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Medicare Audits and Recoupment Lawyers

Are You a Medicare Provider Facing an Audit?
Or Have You Received Notice of a Reopened Claim?

Contact us. We can help.

Frier & Levitt has successfully guided many clients through the Medicare Audit process. Combining the knowledge of our dedicated health law attorneys with our skilled litigation department we craft a strategy tailored to each client’s particular situation.

Our attorneys are uniquely skilled in both the appeal process and the laws and rules governing Medicare coding and billing. We have succeeded in recovering hundreds of thousands of dollars on behalf of our clients. If you are faced with a Medicare Audit, feel free to contact one of our attorneys. 

The Complex Matrix of Laws Facing Medicare Providers

Medicare Providers (physicians, hospitals, pharmacies, DME providers, etc.) face the Herculean task of interpreting the complex matrix of laws, rules, and policies when attempting to file claims with the Centers for Medicare and Medicaid (CMS) for services provided to Medicare recipients.

CMS further complicates this process by providing “guidance” through a variety of resources, including position papers, clarification letters, provider seminars, and internet postings. It is not uncommon for CMS rules to be in conflict with one another, further frustrating the efforts of Providers to adjudicate claims.

Merely receiving payment from CMS is no assurance that a Provider has billed or coded correctly for a service for which they are requesting payment. 

CMS May Reopen Any Claim

One of the many burdens of participating in the Medicare program is that CMS may reclaim payment at some future date. CMS has the ability under the law to “Reopen” any individual claim within 12-months of payment to the Provider, and may Reopen a claim for an additional 36-month with a showing of “Good Cause.”

The Reopening of Medicare claims can be initiated via a number of mechanisms. The three most common are
(i) review by the Medicare Administrative Contractor (MAC);
(ii) review by the Medicare Program Safeguard Contractor (Safeguard Contractor); and
(iii) audits initiated by the Office of the Inspector General.

Medicare Administrative Contractors (MACs)

A MAC is the CMS agent with which Providers are likely most familiar. The MAC is a local entity with which CMS contracts to adjudicate claims and make payment to Providers.

The MAC has the authority to review claims for any or no reason within the first 12 month after a claim has been paid. They may then require return of the fees that they determine are overpayments. The MAC may recover overpayments through a process known as “Recoupment” whereby the MAC deducts the overpayment directly from future payments due the Provider.

Safeguard Contractors

Safeguard Contractors are contracted by CMS to detect fraud and abuse in the Medicare Program. As part of their duties, Safeguard Contractors conduct investigations to determine the facts and magnitude of alleged fraud and abuse. Upon completing investigations, Safeguard Contractors determine whether to refer the investigations as cases to law enforcement.

According to the OIG, “CMS expects (Safeguard Contractors) to be innovative and effective in data analysis, moving beyond the capabilities of the MAC fraud units.” And “CMS expects a significant part of the Safeguard Contractor’s data analysis to be proactive, i.e., self-initiated exploratory analysis that seeks previously unidentified patterns or instances of fraud and abuse.”

The Safeguard Contractors are more aggressive than the MACs at seeking out potential fraud and abuse. Where the Safeguard Contractor finds that coding and billing issues do not rise to the level of criminality, but are nonetheless inappropriate, they convey these findings in a formal report to the MAC, who then will attempt to recover any overpayments identified by the Safeguard Contractor.

The Office of the Inspector General (OIG)

The OIG has broad powers over the Medicare Program which range from evaluating the performance of CMS and its contractors in detecting and controlling fraud to directly investigating fraud and abuse by Providers directly. The OIG employs broad, and constantly evolving, strategies and tactics to identify and prosecute fraud and abuse in the Medicare system.

Often the OIG employs statistical analysis to identify Providers that are collecting fees from Medicare that deviate significantly from their peer group. Other tactics have been as simple as merely auditing claims paid to Providers that were greater than some arbitrarily selected figure.

Once the OIG has conducted an investigation they may turn their findings over to law enforcement for criminal prosecution or issue a report to CMS. The reports issued by the OIG are often the impetus for CMS to pursue reclamation of payments from Providers.

Recovery Audit Contractors (RACs)

In 2005 a demonstration project was introduced to evaluate the efficacy of yet another investigatory weapon for CMS, the Recovery Audit Contractors (RAC). RACs are private companies that are contracted by CMS to identify overpayments and underpayments made to Medicare providers. The money is “recovered” and returned to CMS through several different methods.

The RACs are paid a percentage of the overpayment which they identify, thereby providing the RAC with a financial incentive to find billing inaccuracies on the part of the Provider. This has led many in the healthcare industry to characterize RACs as bounty hunters. RACs are empowered to negotiate directly with Providers to reach settlements prior to referring their findings to the local MAC.  

Demand Letters for Reopened Claims

When a Medicare provider has a claim or claims Reopened they may receive a Demand Letter from their local MAC or they may receive a claim denial demand from a RAC. The Provider will then have 120 days within which to appeal that determination.

The law gives Providers a right to appeal.

The appeal process works in a similar manner to the judicial process with which people are most familiar. However, the Medicare appeal process actually more complicated than the typical judicial process and is not easily negotiated by those not inexperienced in the process.

There are five levels to the Medicare Appeals Process. However, the MAC may withhold or recoup funds beginning 30 days after issuance of a Demand Letter.

The first level of appeal is a “Redetermination”. At this first level the Providers appeal an individual of the local MAC that was not involved in the initial determination will conduct an independent review, including a review of the evidence, findings and additional evidence submitted by the Provider or obtained by the MAC.

The second level of appeal is a “Reconsideration”. The appeal is handled by a Qualified Independent Contractor (“QIC”). The QIC will conduct an independent, on-the-record review of your case. The QIC has not had any involvement in the initial determination or redetermination. If a questions of medical necessity has employed as a reason of denial of a claim, the QIC must utilize an independent physician as part of the Reconsideration.

The third level of appeal is a hearing before an Administrative Law Judge (“ALJ”). The ALJ is a hearing officer that is employed by CMS that is independent of the MAC or the QIC.

The forth level of appeal is conducted by Medicare Appeals Counsel which is a panel of administrative judges and appeals officers. This is the final level of appeal within CMS.

The fifth level of appeal is before a judge in United States District Court. To appeal at this level the remaining amount in controversy must be at least $1,220.

At each level of appeal there is a time limit to file an appeal. These time limits range from 60 to 180 days.

The substance of an appeal can be range from simply providing additional documentation to challenges to CMS policy to complex procedural arguments. The key to a successful appeal is preparation, knowledge, and experience.

Contact Us

To discuss how Frier Levitt, LLC can help you, please call us at 973-618-1660, or toll-free at 1-888-Levitt-1 (i.e., 1-888-538-4881). You can also write to us using the contact form on the right side of this page.

We look forward to hearing from you.