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DETERMINING WHETHER TO APPEAL RAC DENIALS. Kathleen Houston Drummy Davis Wright Tremaine LLP. RACs USE 2 APPROACHES TO REVIEWING FOR IMPROPER PAYMENTS. I. AUTOMATED REVIEW DATA MINING CERTAINTY THAT SERVICE IS NOT COVERED OR IS INCORRECTLY CODED AND

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determining whether to appeal rac denials

DETERMINING WHETHER TO APPEAL RAC DENIALS

Kathleen Houston Drummy

Davis Wright Tremaine LLP

racs use 2 approaches to reviewing for improper payments
RACs USE 2 APPROACHES TO REVIEWING FOR IMPROPER PAYMENTS

I. AUTOMATED REVIEW

  • DATA MINING
    • CERTAINTY THAT SERVICE IS NOT COVERED OR IS INCORRECTLY CODED AND
    • A WRITTEN MEDICARE POLICY, ARTICLE OR SANCTIONED GUIDELINE EXISTS

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racs use 2 approaches to reviewing for improper payments cont d
RACs USE 2 APPROACHES TO REVIEWING FOR IMPROPER PAYMENTS (cont’d)
  • COMPLEX REVIEW
      • HUMAN REVIEW OF THE MEDICAL RECORD
        • THE REQUIREMENTS FOR AUTOMATED REVIEW ARE NOT MET (E.G., NO MEDICARE POLICY, ARTICLE OR SANCTIONED CODING GUIDELINES EXISTS)
        • THERE IS A HIGH PROBABILITY (BUT NOT CERTAINTY) THAT A SERVICE IS NOT COVERED

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complex review
COMPLEX REVIEW
  • RACs REQUIRED TO USE MEDICAL LITERATURE AND APPLY APPROPRIATE CLINICAL JUDGMENT
  • RAC’s MEDICAL DIRECTOR TO BE INVOLVED IN REVIEWING THE CLAIM DETERMINATIONS
  • RAC’S RNS OR THERAPISTS TO MAKE MEDICAL NECESSITY/COVERAGE DETERMINATIONS
  • CERTIFIED CODERS TO MAKE CODING DETERMINATIONS
  • PROVIDER MAY REQUEST CREDENTIALS OF THE REVIEWERS

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do you appeal a rac denial
DO YOU APPEAL A RAC DENIAL?
  • ANY CLEAR MEDICARE RULES, GUIDANCE OR CRITERIA REGARDING THE SERVICE
  • STATUS OF SUPPORTING DOCUMENTATION
  • CLINICAL STAFF AVAILABILITY AND SUPPORT
  • INVOLVEMENT OF OUTSIDE CONSULTANTS/ ATTORNEYS TO ASSIST IN REVIEW OF DENIAL

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do you appeal a rac denial cont d
DO YOU APPEAL A RAC DENIAL? (cont’d)
  • EFFECT OF BINDING AUTHORITY ON DIFFERENT APPEAL LEVELS
    • ALJS NOT BOUND BY LOCAL COVERAGE DECISIONS, LOCAL MEDICAL REVIEW POLICIES, OR CMS PROGRAM GUIDANCE; E.G., MANUAL PROVISIONS
  • AVAILABILITY OF OTHER LEGAL DEFENSES
  • COST VS. BENEFIT OF THE APPEAL

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do you appeal a rac denial1
DO YOU APPEAL A RAC DENIAL?
  • DOES RAC AUDIT COMPLY WITH RAC CONTRACTUAL REQUIREMENTS?
    • EXAMPLE: NO REVIEW OF CLAIMS REVIEWED BY OTHER MEDICARE AUDITORS OR FEDERAL AGENCIES
    • EXAMPLE: CANNOT EXCEED CMS ISSUED LIMITS ON NUMBER AND FREQUENCY OF MEDICAL RECORD REQUESTS
    • EXAMPLE: DID RACs INVOLVE APPROPRIATE CLINICAL STAFF IN REVIEW
    • EXAMPLE: DID RAC APPLY CMS RULES/POLICIES OR ITS OWN SCREENING CRITERIA AND RULES

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rebuttal to rac
REBUTTAL TO RAC
  • UPON RAC DENIAL: REBUTTAL AND APPEAL OPTIONS
  • REBUTTAL TO THE RAC
    • 15 DAYS OF RECEIPT OF RAC DENIAL
    • POSSIBLE USE TO AUGMENT PROVIDER’S UNDERSTANDING OF THE BASIS FOR THE DENIAL AND IN ASSESSING WHETHER TO APPEAL

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rebuttal to rac cont d
REBUTTAL TO RAC (cont’d)
  • NEW DOCUMENTATION COMES TO LIGHT TO SUPPORT A CLAIM
  • REFERENCE ANY MEDICARE AUTHORITY SUPPORTING PROVIDER’S POSITION
  • PROVIDER STILL ABLE TO APPEAL, BUT USE OF REBUTTAL PROCESS DOES NOT AFFECT RECOUPMENT OR APPEAL TIME FRAMES

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cost versus benefits of appealing
COST VERSUS BENEFITS OF APPEALING

BENEFITS

  • KEEP/RECOUP CLAIM PAYMENT
  • MAY HEAD OFF SIMILAR DENIALS, IF SUCCESSFUL
  • PROACTIVELY APPEALING MAY MAKE THE PROVIDER A LESS DESIRABLE TARGET
  • PROTECT COMMUNITY REPUTATION
  • MINIMIZE COMPLIANCE REPERCUSSIONS FROM NOT CHALLENGING DENIALS

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COSTS
    • COST OF ASSESSING THE DENIAL
      • INTERNAL
      • EXTERNAL CONSULTANTS OR LEGAL COUNSEL
    • COST OF PREPARING AND HANDLING THE APPEAL
      • ALJ (THE THIRD LEVEL APPEAL) IS GENERALLY THE MOST FRIENDLY APPEAL LEVEL, BUT DOCUMENTATION EVIDENCE MUST BE COMPLETE BY THE SECOND LEVEL

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interest costs
INTEREST COSTS
  • IF APPEAL BEFORE RECOUPMENT, AVOID IMMEDIATE RECOUPMENT
    • BUT: PAY THE PIPER INTEREST LATER IF LOSE
    • SECTION 935 OF THE MMA: RECOUPMENT UNLESS REQUEST REDETERMINATION BY THE 30TH DAY AFTER THE DATE OF THE DEMAND LETTER AND UNLESS REQUEST RECONSIDERATION BY THE 60TH AFTER AN ADVERSE REDETERMINATION DECISION
  • RECOUPMENT AFTER AN ADVERSE RECONSIDERATION DECISION EVEN IF APPEAL TO THE ALJ

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STILL COULD LOSE
    • LOSE PAYMENT FOR CLAIM

PLUS

    • LOSE INTERNAL AND EXTERNAL RESOURCE COSTS

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CANNOT WAIT UNTIL ALJ LEVEL TO PUT TOGETHER THE APPEAL
  • EARLY PRESENTATION OF EVIDENCE IN THE APPEAL PROCESS
    • CRITICAL NATURE OF RECONSIDERATION LEVEL OF APPEAL
      • ALL OF THE DOCUMENTATION THAT THE PROVIDER/SUPPLIER EXPECTS TO USE FOR THE REST OF THE APPEAL PROCESS MUST BE PRESENTED BY THE RECONSIDERATION APPEAL LEVEL
      • PROVISION OF DOCUMENTATION THEREAFTER SUBJECT TO “GOOD CAUSE” CONSIDERATIONS

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general legal issues relevant to rac appeals
GENERAL LEGAL ISSUES RELEVANT TO RAC APPEALS
  • ARE RACs AUTHORIZED BY CONGRESS TO REVIEW MEDICAL NECESSITY?

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general legal issues relevant to rac appeals cont d
GENERAL LEGAL ISSUES RELEVANT TO RAC APPEALS (cont’d)
  • ARE RAC REVIEWS UNCONSTITUTIONAL AS A RESULT OF THE CONTINGENCY FEE COMPENSATION PAID TO RACs?
    • VALIDATION AUDITOR DISAGREED WITH RACS IN 40% OF CASES REVIEWED

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other challenges to rac reopenings
OTHER CHALLENGES TO RAC REOPENINGS
  • DEFENSES AGAINST CLAIM DENIAL

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compliance repercussions
COMPLIANCE REPERCUSSIONS?
  • RACs ARE TO REPORT SUSPECTED FRAUD AND ABUSE
  • MMA OF 2003 DID NOT PROHIBIT INVESTIGATIONS BY CMS OF FRAUD AND ABUSE ARISING FROM A RAC OVERPAYMENT DETERMINATION
    • OTHER MEDICARE ENFORCEMENT AGENCIES WILL SEE THE DENIAL STATISTICS

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ERRONEOUS OR QUESTIONABLE RAC DETERMINATIONS MIGHT BE HARDER TO CHALLENGE AT THE BACK END IF THOSE DETERMINATIONS BECOME THE BASIS OF A COMPLIANCE INVESTIGATION
    • IF THE RAC FINDS OVERPAYMENTS OF A SYSTEMATIC TYPE, PROVIDER CORRECTIVE ACTIONS MERITED PARTICULARLY IF DO NOT APPEAL
    • IF DO APPEAL, THERE IS A LEGAL DISPUTE OVER WHETHER ANY KNOWLEDGE OF FALSITY UNDER THE FALSE CLAIMS ACT

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PREEMPTIVE ACTIONS BY THE PROVIDER
    • SELF-DISCLOSURES TO THE OIG, VOLUNTARY REFUNDS AND CORRECTIVE ACTIONS TO MINIMIZE FUTURE IMPACT
    • SELF-DISCLOSURE AND REPAYMENT
      • SHOULD A PROVIDER DISCOVER THAT IT MAY HAVE RECEIVED AN IMPROPER MEDICARE PAYMENT, MAY DECIDE TO MAKE A SELF-DISCLOSURE OR VOLUNTARY REFUND

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IMPACT ON RAC AUDITS:
    • RACs MAY NOT REVIEW CLAIMS THAT ARE UNDER REVIEW BY ANOTHER GOVERNMENT ENTITY
    • RAC COMPENSATION IS IMPACTED BY SELF-DISCLOSURES AND VOLUNTARY REFUNDS

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VOLUNTARY REPAYMENTS
    • MADE TO THE MEDICARE CONTRACTOR
    • NO RAC FEES IN CERTAIN CASES
    • MEDICARE PROGRAM INTEGRITY MANUAL, CHAPTER 4

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other corrective actions
OTHER CORRECTIVE ACTIONS
  • REDESIGNING OR IMPROVING INTERNAL CONTROLS
  • EDUCATING AND TRAINING OF RELEVANT PROVIDER STAFF
  • ASSURING POLICIES ON DOCUMENTATION CODING AND BILLING ARE UP TO DATE AND COMPLIANT
  • PERIODICALLY MONITORING CLAIMS VIA AN INTERNAL AUDIT TO ASSURE THAT DOCUMENTATION, CODING AND BILLING IS BEING DONE APPROPRIATELY

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RACs CAN EXTRAPOLATE
    • RACs MUST FOLLOW SECTION 935(a) OF THE MEDICARE MODERNIZATION ACT OF 2003
    • CMS ENVISIONS A RAC USING EXTRAPOLATION IN CASES WHERE THERE WAS EVIDENCE OF A SUSTAINED OR HIGH LEVEL OF PAYMENT ERROR OR DOCUMENTED EDUCATION INTERVENTION BY THE MEDICARE CONTRACTOR

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