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RAC Appeal Process Strategies. Patrick C. Devine, Jr. Courtney A. Miller. Demonstration Results. RACs identified $1.03 billion in improper payments 96% of identified improper payments = overpayments After appeals, etc., $693 million returned to Medicare Trust Fund

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rac appeal process strategies

RAC Appeal Process Strategies

Patrick C. Devine, Jr.

Courtney A. Miller

demonstration results
Demonstration Results
  • RACs identified $1.03 billion in improper payments
    • 96% of identified improper payments = overpayments
    • After appeals, etc., $693 million returned to Medicare Trust Fund
      • 34% of provider appeals successful
demonstration project
Demonstration Project
  • Take Aways:
    • Take steps to limit exposure for improper payment claims
      • Before a RAC review
    • Understand the review and appeals process if subject to RAC review
limit exposure
Limit Exposure
  • Develop a RAC Response Team Now
    • Include members from all areas of risk
    • On-going duties
  • Team responsible for entire RAC process
    • Assessing areas of risk
    • Keeping track of all record requests
    • Implementing compliance strategies
    • Handling all RAC reviews and appeals from start to finish
    • Key person for all RAC communications
limit exposure5
Limit Exposure
  • Educate staff on Medicare billing issues
    • Focus on areas of known weaknesses
  • Learn from colleagues, the Demonstration Project and other sources
    • Medical necessity
    • Coding errors
    • RAC Status Documents (www.cms.gov/rac)
    • OIG Work Plan
audit areas and top error by provider type
Audit Areas and Top Error by Provider Type

Source: Medicare RAC Program: An Evaluation of the 3-Year Demonstration

limit exposure7
Limit Exposure
  • Self Audits
    • Self Disclosure
      • Important to work with legal counsel
    • Legal obligations
    • Process for Voluntary Refunds
    • Benefits and Consequences
    • Voluntary refunds will exclude the claims from RAC review
overview of the rac review appeal process
Overview of the RAC Review/Appeal Process
  • RAC Review
    • Initial Determination
    • Recoupment
  • Informal Appeal: Rebuttal
  • Formal Appeal
    • 5 levels
overview of review and appeals process
Overview of Review and Appeals Process

Source: American Hospital Association

rac review
RAC Review
  • 2 Types of reviews
    • Automated (software searching for clear errors)
    • Complex (review of patient records)
      • RAC’s authority to request records is subject to limits
      • All requests should be channeled through RAC Team
rac review11
RAC Review
  • Provider must provide requested records within 45 days
    • Failure = RAC authorized to find improper payment
    • Failure = potential loss of right to appeal
    • RAC Team should control this process
      • Extensions possible
initial determination
Initial Determination
  • RAC’s Initial Determination
    • Timeframe for RAC determination
      • 60 days after receiving records
      • Failure to respond = ???
        • Possible defense
    • Written notice to provider
      • Reason for denial
recoupment
Recoupment
  • If RAC identifies overpayment, Medicare typically uses recoupment to recover
    • Begins 41 days after date of demand
    • Provider can delay recoupment until the 3rd stage of appeal process
      • Deadlines: appeal v. delay of recoupment
    • After Reconsideration stage, provider can delay recoupment through an extended repayment plan
recoupment interest
Recoupment & Interest
  • Interest accrues from date of final determination, unless paid within 30 days
    • Continues to accrue during appeal process
    • Fixed interest rate (currently 11.38%)
    • Factor to consider before appealing
  • Pay and then appeal?
rebuttal
Rebuttal
  • Provider can rebut RAC’s initial determination
    • File with RAC within 15 days after receipt
  • When to consider: New documentation to support the claim
  • Not required
  • Does NOT toll deadline for filing formal appeal
formal appeals process
Formal Appeals Process
  • 5 Levels (Medicare Appeals Process)
    • Redetermination
    • Reconsideration
    • Administrative Law Judge Hearing
    • Medicare Appeals Council Review
    • Federal Court
slide18

FI, carrier

60 days+14 day extension

180-194 Days

Notice Letter

120 Days to File

180 Days to File

240

Days

QIC

60-day time limit

60 Days to File

780-

794

Days

150

Days

ALI

90-day time limit

60 Days to File

150

Days

MAC

90-day time limit

60 Days to File

US District Court

Last Level- No time limit

60+

Days

Appeals Timeline

results of the demonstration
Results of the Demonstration
  • Connelly v. Viant??
factors to consider
Factors to Consider
  • Time
  • Cost of appeal
  • Resources
  • Quality of documentation
  • Implications
  • Clinical support
  • Legal involvement
outcomes
Outcomes
  • Full Reversal
    • No further action, RAC cannot appeal
    • RAC must refund contingency fee
    • Provider may be paid interest
  • Partial Reversal
  • Denial
level 1 redetermination
Level 1: Redetermination
  • File request for redetermination with FI
    • If not inpatient hospital, then with Carrier
  • Rebuttal not required
  • Must file within 120 days of receipt of RAC determination
    • Exception for “Good Cause”
level 1 redetermination23
Level 1: Redetermination
  • Request must be in writing
    • Use CMS form 20027 or develop your own
    • Provide evidence explaining why provider disagrees
    • Raise all issues and submit all relevant documents
  • No hearing, decision based on written appeal
level 1 redetermination24
Level 1: Redetermination
  • No minimum requirements for amount in controversy
  • FI has 60 days to approve/reverse initial determination
level 2 reconsideration
Level 2: Reconsideration
  • File with Qualified Independent Contractor (“QIC”)
    • Virginia = Maximus
  • Must file within 180 days after receipt of notice of Redetermination
    • Use CMS Form 20033 or develop your own
level 2 reconsideration26
Level 2: Reconsideration
  • Written appeal; no appearance necessary
  • Raise all issues and submit all evidence
    • If not, excluded from consideration in subsequent appeals
  • No minimum amount of controversy
level 2 reconsideration27
Level 2: Reconsideration
  • QIC conducts an independent, on the record review
    • Medical necessity reviewed by panel of MDs
  • QIC authority
    • Must follow LCDs, CMS rulings, laws
level 2 reconsideration28
Level 2: Reconsideration
  • Within 60 days of receipt of request, QIC must mail written notice of action:
    • Reconsideration
    • Inability to complete the reconsideration
    • Dismissal of claim
  • If QIC fails to act within 60 days, provider may appeal to ALJ
level 3 alj hearing
Level 3: ALJ Hearing
  • Must be filed within 60 days of receipt of notice of QIC’s reconsideration
    • Use CMS Form 20034A
    • $120.00 min. amount in controversy
  • Hearing typically by tele-conference
    • Usually within 90 days
    • Develop good oral testimony
    • No new evidence
alj hearing
ALJ Hearing
  • Evidence is limited to what was presented for reconsideration (QIC)
    • Exception for good cause
  • ALJ can subpoena witnesses/documents
  • ALJ will consider all issues previously considered
alj hearing31
ALJ Hearing
  • Within 90 days of the hearing, ALJ must issue written decision
    • Remand to QIC
    • Dismissal
    • Approve
level 4 mac review
Level 4: MAC Review
  • Must file request within 60 days after receipt of ALJ’s decision
    • MAC may review ALJ decision on its own motion or based on referral by CMS
  • MAC will issue its final decision within 90 days of receipt of request for review
level 4 mac review33
Level 4: MAC Review
  • MAC reviews the ALJ’s decision de novo
    • Limited to the evidence in the ALJ’s administrative record
      • In some cases, briefs requested
  • No right to a hearing
  • MAC may adopt, reverse, modify or remand the case to ALJ
level 5 federal court
Level 5: Federal Court
  • File appeal within 60 days of receipt of MAC’s decision
  • Min. amount in controversy - $1,220
  • File in USDC in the provider’s district
level 5 federal court35
Level 5: Federal Court
  • Limited purpose: questioning the decision of the MAC and the findings of the ALJ
  • Evidence limited to ALJ record
  • No deadline for decision
  • No appeal from this level
    • Entire process can take up to two years
appeal strategies
Appeal Strategies
  • Advocate the Merits
  • Treating Physician Rule
  • Waiver of Liability
  • Provider Without Fault
  • Reopening Not Based on Good Cause
  • Challenging the Statistics
  • Constitutional Challenge
advocating the merits
Advocating the Merits
  • Not technically a “defense”
  • Factual and legal arguments supporting payment
    • Prepare position paper
  • Use qualified expert to confirm medical necessity
treating physician rule
Treating Physician Rule
  • Medical necessity
  • Treating physician in the best position to judge
  • Physician’s determination should be given more weight than RAC
    • RAC uses medical professionals who have never met or assessed the patient
waiver of liability
Waiver of Liability
  • Medical Necessity
  • Section 1879(a) of the Social Security Act
  • Payment permitted if provider “did not know, and could not reasonably have been expected to know, that payment would not be made for such services”
waiver of liability40
Waiver of Liability
  • Maintain records of all communications with Medicare representatives
    • i.e. Overpayment claim overturned in past
provider without fault
Provider Without Fault
  • Medical Necessity
  • Section 1870 of the Social Security Act
  • Provider entitled to payment when the provider is without fault and denial of the claim is deemed be against equity and good conscience
provider without fault42
Provider Without Fault
  • Generally, provider considered to be without fault if:
    • Exercised reasonable care
    • Made full disclosure of all material facts
    • Had a reasonable basis for assuming payment was correct
provider without fault43
Provider Without Fault
  • Considers various factors
    • Age, linguistic limitations, etc.
  • Document phone calls, guidance from CMS or carrier.
    • Individual communications
    • General communications to provider and supplier community
reopening not based on good cause
Reopening Not Based on Good Cause
  • RACs must adhere to regulatory timeframes for reopening initial determinations
  • For Medicare generally:
    • Within 1 year – for any reason
    • Within 4 years – for good cause
    • No deadline if reliable evidence of fraud
  • RAC limited 3-year look-back period
    • Only back to October 2007
reopening not based on good cause45
Reopening Not Based on Good Cause
  • Good Cause:
    • New and material evidence

(not readily available or known)

OR

    • Obvious error made at the time of determination
  • Recent Transmittal: A contractor’s decision to reopen based on the existence of good cause, or refusal to reopen after determining good cause does not exist, is not subject to appeal.
challenging the statistics
Challenging the Statistics
  • RACs may extrapolate in certain circumstances
  • Must follow Medicare’s statistical guidelines
  • Use a third party expert to challenge the validity of the extrapolation
constitutional challenge
Constitutional Challenge
  • Possible Argument?
conclusion
Conclusion
  • Take steps to prepare NOW
    • Establish a RAC Team
    • Limit exposure
    • Maintain adequate records
  • Appeals process
    • Deadlines
    • Defenses
questions
Questions
  • Patrick C. Devine, Jr. pdevine@williamsmullen.com757.629-0614
  • Courtney A. Miller

cmiller@williamsmullen.com

757.629.0665