Sloppy Billing and Medicare Revocation

The revocation of enrollment in the Medicare program is an ever-present threat for providers and/or suppliers (“health care providers”). Federal regulations allow the Centers for Medicare & Medicaid Services (“CMS”) to revoke the Medicare billing privileges of enrolled health care providers. The expansion of this regulatory authority presently provides for 22 separate actions (reasons) that CMS may utilize to revoke health care providers’ Medicare billing privileges. This article will address one such action, revocation of Medicare enrollment due to abuse of billing privileges based on “a pattern or practice of submitting claims that fail to meet Medicare requirements.”

Under 42 CFR 424.535(a)(8)(ii), when deciding whether a health care provider has engaged in a pattern or practice of submitting substandard claims that do not meet Medicare requirements, CMS will look to six distinct areas in its analysis:

  • The percentage of submitted claims that were denied;
  • The reasons for the claim denials;
  • Whether the health care provider has a history of final adverse actions and the nature of such actions;
  • The length of time over which this pattern continued;
  • How long the provider has been enrolled in Medicare; and
  • Any other information that CMS deems relevant to its determination whether the health care provider has engaged in a pattern or practice of submitting noncompliant Medicare claims.

In analyzing these areas, CMS will focus on the egregiousness of errors, and cite the lack of quality in medical records necessary to justify the submitted claim, such as records that fail: (1) to establish that a service occurred and/or was performed by the provider submitting the claim; (2) to establish medical necessity or support that the provider had a face-to-face encounter with the patient; or (3) to establish the criteria for a certain level of code. Additionally, patient records from different patients and dates of service that appear templated and repetitive are highly suspect for having been cloned from one visit and one patient to the next. The more experienced the provider, the longer the period of error-prone billing, and the more egregious the errors, the more likely it is that CMS will render a determination of an improper “pattern and practice.”

In addition, when contemplating the revocation of Medicare billing privileges, CMS will take into consideration other important factors such as whether the health care providers timely responded to opportunities to improve their Medicare billing practices by responding to audit results and/or by accepting one-on-one educational opportunities with CMS. Likewise, other factors CMS may consider in the analysis include the percentage of denied claims, as well as the number and quality of appeals of payment denials and whether those denials were upheld.

In short, CMS, in its analysis, considers whether the health care provider made a good faith attempt to comply with all the applicable Medicare billing requirements, or whether there appears to be a continued disregard, willful indifference or outright rejection of Medicare standards and refusal to remedy same. To reject or ignore CMS’s efforts to voluntarily improve one’s billing and claims submission practice is flirting with a revocation action. Appealing claim denials and learning from the results of the appeals are also important factors.

Moreover, health care providers must be mindful that delegating their Medicare billing to their staff and/or a third party, such as billing agencies, does not obviate liability. Indeed, it is the health care provider’s responsibility to ensure that claims submitted to Medicare for reimbursement fully comply with all of CMS’s regulations and protocols. To that end, intentional misconduct and/or fraudulent intent is not required for revocation. In other words, even if a health care provider did not know that staff or billing company was submitting improper claims for reimbursement and was acting without an intent to defraud, he or she could still face a revocation action if the non-compliance is not timely and adequately rectified.   

CMS will continue to hold providers accountable for complying with the myriad regulations and rules pertaining to the submission—and justification—of claims and codes contained therein. If CMS determines that health care providers did not make a good faith effort to educate themselves on the appropriate claims submission practices and consistently failed to submit claims that comply with the Medicare requirements, it will initiate action to revoke the providers’ Medicare billing privileges. It is, therefore, imperative that health care providers ensure immediate compliance with the numerous requirements or run the risk of not only having individual claims denied, but a revocation action as well.

Care must be taken to avoid revocation actions, for not only can an adverse result disallow future treatment of or provision of services to Medicare recipients, it will also lead to collateral consequences such as credentialing actions with other health care insurers and hospitals, adverse licensing Board actions, and damage to one’s reputation that will encumber the ability to advance in one’s career.

 How Frier Levitt Can Help

Frier Levitt attorneys have significant experience in advising Medicare providers on compliance issues and representing health care providers in administrative proceedings involving CMS, including Medicare requests for reconsideration and appeals, and have successfully defended providers in appeals of CMS revocation determinations, ensuring their continued participation in the Medicare program. Contact Frier Levitt today.

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