All physicians and medical providers who treat Medicare patients know that the Centers for Medicare and Medicaid Services (“CMS”) conduct frequent audits of healthcare practices, and that these audits can result in significant overpayment demands. Typically, these audits are focused on outliers or providers with aberrant billing patterns. However, a separate area of focus is on providers who bill a targeted code.
Amniotic Fluid Injections
Over the past year, the CMS has been focusing its efforts specifically on injections derived from amniotic stem cells. Providers of all specialties, ranging from orthopedic surgeons to podiatrists, have received the same amount of scrutiny. The demands are based wholly on one issue: these injections were never given Food and Drug Administration (“FDA”) approval and should therefore have never been on the market.
However, this issue is not as simple as the CMS suggests, and in fact, these overpayments are based on flawed reasons.
FDA Enforcement Discretion
In November 2017, the FDA stated that it would exercise “enforcement discretion” while manufacturers would determine whether their products would meet the HCT/P criteria. In other words, the FDA would refrain from acting against companies marketing amnio products that had not been approved in the normal approval process, relieving all premarket review and approval requirements during this period.
This guidance was updated and revised in July 2020, extending the enforcement discretionary period through May 31, 2021, to give manufacturers additional time to determine whether the HCT/P premarket approval requirements were met. Notably, this discretionary period only applied to those HCT/Ps which did not raise reported safety concerns or potentially significant safety concerns, as most of the products that remained on the market during this period did. Further, the marketing of HCT/Ps under this framework continued through May 31, 2021.
Sometime in 2022, providers administering these products to patients began receiving significant overpayment demands from CMS. Since these products were never FDA approved, the CMS asserted that Medicare could not legally pay for this service. Many small practices were left with overpayment demands in excess of $100,000, and many other overpayment demands were significantly higher.
No Guiding Regulations
Unlike most CMS overpayment demands that deal exclusively with medical necessity questions, these overpayment demands revolve around complex and novel legal issues that most billers, practice managers, and certified professional coders are simply not equipped to navigate. The complexities of the FDA regulatory framework – as well as CMS’s own rules – make this issue very difficult to manage without competent legal counsel.
Most times, the CMS’ auditors will base overpayment demands on criteria set forth in Local Coverage Determinations (“LCD”). However, in these cases, there is no governing authority in the form of an LCD, National Coverage Determination, or other guidelines. Therefore, the legal and medical necessity arguments that need to be made to successfully rebut the allegations in the CMS’ overpayment demand requires working closely with legal counsel.
How Frier Levitt Can Help
Frier Levitt has decades of experience handling payer audits and overpayment demands. Our attorneys have successfully navigated all manner of overpayment demands from Medicare, Medicaid, and commercial insurance providers, and have litigated the issue of amnio injections on behalf of numerous clients before Administrative Law Judges. If you receive an overpayment demand from Medicare related to amnio injections, call Frier Levitt today.
