There has been a significant increase in post-payment audits – specifically – Medicare Part A and Medicare Part B (Fee for Service) medical record reviews. Unfortunately, this has been met with a significant decrease in experts to respond to these. As such, health care providers are faced with losing a large amount of previously earned revenue.
The steps required of a provider are often complex and will often require an expert to respond. The first step in the process is the healthcare provider receives (typically) is an Additional Development Request (ADR) or a Targeted Probe and Education (TPE) seeking portions of the medical record that supports the rationale for skilled services under the Medicare Part A and Medicare Part B Insurance benefit. It is imperative that the provider responds with the specificity of what is being requested. Responding with too little or too much will create problems with the auditor, often resulting in ADRs for similar encounters by the provider. Care and expertise are required at this very important first step. There is also a time limit to appeal – typically 35 days.
It is very common for the claim (or part of the claim) to be denied (resulting in a take back of previously earned revenue). At this point the provider has the right to petition a second opinion (for procedures for conducting appeals of claims in Traditional Medicare, i.e., Medicare Part A and Part B, see Section 1869 of the Social Security Act and 42 C.F.R. Part 405 Subpart I).
The claim appeals process has the potential to go up to five levels:
LEVEL 1: Redetermination by a CMS contractor (likely an intermediary i.e., Medicare Administrative Contractor – MAC):
For the First Level of Appeal (traditionally), the MAC is involved in deciding the results of the redetermination. The provider must file the request for redetermination with the contractor within 120 days from the date of receipt of the initial determination. Any supporting documentation to their redetermination must be supplied. At this level, many different people from various departments may be involved (legal, clinical, administrative, etc.). The right people with the right expertise must opine for the best chance for a positive determination (which is required within 60 days of the appeal).
An Expedited Medicare Part A Redetermination (Notice of Discharge or Service Termination) may also be made. If that is the case, a decision must be rendered within 72 hours.
LEVEL 2: Reconsideration by a Qualified Independent Contractor (QIC):
Should the provider be dissatisfied with the results of the redetermination, they may enter the Second Level of Appeal and request a reconsideration to be conducted by a Qualified Independent Contractor (QIC) within 180 days of the receipt of the decision. At this level, it is very likely that medical necessity will be reviewed closely by the QIC. Various medical experts (internal and external) will be required to respond for a favorable outcome as it is necessary to clearly explain the reason for disputing the redetermination decision. A decision will be rendered in 60 days.
LEVEL 3: Hearings before an Administrative Law Judge (ALJ) within the Office of Medicare Hearings and Appeals in the Department of Health and Human Services:
If the minimum monetary threshold is met and remains in controversy following a Qualified Independent Contractor’s (QIC’s) decision, the provider may request an Administrative Law Judge Hearing (ALJ) hearing within 60 days of receipt of the reconsideration decision. The reconsideration decision letter provides details regarding the procedures for requesting an Administrative Law Judge Hearing (ALJ) hearing. Generally, level 3 hearings are held virtually (video teleconference or telephone). A decision will be made within 90 days of request for hearing if the case will be heard.
LEVEL 4: Review by the Appeals Council within the Department Appeals Board in the Department of Health and Human Services.
In the event the provider is dissatisfied with the ALJ’s decision, they may request a review by the Appeals Council. The request for Appeals Council review must be submitted in writing within 60 days of receipt of the ALJ’s decision and must specify the issues and findings that are being contested. The Appeals Council must decide withing 90 days of receipt of the request for review whether the case will be heard.
LEVEL 5: Judicial Review in federal district court:
If the provider is dissatisfied with the Appeals Council’s decision, they may request judicial review in federal district court. The provider must file the request for review within 60 days of receipt of the Appeals Council’s decision and must specify the issues and findings that are being contested. The Appeals Council’s decision will contain information about the procedures for requesting judicial review. A decision for hearing will be made within 90 days of the request.
In summary – the steps for a post-payment audit may not only be complex but require various people from various departments as well as outside consultants to opine all within an often-tight timeframe. This has been made increasingly difficult as efforts to reduce hospital workforces during the pandemic have forced revenue cycle teams to redeploy existing staff to new areas. One consequence of this shift is that there is no suitable expertise to master the complex nature of post-payment audits.