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.”
November 15th, 2012
By Douglas J. Jorgensen, DO, CPC, FACOFP
If you disagree with a Medicare payer’s audit findings, you may appeal (see Exclusions on Medicare and Limitations on Payment, 42 C. F. R. Part 405, Subpart I). This is important because if Medicare successfully prosecutes you for fraud, you may face civil monetary penalties of $10,000-$15,000 per occurrence; and, if fraud is proven you also lose any protection you may have had under the statute of limitations.
The five levels of Medicare Appeals are:
Level 1: Redetermination (no minimum monetary limit) – You must appeal and request a redetermination in writing within 120 days of notification. If you do not request a redetermination within 30 days, Medicare will begin withholding moneys from your current accounts receivable (A/R), and could begin notifying the beneficiary’s secondary and tertiary payers.
Level 2: Reconsideration (no minimum) – You must submit a request for reconsideration in writing within 180 days of the redetermination’s failure notification. Sixty days from notice of failure to succeed at the Level 1 redetermination, Medicare will begin withholding A/R to settle what is “owed” for the alleged overpayment, and will begin notification of secondary and tertiary insurers.
Level 2 appeals are conducted by a qualified independent contractor (QIC). In a QIC, a panel of physicians uses its clinical experience to consider the medical, technical, and scientific evidence on record to assist in a final determination.
You must provide a clear explanation of why you disagree with the audit findings and its supporting evidence and/or documentation. Failure to present the evidence now may make it inadmissible when needed during subsequent appeals.
Level 3: Administrative Law Judge (ALJ) (minimum amount is $130 for 2012) – If the provider fails the first two levels, an ALJ hearing is set that’s typically done via teleconference. Request for an ALJ hearing must occur in writing within 60 days from notification of a failed reconsideration. Sometimes, the ALJ will hear evidence on the case(s) in question more globally; sometimes he or she will want to go over each case, one by one.
Specific reasons why the defense disagrees with the Level 1 and 2 findings, cogent arguments, and expert witness testimony at this level is helpful because the ALJ will often seek clarification from the expert why the provider documented a certain way, or may ask the expert to explain why the defense disagrees with the first two levels of appeal. Medicare may not show up, and instead let the evidence from the redetermination panel and reconsideration QIC stand on Medicare’s behalf.
Level 4: Medicare Appeals Council (MAC) (no monetary minimum) – The MAC review occurs in the Departmental Appeals Board of the federal U.S. Department of Health & Human Services (HHS). To advance to this level, you must provide a written objection within 60 days of the ALJ decision.
Your objection must clearly outline and explain specifically what elements of the ALJ decision you oppose. The MAC limits appeals to those in writing (no teleconferences), unless the provider does not have legal counsel (which is ill-advised, especially at this level).
Level 5: Federal Court of Appeals ($1,350 minimum for 2012) – To proceed to this level, you must appeal in writing within 60 days of the MAC determination.
Fact findings, written interpretations, or rules are deemed conclusive if they are supported by substantial evidence. At this level, the argument must be clear and well documented. Legal counsel and representation are strongly encouraged.
See “The Medicare Appeals Process: Five Levels to Protect Providers, Physicians, and Other Suppliers” for more information.
October 10th, 2012
Providers and suppliers of health care services and supplies to Medicare Parts A and B beneficiaries will pay contractors more in interest for unrecouped overpayments and delinquent unrecouped underpayments in the fourth quarter of 2012. (more…)
July 26th, 2012
According to the U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG), the Centers for Medicare & Medicaid Services (CMS) failed to collect at least $332.1 million in Medicare overpayments identified during a 30-month period including years 2007, 2008, and the first six months of 2009. (more…)
June 1st, 2012
Influenced by the opinion of the American Hospital Association (AHA) and state and regional hospital associations, CMS recently announced that it is revising its alleged overpayments demand letter sent to health care providers under the Medicare Recovery Audit Contractor (RAC) program.
(more…)
December 30th, 2011