AMARILLO, TX – Two weeks ago, I wrote an article discussing the multiple arrests of individuals who were involved in selling orthotics (mostly back braces) based on telehealth encounters. According to the Department of Justice April 9, 2019 Press Release, in addition to the arrests, “the Center for Medicare Services, Center for Program Integrity (CMS/CPI) announced today that it took adverse administrative action against 130 DME companies that had submitted over $1.7 billion in claims and were paid over $900 million.”
The Press Release further stated: “The Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity (CPI) is proud to work very closely everyday with our law enforcement partners to stop exploitation of vulnerable patients and misuse of taxpayer dollars,” said Deputy Administrator and CPI Director Alec Alexander. “In this case CMS has taken swift administrative action and has suspended payments to 130 distinct providers thereby likely preventing billions of additional dollars in losses.”
As foretold by the Press Release, CMS (through its contractors) is now sending payment suspension letters. For example, a suspension letter recently received by a DME supplier states, in part:
The purpose of this letter is to notify you of our determination to suspend your Medicare payments in all jurisdictions pursuant to 42 C.F.R. § 405.371(a)(2). The suspension of your Medicare payments took effect on ________ __, 2019. Prior notice of this suspension was not provided, because giving prior notie would place additional Medicare funds at risk and hinder our ability to recover any determined overpayment. See 42 C.F.F. § 405.372(a)(3).
The decision to suspend your Medicare payments was made by the Centers for Medicare & Medicaid Services (CMS) through its Central Office. See 42 C.F.R. § 405.372(a)(4)(iii). This suspension is based on credible allegations of fraud. CMS regulations define credible allegations of fraud as an allegation from any source including, but not limited to, Fraud hotline complaints, claims data mining, patterns identified through audits, civil false claims cases, and law enforcement investigations. Allegations are considered to be credible when they have indicia of reliability. See 42 C.F.R. § 405.370. This suspension may last until “resolution of the investigation” as defined under 42 C.F.R. § 405.370 and may be extended under certain circumstances. See 42 C.F.R. § 405.372(d)(3)(i)-(ii). Specifically, the suspension of your Medicare payments is based on, but not limited to, information that you mispresented services billed to the Medicare program. More particularly, a prepay medical review of claims indicated the Medicare guidelines for DME Telemedicine were not met. Additionally, a beneficiary interview indicated they [sic] did not know the listed referring physician.
The following list of sample claims provide evidence of our findings and serve as a basis for the determination to suspend your Medicare payments:
This list is not exhaustive or complete in any sense, as the investigation into this matter is continuing. The information is provided by way of example in order to furnish you with adequate notice of the basis for the payment suspension noticed herein.
Pursuant to 42 C.F.R. § 405.372(b)(2), you have the right to submit a rebuttal statement in writing to us indicating why you believe the suspension should be removed. We request that you submit this rebuttal statement to us within 15 days. You should include with this statement any evidence you believe is pertinent to your reasons why the suspension should be removed.
If you submit a rebuttal statement, we will review that statement (and any supporting documentation) along with other materials associated with the case. Based on a careful review of the information you submit and all other relevant information known to us, we will determine whether the suspension should be removed, modified, or should remain in effect within 15 days of receipt of the complete rebuttal package. However, the suspension of your Medicare funds will continue while your rebuttal package is being reviewed. Thereafter, we will notify you in writing of our determination to continue or remove the suspension and provide specific findings on the conditions upon with the suspension may be continued or removed, as well as an explanatory statement of the determination. See 42 C.F.R. § 405.375(b)(2). This determination is not administratively appealable. See 42 C.F.R. § 405.375(c).
If the suspension is continued, we will review additional evidence during the suspension period to determine whether claims are payable and/or whether an overpayment exists and, if so, the amount of the overpayment. See 42 C.F.R. § 405.372(c). We may need to contact you with specific requests for further information. You will be informed of developments and will be promptly notified of any overpayment determination. Claims will continue to be processed during the suspension period, and you will be notified about bill/claim determinations, including appeal rights regarding any bills/claims that are denied. The payment suspension applies to both current and future payments.
In the event that an overpayment is determined and it is determined that a recoupment of payments under 42 C.F.R. § 405.371(a)(3) should be put into effect, you will receive a separate written piece of the intention to recoup and the reasons. You will be given an opportunity for rebuttal in accordance with 42 C.F.R. § 405.374 from [CMS Contractor]. When the payment suspension has been removed, any money withheld as a result of this action shall be first be applied to reduce or eliminate the determined overpayment and then to reduce any other obligation to CMS or to the U.S. Department of Health and Human Services in accordance with 42 C.F.R. § 405.372(e). In the absence of a legal requirement that the excess be paid to another entity, the excess will be released to you.
Obviously, a payment suspension is serious. It is extremely difficult for a DME supplier to keep its doors open when its Medicare payments are cut off for six months or more. When a DME supplier receives a suspension letter, then the first step it needs to take is to prepare and timely submit a detailed rebuttal with supporting documentation. Among other points, the rebuttal needs to credibly show that the Medicare program will not be placed in jeopardy by the payment suspension being lifted. The DME supplier can argue for a complete lifting of the payment suspension…or for a partial lifting of the suspension.
If CMS refuses to lift the payment suspension, then the supplier needs to be able to “hunker down” and try to stay in existence while the CMS contractor completes its audit. After the audit is completed, then CMS will likely lift the suspension but will offset against receivables (owed by CMS) the amount that CMS claims is owed by the DME supplier. It is not uncommon for the claimed offset to exceed the receivables owed by CMS.
A rebuttal is normally in the form of a detailed letter (with exhibits) addressed to the CMS contractor. Set out below is an example of what can be contained in such a rebuttal letter.
This letter serves as a rebuttal statement to your _______ __, 2019, Notice of Suspension of Medicare Payments (“Notice Letter”), a copy of which is attached as Exhibit A.
Background
ABC Medical Equipment, Inc. (“ABC”) is a durable medical equipment supplier that provides a variety of products, including orthotic braces. ABC is dedicated to assisting patients’ durable medical equipment needs to improve their quality of life.
Payment Suspension Is Unwarranted and Should Be Lifted
The Notice Letter states that [CMS Contractor] reviewed ABC’s Medicare billing and found instances in which there was no prior Part B relationship with the ordering/referring providers and other instances in which ABC was not accredited to provide specific orthoses. The Notice Letter provides _____ examples that were considered insufficient to meet the Medicare guidelines and states that “the list [of _____ claims] is not exhaustive or complete in any sense, as the investigation into this matter is continuing.” We disagree with [CMS Contractor’s] findings and dispute the appropriateness of Medicare payment suspension.
ABC understands that, in order for a claim for durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”) to be paid, a valid doctor-patient relationship must exist between the ordering/referring providers and the patients to whom the supplies are ordered and dispensed. ABC believes that valid doctor-patient relationships were established for claims _______ and _______. [The rebuttal letter then sets out the facts that ABC believes support ABC’s position.]
Furthermore, ABC understands that claims for DMEPOS will only be covered by Medicare if they satisfy the applicable accreditation requirements. Supplier Standard 22 requires that a supplier’s accreditation indicate the specific products and services for which a supplier is accredited in order for the supplier to receive payment for those specific products and services. ABC is accredited by __________. During the period in question, ABC was accredited by ____ to supply DMEPOS with a supplier category of ____. The Notice Letter alleges that ABC was not accredited to provide some or all of the following orthoses during the time period in question. [The rebuttal letter lists the orthoses.]
ABC was accredited to supply products with codes _____ and _____. These product codes were and continue to be classified as ____, which means that the products are off-the-shelf items. Because ABC was accredited to provide products classified as ____, ABC was permitted to supply these products during the dates in question.
Conclusion
Based on the above information, ABC disagrees with CMS’s determination to suspend its Medicare payments. ABC is committed to compliance with Medicare’s laws, regulations, and policies and the submission of complete and accurate claims. ABC has been in compliance with Medicare’s Supplier Standards related to accreditation; and upon notice that the accreditation requirements changed for certain product codes, ABC immediately worked to obtain accreditation to provide such supplies to beneficiaries and refrained from providing products in which the classification changed until its accreditation was updated. Furthermore, ABC supplies braces to beneficiaries pursuant to adequate documentation establishing valid physician-patient relationships.
The suspension of ABC’s Medicare payments has had a significant and negative financial impact on ABC and will continue to have this negative impact if the payment suspensions are extended until further notice. There are other means available to CMS to protect its interest, such as prepayment review. Any alleged errors in this case are the type typically addressed by measures less drastic than payment suspension. In fact, using payment suspension in this manner allows CMS to circumvent federal statutes, which prevent it from recouping overpayments from a provider until after the second level of appeal or reconsideration. For the reasons stated above, ABC respectfully requests that the payment suspensions be lifted immediately.
AAHOMECARE’S EDUCATIONAL WEBINAR
When it is Proper to Re-Start the 36 Month Oxygen Rental Period
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. & Lisa K. Smith, Esq., Brown & Fortunato, P.C.
Tuesday, April 30, 2019
2:30-3:30 p.m. EASTERN TIME
When a DME supplier provides an oxygen concentrator to a Medicare beneficiary, Medicare will pay the supplier for the first 36 months and then the supplier will be obligated to service the beneficiary’s oxygen needs, for very little compensation, for the next 24 months. The beneficiary’s continuous use of the concentrator may be interrupted by one of the following events: (i) the concentrator is lost, stolen, or damaged beyond repair; (ii) there is an extended break in need of greater than 60 days; (iii) the supplier sells its assets to another supplier; (iv) the supplier goes out of business; (v) the supplier files bankruptcy; or (vi) the beneficiary relocates outside the supplier’s service area. This webinar will discuss whether the 36 month rental period will start over when one of these interruptions occur.
Register for When it is Proper to Re-Start the 36 Month Oxygen Rental Period on Tuesday, April 30, 2019, 2:30-3:30 p.m. ET, with Jeffrey S. Baird, Esq., and Lisa K. Smith, Esq., of Brown & Fortunato, PC.
FEES: Member: $99.00; Non-Member: $129.00
AAHomecare’s Retail Work Group
The Retail Work Group is a vibrant network of DME industry stakeholders (suppliers, manufacturers, consultants) that meets once a month via video conference during which (i) an expert guest will present a topic on an aspect of selling products at retail, and (ii) a question and answer period will follow. The next Retail Work Group video conference is scheduled for May 9, 2019, at 11:00 a.m. Central. Renae Storie, Pride Mobility Products, will present “Driving Customer Engagement through Successful Events & Campaigns.” Participation in the Retail Work Group is free to AAHomecare members. For more information, contact Ashley Plauché Manager of Government Affairs, AAHomecare ([email protected]).
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or [email protected].
