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Mock RACing
David M. Glaser
Fredrikson & Byron, P.A.
Minneapolis, MN
[email protected]
(612) 492-7143
1
RAC Perspective Check
 What
does CMS eat for lunch?
 Y2K déjà vu?
 And yet, $3 million oncology
overpayment assessments are…. a
dime a dozen?
2
Recovery Audit Contractors (RACs)
 Mission:
Review Medicare claims on a
post-payment basis to “identify and
correct” underpayments and
overpayments.
 RACs use a “targeted review” of claims,
not a random sample.
 RACs may use extrapolation.
3
Types of RAC reviews
 Automated
- no human reviewer.
– Only used when there is “certainty” the
service is not covered or is incorrectly
coded under Medicare policies or
guidance.
– Also used for duplicate services or pricing
mistakes.
– No medical records reviewed.
 Complex
- human records review.
4
What are the RACs reviewing?
 Generally:
– Incorrect payment amounts
– Non-covered services (including services
not reasonable and necessary)
– Improper coding
– Duplicate services
 Each
RAC region has specific “issues”
the RAC reviews. CMS must approve
each issue prior to widespread review
by the RAC.
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Examples of RAC issues
for Region D (includes WA)
– claims must be submitted in
terms of 1 unit per 6 mg. instead of the
total number of milligrams.
 Excessive hydration services.
 Outpatient services within 72 hours of
admission.
 DRG validation – documentation on
discharge summary must match the
attending physician’s records.
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 Neulasta
BEFORE the RAC Audit
 Train
staff to recognize RAC
communication.
 Make sure all mail gets date stamped.
 Keep envelopes.
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Steps in the RAC process
1. Request
for medical records.
– Called “Additional Documentation Requests” or
“ADRs.”
– Complex reviews only.
– RAC must receive the records within 45 days of
the date of the request.
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Limits on Record Requests
 Providers
(e.g., hospitals)
– Up to 300 ADRs every 45 days for each
“campus unit.”
– “Campus unit” = facilities with same tax ID
number and same first three numbers in
the ZIP code.
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Limits on Record Requests
 Suppliers
(e.g., physicians)
Group size
Maximum ADRs per 45
(number of practitioners) days
Less than 5
10 records
6-24
25 records
25-49
40 records
50 or more
50 records
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Issue: Sending Records
 Do
you send any other dates of
service?
 Do you send outside records?
 Keep an EXACT copy of what goes in.
 Use tracked delivery.
11
Issue: When do you seek help?
 Do
you call a consultant when you get
the letter?
 Do you call a lawyer when you get the
letter?
 Do you call your insurer when you get
the letter? YES!
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Issue: Using Consultants
 Consider
using work product privilege.
 Discuss
the consultant’s role; is s/he an
advocate or a cop?
 Get
references. There are some horror
stories.
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Steps in the RAC process
1. Request
for medical records.
– Complex reviews only.
– RAC must receive the records within 45 days of
the date of the request.
2. Automated
or complex review begins.
–RAC has 60 days to review medical records.
3. Review
Results Letter.
–Discussion Period begins for complex review.
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Steps in the RAC process
4.
Demand Letter
– Discussion period begins for automated review.
– Rebuttal period of 15 days from the date of the
demand letter.
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Steps in the RAC process
5.
Recoupment and end of all Discussion
Periods.
– To avoid recoupment, provider/supplier must
submit request for Redetermination by the 30th
day.
– Recoupment begins and discussion period ends
41st day after Demand Letter.
6.
Appeals process begins with
Redetermination.
– Must file appeal within 120 days of Demand Letter.
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Provider/Supplier Options
period – Submit additional
information, discuss results and
possibly reach agreement with the RAC.
 Rebuttal – 15-day period to prevent
recoupment by showing financial
hardship.
 Redetermination – Begins the
traditional Medicare overpayment
appeals process. Next steps are
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Reconsideration and ALJ hearing.
 Discussion
Comprehensive Error Testing
Rate (CERT) program
 Another
Medicare post-payment review
program.
 Designed to estimate regional and
national payment error rates by
sampling large numbers of claims
across providers and suppliers.
 CERT reviews can result in adjustments
for overpayments and underpayments.
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Common themes in oncology
overpayment cases
 Improper
or retroactive application of local
coverage determinations (LCDs)
– There are often multiple versions of one LCD.
Limits on covered hemoglobin and hematocrit
levels change over time.
– Check the effective date of the LCD and the
revision history.
– Date of service in question must be prior to
LCD revision date in order for the LCD
version to apply.
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Issue: Denial for Procrit with code
285.8, “Other specified anemias.”
 Some
LCDs require the medical record to
reflect a diagnosis of “primary
erythropoietin deficiency.”
 Absent an overt statement, the claims
maybe denied.
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Response
 If
the diagnosis can be inferred from the
record, you have a strong defense.
 EPO level, creatinine clearance, renal
insufficiency, response to EPO help.
 Note: limits on covered hemoglobin and
hematocrit levels change with each
diagnosis code.
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Issue: Dosing dispute
 LCD:
“Medicare considers dosages
exceeding 200 mcg. per week for DPO to
be rarely reasonable and necessary.”
 The physician prescribed 400 mcg. every
other week.
 Assert overpayment because 400 mcg. of
medication was not “reasonable and
necessary.”
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Response
 The
total dosing is consistent with the
policy.
 The “treating physician rule” allows the
physician latitude to treat patients.
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Fighting Back Against Medical
Necessity Challenges
 Use
the “treating physician rule.”
 The theory is that the patient’s physician
is objective. Therefore, the physician’s
opinion receives deference.
 Medicare’s legislative history supports
this argument.
28
The “Treating Physician Rule.”
“It is a well-settled rule in Social Security Disability cases
that the expert medical opinion of a patient’s treating
physician is to be accorded deference by the secretary
and is binding unless contradicted by substantial
evidence… This rule may well apply with even greater
force in the context of Medicare reimbursement. The
legislative history of the Medicare Statute makes clear the
essential role of the attending physician in the statutory
scheme; ‘the physician is to be the key figure in
determining utilization of health services.’” Gartmann v.
Secretary of the U.S. Department of HHS, 633 F.Supp.
671, 680-681(E.D. N.Y. 1986).
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The “Treating Physician Rule.”
A carrier is expected to place
“significant reliance on the informed
opinion of the treating physician” and to
give “extra weight” to the treating
physician’s opinion. Baxter v. Sullivan,
923 F.2d 1391, 1396 (9th Cir. 1991).
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The “Treating Physician Rule.”
CPM Ch. 30, § 100.2 forbids carriers from
recouping an overpayment on the basis of a
lack of medical necessity if a situation is
ambiguous enough that the carrier requests its
own physician consultant to review whether the
services are covered.
 This should place the burden of proof on a
carrier during an appeal.
 It provides a firm ground for challenging the
carrier’s arguments that office visits can be
denied as not medically necessary.

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Issue: Statistical Sampling
 Samples
of 30 claims are regularly used
to project substantial overpayments.
 Medicare has policy related to sampling.
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Response

Most samples have readily apparent flaws.
–
–
–
–
–

Small sample size yields low precision.
Skewed sample requires stratification.
Sample isn’t random/representative.
Low sample error rate.
Unjustified extrapolation.
Pros and cons of fighting over the statistics
– Expert testimony is expensive.
– The policy Manual is horribly unhelpful.
– Statistics on appeal.
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Issue: Services aren’t “incident
to”
 Infusion
is denied with the notation that
the service did not qualify as “incident
to.”
 “Direct supervision” is required for
services (e.g., chemotherapy infusions)
provided in the office setting.
 Services must be initiated by a member
of the group.
34
Response
 Neither
the regulations nor policy
specify any particular documentation.
 Demonstrate that a physician (ideally
the physician on the claim) was present.
35
Issue: Chart isn’t signed
 RAC
denies ten claims. Says the lack
of signature requires denial.
 May argue there is no evidence of
presence.
36
Response: Signatures Not Required
 Use
various publications from CMS that
indicate a signature isn’t required.
 Know that recent Manual instruction
tells MACs to deny unsigned charts.
 Note that signature doesn’t indicate
presence.
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Issue: Dating Error
 The
nurse indicated on the
chemotherapy sheet that the date of
service was 3/18/10, bill was 3/19/10.
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Response: Dating errors aren’t
overpayments
 The
Infusion Log Sheet and Appointments
Detail Report contained in the set of
documents for this claim both show that Joe
Smith was seen on 3/19/04. The Chemo
Appointment Log for 3/19/04 also shows that
Joe Smith signed in on that date of service.
We should note that no claim was submitted
for 3/18/04 because no services were
rendered that day.
39
Issue: RAC denies a 2007 service
 On
1/11/11, RAC sends a letter denying
a 9/30/07 service.
 There is an argument the service was
not medically necessary.
40
Response: Beyond RAC time limit
 RACs
may only recover payments
made three years before the date of the
medical records requests (complex
reviews) or the date of the overpayment
notification (automated reviews).
 MACs can go back further. Unclear
how that plays out.
41
Issue: Off Label Use
 77
year old patient. Receiving chemo.
High risk for neutropenia. Patient lives
130 miles from the clinc.
 Administer Neupogen on the day of
Chemo.
 FDA label says Neupogen not to be
administered 2 weeks before or 24
hours after chemo.
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Response: Off label Use Ok
 42
U.S.C. § 1395x(t)(2)(B)(ii)(l):
provides for Medicare coverage of FDAapproved drugs where there is a
“medically-accepted indication” for the
off-label use of the drug in an anticancer
chemotherapeutic regimen.
43
Off label use OK
 Medicare
Benefit Policy Manual, CMSPub. 100-02, Ch. 15, § 50.4: “Do not
deny coverage based solely on the
absence of FDA-approved labeling for
the use.”
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Issue: LCD Effective Dates and
Revisions
 Date
of service: 1/28/2007
– 78 year-old female
– Dx: anemia due to myelodysplastic syndrome
– Hemoglobin: 12.8
– Hematocrit: 36.2
 Procrit
and injection denied. HCT over 36.
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Issue: LCD Effective Dates and
Revisions
 Date
of service: 1/28/2007
– 78 year-old female
– Dx: anemia due to myelodysplastic syndrome
– Hemoglobin: 12.8
– Hematocrit: 36.2
 Procrit
and injection denied. HCT over 36.
 So let’s try again…
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LCD Effective Dates and Revisions
 Review
the versions of the LCD with
effective dates close to the date of
service in question.
 Examine the Revision History of the
LCD. Be aware it is not always
complete.
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Issue: Crummy E&M
documentation
 Patient
comes in for first visit after a
diagnosis of MDS.
 No time is documented.
 H&P consists of lines.
 Billed as 99214.
 RAC recodes as 99212.
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Response: Documentation isn’t
REQUIRED, just advisable
 Gather
all support that the service was
actually performed.
 Consider the schedule, nursing notes,
other chart entries, supplementing the
medical record, common sense.
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Role of Documentation: The Law
“No payment shall be made to any provider of
services or other person under this part
unless there has been furnished such
information as may be necessary in order to
determine the amounts due such provider or
other person under this part for the period
with respect to which the amounts are being
paid or for any prior period.”
Social Security Act §1833(e)
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Challenging Overpayments
 You
have 120 days to seek
Redetermination.
 Interest accrues from day one if you
don’t pay within 30 days, even if you
appeal.
 You get 60 days from Redetermination
to request QIC hearing.
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Challenging Overpayments
 If
you lose, and more than $500
remains at issue, you have 60 days to
appeal to an administrative law judge.
 Under new rules, you can not present
any evidence to the ALJ unless you
first presented it to the QIC. This
means you should at least consult with
counsel early in the process.
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Challenging Overpayments
 Every
overpayment assessment we have
seen has had at least one major error.
 CMS claims that providers win half of all
appeals.
 Statistics reveal that in the old days,
providers won 42% of all fair hearings, and
60% of all ALJ decisions.
 That means providers actually win nearly
77% of all appeals.
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“Without fault” defense
 Social
Security Act § 1870.
 Government must waive overpayments
when the provider/supplier is “without
fault” and recovery violates equity and
good conscience.
 After a certain period of time, there is a
presumption that the provider/supplier is
without fault.
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“Limitation of liability” defense
 Social
Security Act § 1879.
 The government may not recover an
overpayment where the
provider/supplier and the beneficiary
did not know and could not
reasonably be expected to know
coverage would be denied.
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