Audit Strategies What’s the Best Way to Handle TPE or UPIC Audits

1. Audit StrategiesWhat’s the Best Way to Handle TPE or UPIC Audits Denise Leard, Brown & Fortunato Matthew Fischer, Florida Healthcare Law Firm Wayne van Halem, The van Halem Group

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3. Targeted Probe and Educate (TPE) • Launched on October 2, 2017, after short CMS pilot • Impacts all providers across all lines of business • Goal is to improve the claim payment error rate and reduce the volume of appeals through claim review and education • CMS touts a more “provider-friendly” approach, but appeal backlog is a big consideration in all auditing programs because of AHA court case requiring CMS to resolve appeal backlog. • CERT Errors, along with claim data analysis, are a big driver of who and what gets audited in TPE • Items or services with high national error rates are considered a financial risk to Medicare

7. TPE Process

8. TPE Updates • TPE 10-Claim Preview Pilot • MACs to select 10 claims for TPE Round 1 for review • If compliant with all 10 claims, the PTAN will be exempt from reviews for roughly one year • If errors detected, suppliers will go through TPE process • For Phase 2 and 3, claims will be chosen based on date of service, not date of submission. • Allow 45 – 56 days between each education intervention and the next round for the provider/supplier to improve

9. TPE Challenges • Consistency across reviewers and jurisdictions • MACs identify new reasons for denials • Manual wheelchair home assessment • Oxygen liter flow in the medical records • Chronic stable state • Outpatient – must be in CSS • Inpatient – Is considered CSS when being discharged (requires testing within 2 days) • PAP Recertification Issue • Claims with ABNs • Edit based claim denials

10. TPE Challenges • TPEs are done by code and codes with similar requirements are not grouped together • Some data analysis issues • Suppliers receiving TPEs on products they don’t bill a significant volume of • Inconsistency of curable errors and only 5 calendar days to respond • Error rate calculations on secondary claims are not using estimated copay portion in calculating the error rate

11. TPE Challenges – Failing Round 3 • CMS may refer to UPIC for a more aggressive audit, which sometimes results in: • Payment Suspensions • Extrapolated Overpayment • 100% Prepayment Review • CMS may recommend review by RAC • CMS could exercise their revocation authority

12. Revocations • Under authority of the ACA, CMS can and will deny or revoke enrollment of entities and individuals that pose a program integrity risk to Medicare for the following: • “… providers and suppliers that have a pattern and practice of billing for services that do not meet Medicare requirements. This is intended to address providers and suppliers that regularly submit improper claims in such a way that it poses a risk to the Medicare program.”

13. Proving a pattern or practice

14. Language from results letters • “Should you continue to fail to meet these requirements as described in this letter, your billing privileges may be revoked on this basis or any of the bases articulated in Per 42 CFR §424.535(a).”

15. TPE Response Strategies • Appoint a primary contact • Establish a rapport (when possible) with the reviewer • Educate staff on process (what to expect and what to look for) • Review current process for submitting claims on identified codes • Checklists for intake, billing and delivery staff to ensure all requirements met at each stage • Verify modifiers to be appropriate • Revisit LCDs/NCDs to be sure you understand and are meeting coverage criteria and guidelines

16. TPE Response Strategies • Organize packets in a logical and consistent manner • Review documentation prior to submission • Track audits and error rates • Appeal and track outcomes

17. Pre-Payment Audits

18. Pre-Payment Audits • Cash flow stops • At a minimum it will be 60-90 days before released

19. Pre-Payment Audits • What are the steps in the pre-pay audit review process? • The provider submits the claim, electronically or hard copy, to the DME MAC (Medicare Administrative Contractor). • An Additional Documentation Request (ADR) letter is sent to the provider. • The claim is reviewed by the medical review nurse and a determination on whether to pay or not is made. • An Explanation of Benefits (EOB) is provided to the provider.

20. Post-Payment Audits

21. Post-Payment Audits • Re-allocate resources • Can result in overpayment request for money already spent • Devastating effect on company

22. Post-Payment Audits • Claims previously paid are audited. • The process starts with a written notice and a request for review of a sample of the health care provider's medical records.

23. Post-Payment Audits • Valid statistical random sample • Statistical sampling and extrapolation of the sample results to create an overpayment. • This approach allows the auditor to perform a minimal review that can yield maximum results. • Often results in allegations that a Medicare provider has been astronomically overpaid. • Statistical sampling and extrapolation of the sample results are used to establish an error rate. • This error rate is then applied to the “universe” of claims made by a provider in a given time period.

24. Post-Payment Audits • Federal statute requires that before using extrapolation to determine overpayment amounts to be recovered by recoupment, offset or otherwise, there must be a determination of sustained or high level of payment error, or documentation that educational intervention has failed to correct the payment error. • The determination that a sustained or high level of payment error exists is not subject to administrative or judicial review.

25. Post-Payment Audits • The contractor may determine that a high level of payment error exists based on the following (which is non-inclusive): • error rate determinations by MR unit, PSC, ZPIC or other area • probe samples • data analysis • provider/provider history • information from law enforcement investigations • allegations of wrongdoing by current or former employees of a provider or provider • audits or evaluations conducted by the OIG

26. Post-Payment Audits • There are certain procedures that a contractor must follow to arrive at a probability sample. • Basically, the sample must be statistically valid, and the contractor must maintain documentation on the sampling method followed.

27. Post-Payment Audits • The records are reviewed by the reviewer who then makes a determination whether payment for the services were medically necessary and reasonable. • A letter with an explanation of its findings, which usually involves a calculation of the amount that was deemed to be “overpaid” will be sent to the provider.

28. Post-Payment Audits • Medicare requires the health care provider to re-pay this overpayment amount, and CMS has the authority to recoup this amount if the health care provider does not successfully defend itself during the appeals process.

29. Post-Payment Audits • The date the provider receives the demand letter usually starts the appeals clock. • At the conclusion of each stage of the appeals process, the provider receives a written notice explaining the outcome of that stage and its appeal rights.

30. Payment Suspensions & Law Enforcement Referrals

31. The UPIC’s Purpose and Toolkit • Primary Goals and Function of UPICs: • Identify and investigate suspected cases of fraud, waste and abuse • Perform medical review • Share vulnerabilities, leads and concepts with other contractors • Take administrative action to protect federal program monies • Recap of the UPIC Toolkit: • Pre / Post Payment Review • Statistical Sampling / Extrapolation • Payment Suspensions • Law Enforcement Referrals

32. Suspected Fraud, Waste and Abuse? • Fraud takes many forms • Billing for supplies not provided • Billing that appears to be a deliberate application for duplicate payment for the same service • Altering claim forms, medical documentation, claim records, etc. • Soliciting, offering or receiving a kickback or bribe • Completing certificates of medical necessity for patients not personally and professionally known by a provider • If found, a UPIC is authorized to take all appropriate administrative action and even refer to law enforcement

33. Payment Suspensions: The Basics • May be used if: • Reliable Information that an overpayment exists (even if the amount is not determined) • Reliable Information that the payments to be made may not be correct • Reliable Information that a request for records or other essential information to determine the amounts due was not furnished • In the event of a credible allegation of fraud • Two Types of Suspensions • Fraud Suspensions • General Suspensions

34. Fraud Suspensions • Examples • Forged signatures or pattern of false documentation submitted • Law enforcement have subpoenaed records or executed a search warrant • Individual indicted by a federal grand jury for fraud or theft • Process • Inform the assigned Business Function Lead (BFL) of the potential suspension • Submit a suspension request via the Fraud Investigation Database (FID) to CMS Center for Program Integrity (CPI) for review and if approved, notice is sent • Timing • Up to 360 days • May go beyond 360 if DOJ or OIG submit a written request for extension

35. General Suspensions • Examples • Reliable information an overpayment exists or that payments to be made may not be correct • Failure to furnish records or other information • Process • Similar to fraud suspensions • Requests discussed and sent to CPI and if approved, notice is sent • Timing • Up to 360 days only • Can continue beyond if transitions to a fraud suspension

36. Suspension Effects on Multiple Jurisdictions • If the same tax identification is used, suspensions apply to all jurisdictions where its used • Doesn’t matter if a general or fraud suspension • The UPIC that requests is the lead contractor that informs the others but all contractors can take administrative action in their respective jurisdiction • Contractors are recommended to hold monthly calls to discuss their efforts and findings

37. Opportunity for Rebuttal • You receive a suspension notice. Now what? • No appeal rights • File a rebuttal • Your opportunity to respond to a suspension decision • Rebuttal rights will be stated in the suspension notice • Must be submitted within 15 days (able to request an extension for more time to respond with good cause) • UPIC will consult with CPI and respond

38. Claims Review and Termination • Claim Review During a Suspension • Processing does not stop but only the payments • Withheld until the matter is resolved (without interest) • Typically reviewed on a prepayment basis • Suspension Terminations • The UPIC will recommend termination to CPI via the FID prior to the expiration date and notice will be sent • Amount withheld will be applied to any overpayment first and the excess going to the supplier

39. Law Enforcement Referrals • When the UPIC has documented allegations of suspected fraud • Examples • A pattern of improper billing • Improper claims submitted with suspected knowledge of their falsity • Improper claims submitted with reckless disregard or deliberate ignorance of their truth or falsity • Dollar amount or subject matter doesn’t matter • To Who? • OIG • DOJ/FBI • State Regulatory Agencies

40. Referral Process • Submission of Referral Packages • OIG has 60 days to accept or decline • DOJ or other agencies have 45 day to accept or decline • During the submission period the UPIC will monitor the situation and not take any additional administrative action but can with CMS approval • If accepted, the UPIC will work with law enforcement to establish evidence • If declined or no response is received, the UPIC may implement more administrative action and continue to collect data with the option to resubmit additional referrals at a later date

41. Response Strategies for Suspensions and Referrals • Suspensions • Submit a rebuttal • Garner congressional support • Contacted by Law Enforcement • What’s contact? • LE Agents interview employees, patients or physicians • LE execute a search warrant at your office • Receive a Civil Investigating Demand or Grand Jury Subpoena • Retain legal counsel

42. Future Expectations • Known Problems with Contractors will Continue • Broad authority to conduct investigative activities • Many lack industry specific regulatory expertise • Use improper citations to support adjustments • History of unreasonable denial rates and lack of accountability for decisions • Inaccessibility of contractor medical record reviewers • Overly burdensome documentation requests • Factors that invite UPIC and/or law enforcement scrutiny • Patient or physician complaints • Supplier sells a type of product that is currently under government scrutiny • In the eyes of the UPIC, a supplier’s billing patterns are different from the patterns of similarly situated suppliers • Unsolicited cold calling, aggressive marketing tactics, kickbacks, etc.

43. Questions??? Denise Leard, Brown & Fortunato dleard@bf-law.com Matthew Fischer, Florida Healthcare Law Firm matt@floridahealthcarelawfirm.com Wayne van Halem, The van Halem Group wayne@vanHalemGroup.com