RECOVERY AUDIT CONTRACTORS and MEDICARE AUDITS
scientific evidence on record. Where the claim involves physician services, the reviewing professional must be a physician. However, the physician reviewer need not be in the same specialty as the physician whose claims have been denied.
Stage 3: Administrative Law Judge Hearing
The third level of appeal is the Administrative Law Judge (ALJ) hearing. A provider dissatisfied with a reconsideration decision or who has exercised the escalation provision at the reconsideration stage may request an ALJ hearing. The request must be filed within 60 days following receipt of the QIC’s decision and must meet the amount in controversy requirement. ALJ hearings can be conducted by video-teleconference (VTC), in-person, or by telephone. The regulations require the hearing to be conducted by VTC if the technology is available; however, if VTC is unavailable or in other extraordinary circumstances the ALJ may hold an in-person hearing. Additionally, the ALJ may offer a telephone hearing.
Stage 4: Medicare Appeals Council Review
The fourth level of appeal is the Medicare Appeals Council (MAC) Review. The MAC is within the Departmental Appeals Board of the U.S. Department of Health and Human Services. A MAC Review request must be filed within 60 days following receipt of the ALJ’s decision. Among other requirements, a request for MAC Review must identify and explain the parts of the ALJ action with which the party disagrees. Unless the request is from an un-represented beneficiary, the MAC will limit its review to the issues raised in the written request for review.
Stage 5: Federal District Court
The final step in the appeals process is judicial review in federal district court. A request for review in district court must be filed within 60 days of receipt of the MAC’s decision. In a federal district court action, the findings of fact by the Secretary of HHS are deemed conclusive if supported by substantial evidence.
IV. STRATEGIES FOR DEFENDING MEDICARE AUDITS
Medicare providers and suppliers subject to RAC or other Medicare audits should understand that many strategies exist that can be employed successfully in the appeals process to effectuate meaningful results. These strategies involve effectively advocating the merits of the underlying services as well as employing legal defenses.
Advocating the Merits
When advocating the merits of a claim, healthcare legal counsel assisting Radiology providers and suppliers often find it useful to draft a position paper outlining the factual and legal arguments in support of payment for a disputed claim. In addition, in most cases it is advantageous to engage the services of a qualified expert. Appropriate use of an expert can prove very useful, particularly when the audit involves medical necessity denials. In arguing the merits, other strategies that can prove successful include the use of medical summaries, illustrations, and other types of color-coded charts or graphs depicting the claims at issue that are user-friendly for the decision maker.
Audit Defenses
In addition to advocating the merits of a claim through various techniques, certain legal defenses are available. Defenses that have proven valuable for providers and suppliers challenging Medicare audit determinations include: invoking the treating physician rule, arguing the “Waiver of Liability” defense, arguing the provider is without fault, challenging the timeliness of the audit and/or claim denial, and challenging the statistical extrapolation (if one was involved).
A. Treating Physician Rule B. Waiver of Liability C. Provider without Fault
Additionally, the provider without fault defense may be employed in the case of post-payment review denials. The Medicare provider without fault provisions, Section 1870 of the Social Security Act, states that payment will be made to a provider if the provider was without “fault” with regard to billing for and accepting payment for disputed services.
As a general rule, a provider will be considered without fault if he exercised reasonable care in billing for and accepting payment, i.e., the provider complied with all pertinent regulations, made full disclosure of all material facts, and on the basis of the information available, had a reasonable basis for assuming the payment was correct.
“Fault,” for purposes of the provider without fault provision, is defined as follows:
(a) An incorrect statement made by the individual which he knew or should have known to be incorrect; or
(b)