistakes and reissue a revised letter to you and the MAC.”
Section 405.374 “Opportunity for rebuttal,” states:
(a) General rule. If prior notice of the suspension of payment, offset, or recoupment is given under § 405.372 or § 405.373, the Medicare contractor must give the provider or supplier an opportunity, before the suspension, offset, or recoupment takes effect, to submit any statement (to include any pertinent information) as to why it should not be put into effect on the date specified in the notice. Except as provided in paragraph (b) of this section, the provider or supplier has at least 15 days following the date of notification to submit the statement.
(b) Exception. The Medicare contractor may for cause:
(1) Impose a shorter period for rebuttal; or
(2) Extend the time within which the statement must be submitted.
Vaughn, who has defended several RAC audits, said, “All the ones I’ve defended did have the 15 day limit in their letter. I have used it successfully once, where the RAC made a mistake denying over $100,000 in services as ‘services not rendered’ when the real issue was that the incident-to rules weren’t followed, but the services should have been allowed in the name of the NP. They reversed that component of the audit before submitting the demand letter to the MAC. In that case, I actually called them and got an extension of the 15 days, and they granted it. I then submitted our position in writing, and they agreed.”
“RACs are fairly inaccurate—unlike the ZPICs [zone program integrity contractors], which are much more accurate in my experience—so I think the rebuttal process can be a good tool with the RACs, not ZPICs,” according to Vaughn.
Michael D. Miscoe, Esq., CPC, CASCC, CUC, CCPC, CPCO, CHCC, founding partner of Miscoe Health Law, LLC, said that in his experience, mostly with ZPICs, “I would generally use rebuttal ONLY when the client intended to pay, but there was concern about blind acceptance of the audit result leading to allegations of knowledge of the error down the road.” Miscoe’s bottom line is:
- “Providers should weigh (with the advice of counsel) the expense vs. the benefits of attempting a rebuttal rather than a formal appeal. Engaging in this process is more likely to be successful in response to a RAC audit with obvious errors.
- In cases where the provider chooses not to appeal when faced with a minimal refund demand (as in a probe audit), the rebuttal process is a mechanism for putting your objections to the audit findings on record. That way, mere payment cannot be construed later as agreement (and knowledge as in False Claims Act (FCA) context) with the audit result.”
March 26th, 2013
Best practices dictate that providers should appeal any claims believed to be wrongfully denied, but if your practice has received a string of claims denials for certain Medicare Part B services rendered to skilled nursing facility (SNF) patients in the past 18 months, you may just need to sit back and wait. The Centers for Medicare & Medicaid Services (CMS) and your Medicare administrative contractor (MAC) are already at work identifying all claims erroneously denied because of a claims processing issue in the 2012 annual update of the HCPCS codes for SNF consolidated billing. (more…)
September 26th, 2012
A recent appeals court ruling upholds Medicare regulations that give recovery auditors the right to reopen claims paid one to four years previous. Auditors need only good cause to reopen such claims and, per Medicare regulations, a good-cause determination cannot be challenged, the court said. The implications of this ruling have industry experts worried.
September 12th, 2012
Providers and suppliers of health care services and supplies to Medicare beneficiaries will pay contractors more in interest for unrecouped overpayments and delinquent underpayments in this second quarter. The Treasury Department recently notified the U.S. Department of Health & Human Services (HHS) that the private consumer rate has changed.
April 27th, 2012
The U.S. Department of Health & Human Services (HHS) wants providers and suppliers who receive funds under Medicare to return overpayments within 60 days. Specifically, overpayments would have to be reported and returned by “60 days after the date on which the overpayment was identified; or any corresponding cost report is due, if applicable,” according to a notice of proposed rule-making (NPRM) in the Feb. 16 Federal Register. (more…)
February 29th, 2012