When the Government Tries to Change the Rules

We all know that the government doesn't fight fair. This is why it is so critical for healthcare professionals to understand their recourse when the government does not follow

their own guidelines. Providing audit appeal defense services to clients all over the country, we are seeing MACs and ZPICs making determinations that lead to significant error rates that turn into demands for refund requests that are significant.

The biggest issue we are finding with a lot of these audit performed retroactively is that they are applying guidelines that were not in affect at the time the services were rendered. For practices that are not aware of when and how to use Local Coverage Determinations (LCDs) this leads to significant loss. Most practices that receive a letter from a ZPIC realize the purpose of a ZPIC is to seek out fraud, waste and abuse and then make demands for refunds that are overwhelming. Lots of practices simply make the refunds or establish offsets, which should be the last thing you do.

In a recent case, I came across this very situation whereby the MAC and ZPIC audited a specific type service for "Medical Necessity" however, they were using an LCD for dates of service prior to the implementation of the policy and as a result, determined a 100% error rate that led to a demand for refund of more than $1.9 million from the client.In addition, because of the findings by the ZPIC, more than $1.2 million was withheld from payment to the practice. This is devastating not only from a repayment standpoint but from a lack of revenue coming through the door. The sad reality of this situation is the practice had to shut their doors, but are still responsible for repayment and are out of the monies for services they rendered their patients. DoctorsManagement was brought into the fold to perform clinical documentation review, specifically focusing on the findings of services not meeting "Medical Necessity" and to validate the extrapolation deployed by the MAC. While we had a very strong case to get the extrapolation thrown out using Frank Cohen's work on Post Audit Extrapolation, we had an equally strong case based on the pure negligence of the ZPIC and MAC to adhere to their own guidelines. With the help of noted healthcare attorney Robert Liles from LilesParker based in Washington, D.C., I was able to track down specific information to ensure our position was substantiated thus ensuring our client's ultimate success in not having to repay the demand and affording then now, the ability to demand payment from the carrier.

Below are specific guidelines related to LCDs that can be used in defending your practice when the government fails to follow their own rules.

13.7.3 - LCDs That Do Not Require a Comment and Notice Period (Rev. 71, 04-09-04)

When a comment and notice period is unnecessary, contractors may immediately publish a revised LCD electronically (e.g., Medicare coverage database, contractor Web site, email). In the following situations, the comment and notice processes are unnecessary:

*Revised LCD that Liberalizes an Existing LCD - For example, a revised LCD expands the list of covered indications/diagnoses. The revision effective date may be retroactive.

* Revised LCD that Makes a Non-Substantive Correction - For example, typographical or grammatical errors that do not substantially change the LCD. The revision effective date may be retroactive.

* Revised LCD that makes a Clarification - For example, adding information that clarifies the LCD but does not restrict the LCD. The revision effective date may be retroactive.

* Revised LCD that Makes a Non-discretionary

Coverage/Payment/Coding Updates - Contractors shall update LCDs to reflect changes in NCDs, coverage provisions in interpretive manuals, payment systems, HCPCS, ICD -9 or other standard coding systems within the timeframes listed in §13.4C. The revision effective date may be retroactive depending on the effective date of theNCD, etc.

* Revised LCD to Make Discretionary Coding Updates That Do Not Restrict - adding revisions that explain a coding issue so long as the revision does not restrict the LCD. The revision effective date may be retroactive

13.7.4 - LCD Comment and Notice Process

(Rev. 71, 04-09-04)

When a new or revised LCD requires comment and notice (See §13.7.2) contractors shall provide a minimum comment period of 45 calendar days on the draft LCD. After the contractor considers all comments and revises the LCD as needed, the contractor shall provide a minimum notice period of 45 calendar days on the final LCD.

Contractors shall solicit comments from the medical community. Carriers solicit comments from the Carrier Advisory Committee (CAC.) DMERCs solicit comments through the DMERC Advisory Process (DAP.) Contractors respond to comments either individually or via a comment/response document (see §13.7.4.2). Where appropriate, the contractor shall incorporate the comments into the final LCD. Contractors notify providers of the LCD effective date. New LCDs may not be implemented retroactively.

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