You work hard – very hard. Hours studying in medical school. Even more hours completing school and honing your skills. Countless interviews to land your first job. You sacrifice days, nights, weekends, holidays, and special events to provide your patients with exceptional care. You build your brand and grow your practice. Your hard work pays off. Patients seek you out to care for their chronic wounds. You are skilled at using skin substitutes to treat hard-to-heal wounds that fail to respond to standard treatments.
Everything is going smoothly – until it isn’t. You receive a letter from the Centers for Medicare & Medicaid Services (CMS), Unified Program Integrity Contractor (UPIC). UPIC’s letter states that you are the subject of an audit and investigation related to your use of skin substitute products. You learn that UPIC flagged your claims as part of its fraud prevention initiative because you allegedly billed for skin substitute products and procedures “excessively”. The letter references unspecified billing discrepancies, a post-payment review and provider re-education. It also calls into question your documentation practices and medical judgment, and states that the important care you provided to patients was not medically necessary. The letter concludes with a demand to repay millions of dollars and raises the possibility of revoking your Medicare billing privileges for non-compliance.[1]
You are shocked. What do you do next? You need to contact qualified counsel (such as the authors of this publication, among others). The sooner you retain a lawyer the better, because within roughly two weeks of receiving UPIC’s letter you can expect to receive a letter from CMS in which it formally demands repayment of the money it alleges you received improperly. What’s worse? This demand only accounts for a small fraction of the patients you treated with skin substitute products. You quickly realize that the repayment CMS is demanding here may only be the tip of the iceberg.
The CMS letter will also lay out your options, which include:
- submitting a rebuttal statement;
- repaying the alleged overpayment, in full, within 30 days;[2]
- requesting an extended repayment plan; or
- filing a request for redetermination (i.e., an appeal) in which you challenge the basis and amount of the alleged overpayment.
Which option is right for you? How quickly must you decide? You have 15 to 120 days from the date of the CMS letter to choose how you will respond.
If you do not respond, CMS will act and take a position that is unfavorable to your interests. It is crucial to contact experienced legal counsel, as early as practicable in this process, to understand your rights and preserve your options.
Why Me?
This is the most common question we receive from clients when faced with a government audit and/or investigation. Like most things, the answer to the question is, “it depends”. Enforcement agencies, such as the U.S. Department of Health and Human Services (HHS), Office of Inspector General (OIG), increasingly rely on data mining and data analytics to identify outliers. Common outliers might include:
- billing for skin substitute products and procedures when your specialty is not generally associated with such products and procedures;
- pronounced changes in your billing patterns, regardless of specialty, for skin substitute products or procedures, especially if those changes occur over a short time period;
- a high volume of billing/payment activity relative to similar specialists nationwide or in your particular state or locality (i.e., anything that puts you in the 95th percentile or higher); or
- frequent use of rebates or discounts. Even if these rebates and discounts fit within the Anti-Kickback Statute Safe Harbor, the government may attempt to argue that these rebates and discounts are being offered or accepted to circumvent the prohibition on paying for referrals instead of for a legitimate purpose such as to foster competition and to reduce costs to the government.
The government may also initiate enforcement actions based on a hotline complaint, whistleblower activity, or referral from another federal or state agency. In the course of investigating one entity (e.g., a skin substitute distributor), the government may develop other leads or information that connects surgeons, dermatologists, podiatrists, wound care specialists, nurse practitioners, or other physician assistants to that distributor. Since the government has vast resources, it is able to initiate multiple, related investigations into activities it believes may give rise to fraud, waste, or abuse in the federal health care programs. Such audits and investigations are time-consuming and expensive for providers.
In our experience, many providers make the mistake of failing to respond to the government or responding without first consulting legal counsel. This is a serious miscalculation and can have dangerous consequences. Most providers are excellent clinicians who care deeply about their patients, and keeping them healthy. They may make an occasional mistake in documenting, billing, or coding the medically appropriate items and services they rendered to their patients, but they are not knowingly defrauding Medicare, Medicaid, or any other insurance carrier. Often, providers may be the subject of a government audit or investigation even though they have done nothing wrong. In either case, experienced legal counsel helps providers and/or practice groups navigate interactions with government regulators and can reach resolutions more easily and efficiently.
How Does Experienced Legal Counsel Help Me?
As in our example above, you received a UPIC letter and/or a follow-up letter from CMS demanding repayment of millions of dollars for skin substitute products and procedures you performed for your patients. You smartly retain legal counsel. Here’s what you can expect next:
- A comprehensive review of all communications and correspondence you received from CMS, the Medicare Administrative Contractor (MAC), UPIC, HHS-OIG, or any other government entity to determine the basis of the audit or investigation. We understand government audits and investigations, the government’s legal theories, and its interpretation of applicable laws, rules, regulations, and other guidance materials.
We also understand the power imbalance that exists when government regulators contact providers. In most cases, these regulators know more about you and your practice than they share with you. Armed with this information, they are trained to elicit information from you in furtherance of their audit or investigation. What you share with them, and how you share it, matters.
- The creation of a strategic plan for responding to the government. This strategic plan includes:
- identifying any deficiencies in the communications and correspondence you received, as well as in the stated bases underlying the audit or investigation;
- explaining the issues and discussing the available options with you, including the advantages, disadvantages, negotiating strategies, and applicable timelines;
- identifying and contracting with physician experts who will review your medical records and other supporting documentation for completeness and accuracy to refute allegations that your documentation was inadequate and the services you provided were not medically reasonable and necessary; and
- identifying and contracting with billing and coding experts who will review your claims submissions to refute allegations that you improperly billed or coded the services you provided.
- Drafting and submitting your reply. We draft and submit your written reply, along with any accompanying exhibits, records, and reports to government regulators, or in furtherance of your Medicare appeal. We ensure that the government timely receives these submissions and we serve as the main point of contact for any communications related to this matter on a going-forward basis. This allows you to focus on what matters most – taking care of your patients.
- Ongoing support during the appeals process. The Medicare appeals process consists of five levels:
- MAC Redetermination;
- Qualified Independent Contractor (QIC) Reconsideration;
- Office of Medicare Hearings and Appeals (OMHA);
- Medicare Appeals Council; and
- Federal District Court.
We can handle every stage of this appeal process on your behalf, and we know the process of preserving the legal record for future appeals.
Why it Matters
Medicare Part B pays for skin substitutes based on the number of service units billed at prices ranging from approximately $100 to more than $1,000 per square centimeter. Estimates indicate that Medicare may have paid BILLIONS in the past year for skin substitute products and procedures.
Given the massive increase in Part B expenditures, HHS-OIG and UPIC (among others) are auditing Medicare Part B claims for skin substitutes and investigating providers who perform these services right now to identify and claw back payments at risk for non-compliance with Medicare requirements.
Government regulators are expected to expand their efforts in this area in the coming weeks and months, regardless of whether the release date of the anticipated skin substitute local coverage determinations (LCDs) are delayed. Partner with experienced legal counsel in advance of being audited or investigated or even after you’ve received such notifications. Don’t go it alone. Have a plan and understand your options.
Should you have any questions regarding the above, please contact the authors, the Garfunkel Wild attorney with whom you regularly work, or email us at [email protected].
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[1] Aside from potentially repaying millions of dollars and/or losing your Medicare billing privileges, other possible consequences include criminal prosecution, civil litigation and the imposition of civil money penalties, exclusion from participating in Medicare and Medicaid, administrative sanctions by Medicaid-related entities, or licensure actions by the state health department or medical board.
[2] Interest in excess of 12% starts to accrue on the 31st day and/or CMS withholds payments until it recoups the amount owed.