Medicare and Medicaid Reimbursement
As all providers know, there is a huge focus on the financial cost of the healthcare reforms and the financial viability of existing Medicare and Medicaid programs. The administration has promised vigorous action against fraud and abuse in these programs.
What does this mean for the provider? Obviously, providers are worried about falling reimbursement levels. However, payment denial and recoupment are receiving a huge push. Audit programs are being government implemented and are well funded. After all, if funds are in short supply, recoupment for misbilled or nonexistent services could be an effective method to significantly cut the total program costs.
However, the aggressive methods used in the audit process, the arbitrary total denial of payment, instead of downcoding, and the aggressive, immediate efforts to withhold and recoup extrapolated funds are a serious threat to targeted providers.
The current audit methodologies in the federal and state programs target the discrepancies that may exist between the service codes billed and the documentation in the chart, and exploit these discrepancies to disallow, reduce, and/or recoup payments to providers.
These new ZPIC audit programs can have devastating economic consequences for providers.
Perhaps the most troubling aspect of the ZPIC audits is their practice of extrapolating in order to escalate repayment claims beyond actual amounts reviewed, resulting in crushing economic recoupment.
As an example of this dynamic, assume that a physician is audited and has 30 charts reviewed involving three billing codes. If 20 charts are found deficient, CMS will potentially seek to recoup 20/30 (66-2/3 %) of all payments made in those codes to that physician during the audit period. (Using inferential statistical techniques).
In this crude example, assume that the amount of the billings in the actual deficient charts was $2,700. Assume the physician collected $225,000 on these codes during the audit period. The recoupment might thus be for $150,000 (66.67% of $225,000.). The physician would then be subjected to payment withholds and aggressive collection letters from the justice department for $150,000. Suddenly, a profound economic crisis has emerged.
The audit process involves several levels of appeal with varying time deadlines. It is critically important to act immediately upon receipt of an audit result to organize the effort and begin work on the appeal. In some cases, collection action can be forstalled by proper and timely filing of appeals.
The audit process itself, from initial results to administrative law judge ruling may take several years, and involve up to five levels of appeal following the audit result. Each step is very important and is built upon the step previously taken.
We encourage every Medicare and Medicaid provider to review the criteria for the billing codes in use and carefully and thoroughly document all critical criteria.
Attorneys at Sharp & Cobos, LLP have experience in representation of providers in audit appeals, all the way through ALJ hearing and MAC appeal. We are available to represent you in the event of an adverse audit.
Sharp & Cobos, L.L.P. is a boutique law firm handling all types of Administrative Law cases in Austin and throughout Texas. Our Austin Health Law Attorneys represent licensed professionals in proceedings before licensing boards, hospitals, and other third-party entities. Call (512) 473-2265 to have your case reviewed by an experienced Austin Administrative Law attorney at Sharp & Cobos, L.L.P.
