AMARILLO, TX – Attorneys like to use the phrase “Possession is 9/10ths of the law.” This means that when Company A and Company B are working together, if Company A has the stronger legal position…but Company B possesses something that Company A needs (i.e., money) … then notwithstanding what the law says, Company B has the upper hand. We see this in the Medicare Advantage space.

The DME supplier may undeniably submit “clean claims” to the Medicare Advantage Plan (“MAP”), but if the MAP does not pay the claims (or “slow pays” the claims), the DME supplier suffers. Regardless of whether the MAP pays the DME supplier, the supplier must make payroll, pay the electric bill, etc. And so while the DME supplier has the superior legal position, the MAP has the superior practical position. MAPs can be a “black hole.”

• MAPs have been around for several decades. Up until recently, there has been virtually no CMS/Congressional oversight of MAPs.
• The law setting up MAPs essentially says to the plans: “You go round up Medicare patients. You go contract with physicians, hospitals, DME suppliers, etc. We will pay you money to take care of the patients. You pay the providers and suppliers…and pocket the difference.”
• Under the title of “out of sight, out of mind,” as long as CNN’s Anderson Cooper was not standing on a street corner talking about elderly patients dying, CMS/Congress did not care if patients were not being taken care of or if the providers/suppliers were being unfairly treated.
• This is beginning to change. We are seeing a number of agencies looking at MAPs (in the hospital/physician/DME space) and PBMs (in the pharmacy space). [MAPs and PBMs do essentially the same thing. At the end of the day, their goal is to pocket an ever increasing spread. This is accomplished by (i) reducing reimbursement and (ii) not paying…or slow paying…providers and suppliers.]
• Finally, we are seeing scrutiny by the FTC, Senate Committees, the White House, CMS, state insurance commissions, and state legislatures. But MAPs (and PBMs) will kick and scratch each step of the way as government agencies try to rein them in.

If allowed to do so, MAPs will string a DME supplier along for as long as the supplier allows them to do so. This allows the MAPs to use cheap money (i.e., the DME supplier’s money). Most DME suppliers are hesitant to become aggressive with MAPs because of a fear that the MAPs will terminate their contracts with the suppliers. This causes the DME supplier to be careful with the steps it takes to collect money owed by the MAP. The supplier can start off with non-aggressive steps…and then escalate the steps (into a more aggressive posture) if it becomes necessary to do so. For example, the DME supplier can take the following escalating steps:

• If the MAP is open to it, the DME supplier should engage in ongoing communications with the MAP. Even though such communications can be frustrating, when people talk…good things often happen. But if the communications do no good, the supplier can consider the following:
• The DME supplier can ask physicians and hospitals, that have contracts with the MAP, to reach out to the MAP and advocate for the supplier.
• The DME supplier can ask its patients to complain to the MAP about its nonpayment/slow payment to the supplier. [A word of caution. If the DME supplier goes this direction, it will need to be careful. It is likely that the supplier’s contract with the MAP limits what the supplier can say to the covered lives regarding the actions of the MAP.]
• The DME supplier can file a formal complaint with the State Insurance Commissioner. As to how effective this will be will depend on the attitude of the Commissioner towards MAPs operating in the state.
• The DME supplier can hire a lobbyist to work with (i) state legislative committees to tighten legislation regarding payments by MAPs and (ii) work with the State Insurance Commission to tighten regulations regarding payments by MAPs.
• The supplier’s attorney can reach out to a MAP’s in-house attorney with the goal of instigating attorney-to-attorney discussions regarding the nonpayment/slow payment by the MAP.
• The supplier’s attorney can send a demand letter that threatens litigation under multiple legal theories including, but not limited to, the following:
• Violation of the State Insurance Code.
• Insurance fraud.
• Deceptive trade practices.
• Breach of contract.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers and other health care providers throughout the United States. 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].

AAHOMECARE’S EDUCATIONAL WEBINAR

Compliance Program: Mistake Avoidance, Company Valuation, Audits, and 60 Day Rule

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato & Wayne van Halem, The van Halem Group

Tuesday, December 3, 2024

1:30-2:30 p.m. CENTRAL TIME
Implementation of a formal compliance program has a “real world” impact on DME suppliers. A compliance program is a blueprint (“roadmap”) for the supplier’s employees to follow as they fulfill their employment responsibilities. The program (i) anticipates the multiple daily decisions the supplier must make and (ii) erects guardrails to follow in making the decisions. In short, a functioning compliance program helps DME suppliers avoid mistakes. If a DME supplier decides to sell, the purchaser will conduct due diligence, meaning that it will examine the supplier’s operations to determine if they are legally compliant.

A noncompliant operation (e.g., providing CPAPs in violation of the Medicare CPAP Payment Prohibition) will greatly reduce the selling supplier’s value to a prospective buyer. DME suppliers are audited by multiple sources. If the supplier operates within the compliance program’s guardrails, the risk of an audit leading to a bad outcome is greatly reduced. And then there is the 60 Day Rule and Six-Year Lookback. If a DME supplier determines that it has been improperly submitting claims to Medicare, the supplier is obligated to investigate the matter and then report and refund the claims to Medicare. Depending on the circumstances, the supplier may have to conduct a Six-Year Lookback. A functioning compliance plan will reduce the risk of improperly submitting claims that result in in applicability of the 60 Day Rule and Six-Year Lookback.

This program will examine (i) how a compliance program should be drafted and adopted by the DME supplier, (ii) how the program should be updated on a regular basis, and (iii) how following the guardrails contained in the program will reduce the number of mistakes, maintain  the value of the supplier, reduce bad audit outcomes, and reduce the risk of having to conduct a Six-Year Lookback. 

Register for Compliance Program: Mistake Avoidance, Company Valuation, Audits, and 60 Day Rule on Tuesday, December 3, 2024, 1:30-2:30 p.m. CT, with Jeffrey S. Baird, Esq. and Wayne van Halem.

Members: $99
Non-Members: $129