“Clear as M.U.D.” presents actual stories of payment denials that appear on the surface to be difficult to explain. Fiscal Intermediaries and QICs are supposed to deny or recoup payments when a service to a patient appears to be a Medically Unbelievable Claim. On occasion, this can result in what we call a Medically Unbelievable Denial.
This Clear as M.U.D. saga is titled, “I’m OK. You’re OK. Your Patient, We’re Not So Sure About.”
Prologue
This newsletter is collecting stories like the one below, in an effort to explore the validity of recent informal accusations suggesting the organizations charged with making sure Medicare home health care providers obey the rules may be breaking their own rules in the process. If, after reading this short narrative, you are reminded of any similar incident within your experience, please share it with us, anonymously if you wish. Your story may be our next “Medically Unbelievable Denial.”
The Medicare-certified home health care agency we will call “As Honest As the Day Is Long Care” (AHADLC) has been serving elderly patients in a metropolitan area for nearly 15 years. Joint Commission accredited, AHADLC enforces strict company policies with every member of its staff. Never once has any government body or competitor accused agency owners of any intentional violation of the rules under which Medicare providers operate.
Unfortunately, AHADLC operates in a region that is known to have more than its share of home health operators that were not formed to serve patients but solely to generate Medicare claims, using any method that works. There are stories throughout the area of physician kickbacks, cash payments to beneficiaries for use of their Medicare number and even lists of beneficiary names and numbers available for sale. There is a well-known pattern of sham agencies opening and closing and opening again under different names in rapid succession.
Frequently in such communities, a Medicare beneficiary who once accepted cash under the table in exchange for his or her Medicare number eventually develops a need for actual home health care services by a real nurse or therapist. They usually wind up with a legitimate provider since they know their previous “agency” did not actually employ any nurses and, even if it did, it is no longer in business, at least not under the same name.
The Payment Denial
This is the environment in which AHADLC conducts its legitimate home health care business, which is why it is not surprising that the following events occurred. In fact, they happen regularly.
At the end of one typical, 60-day Medicare PPS episode, AHADLC submitted a claim in good faith to its RHHI for services that included both nursing and physical therapy and amounted to approximately $4,000. The RHHI, in this case Cahaba Government Benefit Administrators, immediately denied payment.
The key word is “immediately.” When a denial arrives this soon after claim submission, it can only be the result of a computer edit. No person can examine and adjudicate millions of claims this quickly. In fact, Cahaba’s initial denial letter admitted as much, explaining that the denial was the result of a “5HCBA computer-generated code.” The denial letter explained 5HCBA thus:
“The Medicare health insurance number (HIICN) has been identified as being utilized in questionable billing practices. Based upon this, it appears services were not provided as billed. The beneficiary is not responsible for payment of this claim.
Only one interpretation is possible. Cahaba computers are set to presume guilt by association, coded to assume that a tainted beneficiary — whether or not that beneficiary knew her Medicare number had been abused — will never again in her life require legitimate health care. Think of it as a teenager ticketed for speeding while driving your car. If Cahaba were in traffic enforcement, you would get a speeding ticket every time you started up that car. Of course, you would also receive a polite letter explaining your right to contest the tickets in court.
Because this patient’s number had been flagged as having been used by a criminal in the past, Cahaba’s computer determined that the current services were not legitimate, probably not even provided. Naturally, AHADLC exercised its right to demand a redetermination.
Note: NGS uses the same edit to deny payments but refers to it as “5DHOB.“ We have not yet come across first-hand experience of Palmetto using the practice.
The Appeal
In its response to the 5HCBA denial, AHADLC argued that its RHHI is presuming fraud and denying payment without requesting and analyzing pertinent medical records, conducting interviews with beneficiaries or performing other standard program safeguard contractor activities. For good measure, the agency requested copies of any and all information Cahaba used to reach its conclusion, reminding the RHHI that CMS PUB 100 -4, 310.4 (D.) requires the contractor making the payment denial (RHHI) to make such evidence available for inspection by an appellant upon request.
In one carefully worded paragraph, the agency made its demands clear:
“Pursuant to CMS publication 100 -4, section 310.4 and under the Freedom of Information Act, we request the information utilized in determining that fraudulent or questionable billing practices have taken place. Denial of payment, without first addressing the accusations made by the fiscal intermediary, is fully inappropriate and can only be considered to be capricious and arbitrary in nature.”
The Unlawful Redetermination
Not only did Cahaba’s reply, bearing the signature of one Betsy Lulf, break the law by ignoring AHADLC’s documentation request, it also appeared to have forgotten all about computer edit 5HCBA, the original reason payment was denied. Now the reason for denial had suddenly morphed into “missing physician certification” for eight PT visits.
The agency’s CFO and owners were understandably left scratching their heads. “Of course there was no medical documentation submitted,” they told each other. “The initial denial was not for a medical reason. We were accused of nothing more than providing services to someone who had fallen in with a criminal in the past. Why would we have provided medical charts with our request to review a 5HCBA denial?” Follow-up calls and letters requesting the documentation, reminding Cahaba that CMS rules require it to do so, receive no reply.
Stay Tuned
This story has not yet ended. The next legal step for the agency is to demand a reconsideration from Cahaba’s contract partner, Maximus Federal Services, a Qualified Independent Contractor (QIC). As we have reported in the past, QIC reconsiderations agree with the initial RHHI determination slightly more than 99% of the time, calling into question their purpose for existing.
After receiving its inevitable QIC denial, which, as frequently occurs, may introduce new denial reasons unrelated to the first two, the agency will be able to present its case to a judge, where the evidence is fully explored and 80% to 90% of denials are overturned.
More than a $4,000 payment for one episode is at stake for this agency. The denial described in this story is the tip of the iceberg. It was one of six 5HCBA denials in a batch of 11 claims submitted together in the same transmission. In the last two years, this agency’s 5HCBA denials average an astounding 16% of all claims submitted. Every one is eventually overturned at the ALJ, and yet they keep coming.
We will continue to follow this “Clear as M.U.D.” case as it develops. AHADLC is currently preparing to deliver its request for reconsideration to Maximus.
Post Script
Everyone is familiar with a standard insurance industry practice. Deny payment for a service, even if the claim is legitimate, and reverse the decision if the covered customer takes the trouble to challenge it. Customers will avoid the agony of fighting an insurance company often enough to make the cost of the extra personnel needed to conduct the practice worthwhile.
When working with your staff or an outside appeals consultant to understand an illogical payment denial, remember that Medicare is essentially an insurance plan and it is insurance companies that win contracts to serve as RHHIs. Do they issue spurious denials in the hopes that many will go unchallenged? Getting an answer to that question is the reason RAC Assistance for Home Care wishes to hear your stories.
There are many ways to prepare your agency to withstand illogical attacks such as the one described in this story. One of them is to learn the rules under which your RHHI is required to operate. At times, it can be useful to cite one of their rules in order to demonstrate your familiarity.
One place to acquire that information is Chapter 3 of the Medicare Program Integrity Manual, titled “Verifying Potential Errors and Taking Corrective Actions.” It is available as a PDF document but it is 112 pages. Here is one excerpt you may find useful someday. We will print other selections from time to time.
3.11.1.10 – Track Appeals
(Rev. 71, 04-09-04) Track and consider the results of appeals in your medical review activities. It is not an efficient use of medical review resources to deny claims that are routinely appealed and reversed. When such outcomes are identified, take steps to (1) understand why hearing or appeals officers viewed the case differently than you did; and (2) discuss appropriate changes in policy, procedure, outreach or review strategies with your regional office. (emphasis added)
