It is becoming apparent that certain cities have been targeted by recently stepped-up CMS efforts to protect the Medicare trust fund from inadvertent or fraudulent overpayments. Wise administrators and owners in non-targeted regions are watching what is going on in Miami, Houston and Los Angeles carefully, learning from the experiences of their colleagues there. Here is one unidentified agency’s story.
With all identifying data removed, here is one representative case in which a home care provider’s Regional Home Health Intermediary initiated a payment denial for services provided to one patient. The agency challenged the initial determination and learned what happens when doing battle with multiple government contractors. This example may or may not be typical of the payment denials you will see in your mailbox. Each RHHI operates slightly differently.
Timeline
- Home Health PPS Episode, 40 days from admission to discharge, fall of 2008. Skilled nursing services for patient with hypertensive heart disease with complicating factors such as lumbago and unspecified hyperlipidemia.
- Claim submitted to RHHI, January 2009.
- Payment denial letter received from RHHI, 3/12/09.
- Agency submitted request for redetermination, 4/23/09, with plan of care and certification, physician orders, nursing notes, OASIS and other records, including medication list.
- RHHI reconfirmed its “unfavorable decision” on 5/21/09
- Agency requested reconsideration, which the RHHI forwarded to its Qualified Independent Contractor (QIC) on 6/15/09.
- QIC rendered a “partially favorable” decision on 8/12/09, including advice that the provider is entitled to further appeal to the Administrative Law Judge (ALJ).
Rationale
The RHHI and QIC did not question whether services were provided by agency nurses. Denial was based on lack of documentary evidence that the skilled nursing visits were “reasonable and medically necessary.” The QIC authorized payment of the first two visits but denied payment for all remaining service, saying the patient had “identified educational needs related to prescribed medication regimen.”
The remaining visits, the QIC document reasoned, “consisted only of assessment and observation of the patient’s chronic conditions with no significant change documented in condition or treatment regimen. Teaching beyond the above two visits was repetitive.” Consultants, attorneys and other experts who live in this world report that QICs rarely if ever overturn an RHHI’s denial. They often create new arguments unrelated to the RHHI’s original denial reason but they do not change the outcome.
Consequences
Nine months after this agency initiated services for this patient, the agency received the decision that it would be paid for two visits, a LUPA episode. Costs had long since been posted, nurses and supervisors and office staff were long since paid. The agency was compensated approximately $200 instead of $2,000 and has to absorb the remaining costs or go through the expense of a court appeal before the ALJ. The QIC, on the other hand, can notch a “partially favorable” decision on its belt. When CMS evaluates this QIC’s overall contract performance, only a detailed examination would reveal that “partially favorable,” in this case as in most such reconsiderations, means “10% favorable.”
Betting against the house
Sooner or later, most Medicare providers will find themselves in the same situation. This agency now faces the decision whether to hire an attorney, or an appeals consultant with attorney-like skills and experience in the Medicare court system, or walk away from an $1,800 payment. It is a gamble many do not have the will to take, even if they believe they are likely to win.
“The RHHI/QIC system counts on that lack of will,” opines one of those above mentioned appeals consultants. Michael McGowan, senior consultant with “Medicare Appeals Development,” a Las Vegas consulting firm, wonders to what extent denial decisions based on weak arguments effectively dare providers to pursue their appeal while betting that they will not.
“If they do carry it to the next level,” McGowan explained, “they usually win. I spend half my life in front of the ALJ and I watch while they reverse the QIC decision about 90% of the time. It is sad that so many providers give up before getting there.”
Motivation, created by the federal contractor payment system, could explain the discrepancy, McGowan believes. RHHIs and QICs are contractors that are paid and scored based on performance, which is measured by how well they protect Medicare funds, and therefore the taxpayer, from inaccurate or fraudulent claims. Their decisions to release or withhold payments are made within that context. Administrative Law Judges, however, are federal employees, who receive a salary unrelated to the decisions they render.
“It is not surprising that the results are what they are, is it?” McGowan concludes. “Contractors paid a bounty make decisions that increase both their commissions and their standing with CMS. Independent judges who make decisions based on the evidence routinely come to completely different conclusions.”
