AMARILLO, TX – When a DME supplier is hit with a post-payment audit, it is unpleasant but it does not pose an immediate threat to the supplier’s business. While the supplier is responding to the audit, revenue continues to come in. The same is true when a supplier is required to respond to a government investigation.
However, when a DME supplier is subjected to a UPIC payment suspension, the supplier’s existence is placed in immediate jeopardy. The law gives a UPIC the right to immediately suspend Medicare payments to a supplier if the UPIC concludes that it has “credible allegations of fraud.” An AdvanceMed letter to a DME supplier stated in part:
The purpose of this letter is to notify you of our determination to suspend Medicare payments to ABC Medical Equipment, Inc. (ABC). The suspension of your Medicare payments took effect on __________. Prior notice of the suspension was not provided, because giving prior notice would place additional Medicare funds at risk and hinder our ability to recover any determined overpayment. See 42 C.F.R. § 405.372(a)(3).
The decision to suspend ABC’s 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. See 42 C.F.R. § 405.371(a)(2). 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 provider/supplier audits, civil false claims cases, and law enforcement investigations. 42 C.F.R. § 405.370(a). Allegations are considered to be credible when they have indication of reliability. Id. This suspension may last until the resolution of the investigation, as defined under 42 C.F.R. § 405.370, and may be extended under circumstances. See 42 C.F.R. § 405.372(d)(3).
Specifically, the suspension of ABC’s payments is based on, but not limited to, information that ABC misrepresented services billed to the Medicare program. More particularly, ABC is alleged to have submitted claims for payment to Medicare for services that were medically unnecessary or utilized referrals from practitioners, who were employed by a telemarketing company that pays for their referrals, and have no previous relationships with the beneficiaries.
The payment suspension is normally for six months. However, the UPIC can extend the suspension beyond the initial suspension period. The payment suspension letter will give the supplier 15 days in which to submit a rebuttal. The goal of the rebuttal is to convince the UPIC that the payment suspension is not necessary. Normally, the UPIC will respond to the rebuttal within 15 days. The same AdvanceMed letter stated in part:
Pursuant to 42 C.F.R. § 405.372(b)(2), ABC has the right to submit a written rebuttal statement to us indicating why the suspension should be removed. We request that ABC submit any rebuttal statement to us within fifteen (15) days. ABC may include with this statement any evidence that is pertinent to its reasons why the suspensions should be removed.
If ABC timely submits a rebuttal statement, CMS will consider that statement (and any supporting documentation), along with other materials associated with the case. Based on a careful consideration of the relevant information submitted and all other relevant information known to us, we will determine whether the suspension should be removed or should remain in effect within fifteen (15) days of receipt of the complete rebuttal package. See 42 C.F.R. § 405.375(a).
If the UPIC does not lift the payment suspension, then during the suspension period, the supplier can continue to submit claims. However, the DME MAC will hold the payments until the UPIC completes its audit.
When the UPIC completes its audit, it will apply the suspended payments to the amount of the overpayment. If the amount of the suspended payments exceeds the overpayment, then the balance will be paid to the supplier. Conversely, if the amount of the overpayment exceeds the amount of the suspended payments, then CMS will demand the difference from the supplier.
If the UPIC concludes that the supplier’s actions were egregious, then the UPIC may (i) turn its findings over to the Department of Justice and OIG and/or (ii) recommend to the NSC that it terminate or suspend the supplier’s PTAN.
As previously discussed, when a supplier receives a suspension letter, it needs to timely submit a rebuttal. The rebuttal needs to be detailed and explain why the facts do not justify the suspension. The rebuttal should also explain why the supplier is not a threat to the integrity of the Medicare program. If the rebuttal is not successful in having the suspension lifted, then the supplier can take one or more of the following steps:
- Request a face-to-face meeting with the UPIC
- Request a meeting with key CMS personnel
- Request intervention by elected officials
The preceding three bullets are essentially a “Hail Mary.” The wisest course of action for the DME supplier to take is preventative: the supplier’s business model should be compliant. Said another Way, the Supplier should give no ammunition to a UPIC that will lead the UPIC to conclude that “credible allegations of fraud” exist.
AAHOMECARE’S EDUCATIONAL WEBINAR
How to Contest a Drastic Reimbursement Cut by a Medicaid Managed Care Plan
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Tuesday, Feb. 18, 2020
2:30-3:30 p.m. EASTERN TIME
Approximately 70 percent of all Medicaid patients are covered by Medicaid Managed Care Plans (“Plans”). A Plan is administered by an insurance company. The Plan receives money from the state Medicaid program to take care of Medicaid patients. The Plan, in turn, signs up patients and contracts with health care providers, including DME suppliers. The Plan is in the business of making money, meaning that it is motivated to pay as little as possible to providers. It is becoming all too common for a Plan to (i) enter into a “sole source” contract with one DME supplier (often, an out-of-state supplier) or (ii) reduce reimbursement to such an extent that only the Plan’s “preferred” supplier can afford to service the Medicaid patients … in which case the products are substandard and the services are nonexistent. This program will discuss the steps that DME suppliers can take to oppose sole source contracting and drastic reimbursement cuts. Such steps include (i) talking to the state Medicaid program; (ii) talking to state legislators with jurisdiction over the state Medicaid program; (iii) working with state legislators to sponsor legislation to counter the Plan’s actions; (iv) running an ad campaign; and (v) within certain parameters, educating the Plan’s covered lives about the problems arising out of a sole source contract and drastically reduced reimbursement.
- Understand how a Medicaid Managed Care Plan comes into existence.
- Understand the rights granted to and obligations imposed on Plans by state Medicaid programs.
- Learn the steps that DME suppliers can take to oppose sole source contracting and drastic reimbursement cuts.
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Texas. He represents pharmacies, infusion companies, HME companies 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@example.com.