RAC Appeal Process Strategies

1
RAC Appeal Process Strategies

• Patrick C. Devine, Jr.
• Courtney A. Miller

2
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

3
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

4
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

5
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

6
Audit Areas and Top Error by Provider Type
Source Medicare RAC Program An Evaluation of
the 3-Year Demonstration
7
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

8
Overview of the RAC Review/Appeal Process

• RAC Review
• Initial Determination
• Recoupment
• Informal Appeal Rebuttal
• Formal Appeal
• 5 levels

9
Overview of Review and Appeals Process
Source American Hospital Association
10
RAC Review

• 2 Types of reviews
• Automated (software searching for clear errors)
• Complex (review of patient records)
• RACs authority to request records is subject to
  limits
• All requests should be channeled through RAC Team

11
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

12
Initial Determination

• RACs Initial Determination
• Timeframe for RAC determination
• 60 days after receiving records
• Failure to respond ???
• Possible defense
• Written notice to provider
• Reason for denial

13
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

14
Recoupment Timeline
Timeframe Medicare Contractor Provider
Day 1 Date of Demand Letter (Date demand letter mailed) Provider receives notification by first class mail of overpayment determination
Day 1-15 Day 15 deadline for Rebuttal request. No recoupment occurs Provider must submit a statement within 15 days from the date of demand letter.
Day 1-40 No recoupment occurs Provider can appeal and potentially limit recoupment from occurring
Day 41 Recoupment begins Provider can appeal and potentially stop recoupment
REDETERMINATION DECISION REDETERMINATION DECISION REDETERMINATION DECISION
Day 60 following revised notice of overpayment following redetermination Date Reconsideration request is Stamped in Mailroom, or Payment Received from the revised overpayment notice Provider Must Pay Overpayment or Must have submitted request for 2nd level appeal
Day 61- 75 Recoupment could begin on the 61st day Provider appeals or pays
Day 76 Recoupment Begins or Resumes Provider Can Still Appeal. Recoupment stops on date receipt of appeal
15
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?

16
Rebuttal

• Provider can rebut RACs 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

17
Formal Appeals Process

• 5 Levels (Medicare Appeals Process)
• Redetermination
• Reconsideration
• Administrative Law Judge Hearing
• Medicare Appeals Council Review
• Federal Court

18
Appeals Timeline
19
Results of the Demonstration
Claim RAC Claims with Overpayment Determinations appealed to FI appealed to QIC appealed to ALJ appealed to DAB appealed (all levels) appealed (all levels) favorable to provider favorable to provider of all claims overturned on appeal
Connolly 110,635 8,852 1,123 113 18 10,106 9.1 5,462 54.1 4.9
All RACs 525,133 88,721 23,775 5,357 198 118,051 22.5 40,115 34.0 7.6

• Connelly v. Viant??

20
Factors to Consider

• Time
• Cost of appeal
• Resources
• Quality of documentation
• Implications
• Clinical support
• Legal involvement

21
Outcomes

• Full Reversal
• No further action, RAC cannot appeal
• RAC must refund contingency fee
• Provider may be paid interest
• Partial Reversal
• Denial

22
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

23
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

24
Level 1 Redetermination

• No minimum requirements for amount in controversy
• FI has 60 days to approve/reverse initial
  determination

25
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

26
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

27
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

28
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

29
Level 3 ALJ Hearing

• Must be filed within 60 days of receipt of notice
  of QICs 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

30
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

31
ALJ Hearing

• Within 90 days of the hearing, ALJ must issue
  written decision
• Remand to QIC
• Dismissal
• Approve

32
Level 4 MAC Review

• Must file request within 60 days after receipt of
  ALJs 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

33
Level 4 MAC Review

• MAC reviews the ALJs decision de novo
• Limited to the evidence in the ALJs
  administrative record
• In some cases, briefs requested
• No right to a hearing
• MAC may adopt, reverse, modify or remand the case
  to ALJ

34
Level 5 Federal Court

• File appeal within 60 days of receipt of MACs
  decision
• Min. amount in controversy - 1,220
• File in USDC in the providers district

35
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

36
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

37
Advocating the Merits

• Not technically a defense
• Factual and legal arguments supporting payment
• Prepare position paper
• Use qualified expert to confirm medical necessity

38
Treating Physician Rule

• Medical necessity
• Treating physician in the best position to judge
• Physicians determination should be given more
  weight than RAC
• RAC uses medical professionals who have never met
  or assessed the patient

39
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

40
Waiver of Liability

• Maintain records of all communications with
  Medicare representatives
• i.e. Overpayment claim overturned in past

41
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

42
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

43
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

44
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

45
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 contractors 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.

46
Challenging the Statistics

• RACs may extrapolate in certain circumstances
• Must follow Medicares statistical guidelines
• Use a third party expert to challenge the
  validity of the extrapolation

47
Constitutional Challenge

• Possible Argument?

48
Conclusion

• Take steps to prepare NOW
• Establish a RAC Team
• Limit exposure
• Maintain adequate records
• Appeals process
• Deadlines
• Defenses

49
Questions

• Patrick C. Devine, Jr. pdevine_at_williamsmullen.com
  757.629-0614
• Courtney A. Miller
• cmiller_at_williamsmullen.com
• 757.629.0665