Auditing the Auditors

HMEs have become increasingly alarmed about the number, type and scope of Medicare audits over the last 18 months. Some of the audits are not just unfair — they are contrary to coverage criteria and do not comply with applicable laws and regulations.

The law requires that the Department of Health and Human Services pay only for covered items and services that are “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” But the law also clearly states that the intent of Congress is that HHS will pay for items when a beneficiary has shown he or she meets medical necessity criteria.

The Association’s concern is that recent efforts by CMS to identify and recoup alleged improper payments has caused the agency take actions that are contrary to its fundamental statutory mandate. CMS contractors are routinely denying, or requesting refunds for, medically necessary home medical equipment items that are clearly covered by Medicare.

A member-directed task force at AAHomecare has been carefully examining and documenting recent Medicare Integrity Program (MIP) activities carried out by CMS and its contractors. The task force has looked at dozens of sample audit letters that are typical of the ones HMEs receive from Medicare contractors nationwide.

Keep in mind that Medicare Integrity Contractors (MICs) focus mostly on preventing, identifying and recovering payments that should not be paid or that were paid in error. Zone Program Integrity Contractors (ZPICs) and Program Safeguard Contractors (PSCs) are MICs tasked with these benefit integrity functions. ZPICs and PSCs also develop cases for possible civil or criminal investigations.

ZPICs, PSCs and DME MACs conduct both pre- and post-payment audits. Comprehensive Error Rate Testing (CERT) contractors and Recovery Audit Contractors (RACs) only audit claims post-payment, consistent with their more limited scope of work.

Generally, all contractor actions must comply with the following authorities:

• The provisions of the Social Security Act and other federal statutes, including those parts of the Administrative Procedure Act that establish due process protections;
• CMS rules implementing its statutory authority, such as rules that govern timeframes for claim adjudication, limitations on claim reopenings, and appeals;
• National Coverage Determinations (NCDs);
• Local Coverage Determinations (LCDs); and
• Medicare manuals and program instructions.

Based on our examination of recent audit actions, it is clear that CMS contractors often do not comply with these policies, laws and regulations. Contractors are either refusing to pay for services or are requesting refunds for claims, in spite of the treating physician’s determination of medical necessity and patient records that further demonstrate legitimate medical need for an HME item. Our review shows that Medicare contractors often deny claims for reasons that are not specified in a controlling NCD or LCD or impose new documentation requirements without notice to providers.

ZPICs, PSCs and DME MACs in particular are performing non-random prepayment complex medical reviews that include patently unfair requests for additional documentation and give providers little guidance about what they must do to terminate the prepay review.

For example, recently, and apparently without prior notice to providers, CERT contractors have been disregarding medical documentation created at the time of the initial order. The CERT now requires suppliers to submit patient records that explicitly document medical necessity on the date of service the CERT is auditing.

Very few LCDs or NCDs require the beneficiary to be seen by his or her doctor twice a year. Consequently, HME providers do not have, and usually cannot obtain (because the doctor does not have them either), medical records that satisfy the CERT’s request. In other instances, even if such records exist, they lack the specific wording the contractor believes is necessary for Medicare coverage. The result is that providers must refund the claim despite the presence of medical records that would have established medical necessity only a few months ago.

The review of our task force also found that HME providers are being unreasonably burdened by being placed on 100 percent prepayment review absent credible evidence of fraud, waste, or abuse. Providers are receiving additional documentation requests on hundreds of claims, requiring them to spend enormous numbers of hours obtaining clinical documentation to support medical necessity.

Due to the volume of these requests that ZPICs are issuing, the ZPICs are not completing their reviews in a timely manner, which cuts off the providers’ cash flow for extended periods of time. This ultimately affects the providers’ ability to furnish an acceptable quality and level of care.

To address these severe problems, AAHomecare will meet with federal regulators and members of Congress to make several recommendations for CMS.

Specifically, CMS should:

• Not permit contractors to apply new audit strategies retroactively;
• Establish clear, consistent rules on the medical necessity criteria and documentation that contractors may request in an audit;
• Publish the criteria for comment and include HME providers and physicians in this process. Once there are clear guidelines, contractors may enforce them prospectively;
• Establish parameters on the manner in which ZPICs perform audits;
• Place limitations on the number of additional documentation requests a ZPIC can issue to any one HME provider; and
• Limit ZPIC audits to situations where CMS or the ZPIC has credible evidence of serious wrongdoing on the part of a home care provider.

Our goal is to ensure fair treatment by CMS staff and its contractors. We need unambiguous guidance that clearly defines what is required of HME providers. Contractors must also play by the established rules and need detailed instructions from CMS.

Auditing cannot be a game of “gotcha.”

If you have audit “horror stories” you would like share, AAHomecare asks that you contact the associaton’s Walter Gorski at [email protected].

Read more AAHomecare Update columns.

Tyler J. Wilson is president and CEO of the American Association for Homecare, headquartered in Arlington, Va. You can reach him at [email protected]. For more information on critical home care issues, visit the association’s Web site at www.aahomecare.org.