RECOVERY AUDIT CONTRACTORS and MEDICARE AUDITS

Failure to furnish information which he knew or should have known to be material; or

 

                        (c)        With respect to the overpaid individual only, acceptance of a payment, which he knew or could have been expected to know, was incorrect.

 

In addition, providers also will be deemed to be without fault in the absence of evidence to the contrary, if the overpayment was discovered subsequent to the third calendar year after the year of payment.

D.    Reopening Regulations

Medicare regulations recognize that, in the interest of equity, Medicare providers and suppliers must be able to rely on coverage determinations.  Accordingly, the Medicare regulations place restrictions upon the permissible timeframe for reopening determinations.  According to the federal regulations governing the Medicare appeals process, once an initial determination to pay a claim has been made, the claim can be only reopened for review within a certain time period. 

Pursuant to 42 C.F.R. § 405.980 (b), a contractor may reopen and revise its initial determination:

Within 1 year from the date of the initial determination for any reason;

 

Within 4 years of the date of the initial determination for good cause as defined in 405.986.

 

405.902.

 

At anytime if the initial determination is unfavorable, in whole or in part, to the party thereto, but only for the purpose of correcting a clerical error on which that determination was based.

 

Pursuant to 42 C.F.R. § 405.986, “good cause” may be established when:

 

There is new and material evidence that—

 

Was not available or known at the time of the determination or decision; and

 

May result in a different conclusion; or

 

The evidence that was considered in making the determination or decision clearly shows on its face that an obvious error was made at the time of the determination or decision.

 

Further, according to the Medicare Financial Management Manual, “If an overpayment is determined based on a reopening outside of the above parameters, the FI or carrier will not recover the overpayment.”

E.     Challenges to Statistics

In many post-payment audits, CMS will audit a small sample of a provider’s records and, if it finds an overpayment, CMS will extrapolate the overpayment to the provider’s entire patient population.  The MMA sets limits regarding when statistical extrapolation may be used, and the Medicare manuals establish guidelines for CMS to follow when performing an audit based upon a statistical sample.  If an extrapolation is flawed, it may be successfully challenged, bringing the total dollars at issue to the “actual” alleged overpayment, and not the extrapolated alleged overpayment.  For example, in one recent case challenged by this firm, CMS alleged an “actual” overpayment of approximately ,000, which it then extrapolated to render its determination that the provider had been overpaid over .5 million.  This firm was successful challenging the methodology of this statistical extrapolation and the extrapolation was overturned. 

Pursuant to Section 935 of the MMA:

(1) LIMITATION ON USE OF EXTRAPOLATION. –A Medicare contractor may not use extrapolation to determine overpayment amounts to be recovered by recoupment, offset, or otherwise, unless the Secretary determines that –

 

(A)             there is a sustained or high level of payment error; or

 

(B)              documented educational intervention has failed to correct the payment error.

 

If it fails to do so, a Medicare provider may have success challenging the validity of the extrapolation.

V.                CONCLUSION

 

To contact Wachler and Associates at 248-544-0888 or http://www.racattorneys.com

Pages: 1 2 3 4