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)

We may not always have a Medically Unbelievable Denial story to offer every week but this one could not wait until next month. This episode was denied, in part, because “home health care agencies are paid more when they provide more therapy services.”

Read the following carefully before forming your own opinion. Presented are two of the reasons offered by Field Manager Betsy Lulf, of CAHABA Government Benefit Administrators, LLC, for denying payment for services to a patient confined to his home for multiple conditions requiring IV hydration and physical therapy and a host of other treatments.

Reason 1: “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.”

Reason 2: “…home health providers are paid at a significantly higher rate…when more than five therapy visits are covered.”

With regard to Reason #1, the agency responded within 120 days, as required, demanding to know the reasons CAHABA believes the patient’s Medicare number had been used fraudulently in the past. Though CMS PUB 100 -4, paragraph 310.4 (D.) requires that such evidence be made available for inspection by the appellant agency, CAHABA has ignored the request, even though it was made through the Freedom of Information Act.

The agency’s appeals consultant also noted that it is impermissible for a RHHI to withhold payment or even mention other reasons for payment denial without first addressing the evidence for its initial accusation regarding questionable billing practices. Informing CAHABA of this federal requirement garnered no reply.

Reason #2, a mere statement of a general observation about PPS, was not the only statement of its kind in the denial statement. The letter was filled with quotations from Medicare manuals and Social Security legislation, a practice in which RHHIs are specifically requested not to engage.

“The rest of the appeal is full of the customary ramblings, freely citing esoteric sections of the Social Security Act and the Code of Federal Regulations, as if the recipient ought to be fully fluent in the jargon listed,” he said. “The CMS manuals specifically spell out issues that should not be included in a denial letter to a provider, and these are included on that list.”

“I am seeing this more and more often,” the consultant told a RAC Assistance reporter. “I believe the intent is to intimidate with legal language and multiple irrelevant citations from Medicare manuals. If they can scare the small business person out of appealing, their job becomes easier.” CMS instructions to write in colloquial language, aimed at an 8^th grade level, are routinely ignored, he stated.

The appeals consultant also sees in this denial what can only be identified as a “bait and switch” practice. “What will happen in this case, as it does in so many others, is that our appeal will kick the case to the QIC. There, the denial will be confirmed but for completely new and different reasons.”

Over and over again, he explained, the QIC invents clinical reasons to support a denial that was originally administrative. “Then I have to start all over, writing my next appeal on a completely different basis for the same exact case,” he added, with no attempt to hide his exasperation.

If they succeed in this type of intimidation, the consultant explained, the RHHI wins one more denial notch on its belt. “Is this to protect the Medicare Trust Fund or the RHHI’s government contract?” he wonders.

According to NAHC attorney Denise Bonn, the Office of the Inspector General (OIG) and Department of Health and Human Services (HSS) have stated recently that the current 1.4% average denial rate is too low, hinting that if current contractors cannot raise the rate they will find others who can. Certainly, they have the incentive to increase denial activity.

The current environment, of which this case is but one example among thousands, leads some to believe, including the consultant appealing this case, that RHHI tactics are designed to get as much money out of providers with the least amount of fight, regardless of the legitimacy of the claim. “The multiple words and pages are rarely an indication of increased substance in their denial report,” he advises his clients. “Ignore the fluff, go to the heart of the issue, and you often find there is nothing there and the appeal is easily won.”

As a matter of fact, his track record since the recent upsurge in denial activity is nearly 90% success in overturning denials. “Most of them are weak arguments, which the Administrative Law Judges immediately recognize,” the expert stated.

CAHABA Field Manager Betsy Lulf did not identified herself as a clinician in her denial statement, but as an “appeals manager.” Nor did she list the name of any clinical reviewers who may have helped write this review. She did, however, cite a Local Coverage Determination (LCD) to support her denial decision. The problem was that she used an LCD that only applies to CMS region VII providers, yet she was denying payment to a provider in region IX.

Result:
Following the first appeal level, CAHABA decided to down-code the claim and pay it at a lower rate, now citing clinical documentation issues rather than the original reasons. The agency is currently deciding whether the remaining amount is worth further appeals effort. “These down-codes work in the RHHI appeals manager’s favor,” the consultant concluded. “It takes so many resources to appeal claims that in most cases an agency will just take the loss. RHHI goals met.”

In this case, the agency has decided to continue the appeal. The appeals consultant believes the chart has excellent documentation and a strong, measurable physical therapy evaluation. The documenting therapist used industry standard measurements, such as Tinetti Gait and balance, combined with the use of goniometric measurements of the affected leg and made a clear demonstration of progress towards goals in each follow up note.

“The chart paints a clear and compelling story of progress toward goals set on the initial plan of treatment,” he concluded. “Winning back these seven visits will be arduous but quite achievable for the client.”

In an effort to maintain fair and balanced reporting, it is imperative that “Clear as M.U.D.” include RHHI decisions, such as this week’s, from time to time. In future reports, we will shine our light on QIC, ALJ and MAC appeals while waiting for Recovery Audit Contractors, our primary target, to arrive in home care.

We ask all of you who are experiencing payment denials to keep track of the names that arise during these articles as the denials are nationwide. When patterns arise from different judges and review managers, we can come together as a community and learn from each other, we can use our collective voice. If we lock ourselves in silos, we will be overrun, one by one.

This regular feature of the RAC Assistance for Home Care report will present the facts of cases we find and allow the reader to decide whether the government’s decision was justified or CLEAR AS M.U.D.

(Editor’s note: Please be assured that this newsletter’s reporters and editors receive no personally identifiable health information from their sources. All reports are de-identified before we receive them from home care agencies that volunteer them to us. We then triple-check them for HIPAA compliance before publication.)

The patient:
There was never a question that this Congestive Heart Failure patient was homebound and eligible for the Medicare home health benefit. If the Stasis ulcer on her leg was not serious enough to keep her mostly bedridden, her 103-year old, failing heart certainly restricted her ability to get out and about without “considerable and taxing effort.”

The wound was initially measured to be 8.8cm x 4.5cm with 55% necrotic tissue surrounding the wound bed. At the end of a 60-day Medicare payment episode, a second assessment found it to be 6.5cm x 3.5cm with 25% dead tissue. Thus, with her physician directed, home care agency treatment proven effective, the patient’s case manager was able to decrease nursing visits from daily to three times per week approximately halfway through the 60-day PPS episode.

Wading through multiple denial levels
Following payment denial by the agency’s RHHI and confirmation of that denial by the QIC, the agency appealed to the ALJ.

There, the honorable Wanda Zatopa, of CMS ALJ Corps Region Nine, found that the agency “failed to satisfy the requirements for the home health services provided to the Beneficiary in accordance with 42 C.F.R., paragraph 409.42 and the Medicare Benefit Policy Manual, Chapter 7, Sections 30 and 40. Here, although the medical records reveal that the Beneficiary was confined to her home, was under the care of Dr. [Name] at the time the services were rendered, and received the services under a plan of care established and periodically received by Dr. [Name], there is no evidence which indicates that the Beneficiary was in need of skilled nursing care on an intermittent basis or that the care she received was skilled in nature.”

Judge Zatopa’s decision went on to note that the agency’s testimony claimed that wound debridement, with gauze and wet-to-dry dressings, was the skilled nursing procedure responsible for the wound’s significant healing progress. She countered, “the daily skilled nursing notes submitted on behalf of the Appellant fail to indicate that such a skill was performed, and furthermore, there is no documentary evidence to show that the Beneficiary’s treating physician ordered any such debridement as part of the Beneficiary’s wound care regimen.”

Finally, the agency’s representative explained to the judge that, in addition to debridement, nursing staff also cleansed the wound site with a saline solution and applied Silvadene or Aquacel cream. Zatopa’s response, “The ALJ finds that this wound care regimen is a pretty standard way to treat such a wound and accordingly the services provided by the Appellant are not skilled in nature.”

Agency arguments that the 103-year old CHF patient did not have family or friend caregivers available to perform such unskilled care did not sway the judge, who stated that it makes no difference whether a patient is 16 or 90 years old. In spite of testimony that the patient’s bandages were completely saturated by bodily fluids every 24 hours, she asserted there was simply no justifiable reason to perform daily visits during those first 30 days.

According to the appellant agency’s court representative, judge Zatopa went one step further than merely denying payment. Implying but not overtly stating that she suspected the agency performed the daily visits solely for the purpose of driving the episode into the PPS Outlier category, she ordered the agency to produce all of its supply billing records for the episode.

The result: Medicare home care services for this patient, at a cost to taxpayers of approximately $65 per day, have been replaced by institutional care, at roughly four times that cost to the government.

The agency and its consultant have begun to plan the next step, appealing the case to the Departmental Appeals Board. Watch future “Clear as M.U.D.” columns for a follow-up. When submitting comments on this story, please reference “Clear as M.U.D. 2009-001.”