Articles Posted in Medicaid

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Appealing an overpayment demand can be a challenging task for healthcare providers. Whether the demand stems from claim denials or an audit, the appeals process can involve significant amounts of documentation; complex medical, legal, or coding issues; contract or regulatory review; attorneys; and independent experts. The process may also take months or years to resolve. While some providers with strong cases will likely benefit from pursuing the full appeals process, others may ask if there is a quicker and simpler way. Is it possible to settle the overpayment demand for less than the original demand? The answer often depends on the type of payor.

Commercial insurance plans are often the most likely to entertain the possibility of settlement. Commercial plans perform much the same cost/benefit analysis as any other business and, while it may vary greatly from case to case, may be willing to discuss a final settlement of an overpayment demand. However, it is often helpful for the provider to engage with the early levels of whatever appeal process is available, including submitting documentation and refuting the plan’s assertions and arguments, in order to strengthen the provider’s position.

Where Medicaid is the ultimate payor, a provider may find limited flexibility to discuss settlement. In these cases, the provider is likely dealing directly with a state agency or a state contractor. However, because much of the funding for state Medicaid programs is federal funding, state agencies and contractors are often required to answer to federal authorities regarding the use of Medicaid funds. This dynamic often restricts the state’s ability to resolve overpayments with the provider and requires them to fully litigate the alleged overpayment through the available appeals process.

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Appealing Medicare claim denials and overpayments is a common yet often misunderstood part of providing care to Medicare beneficiaries. Any healthcare provider should be familiar with the appeals process and some common issues that may arise. Although Medicare audits were temporarily suspended due to the COVID-19 pandemic, they have since resumed.

When a Medicare contractor denies a claim, whether as part of a pre-pay, post-pay, or other type of review or audit, the provider generally has a right to a lengthy appeal process. The process often begins before the denial of the claim itself. The provider may receive Additional Document Requests (ADRs) from the contractor demanding information or documentation on a claim or claims. These requests should be reviewed carefully, however they often contain boilerplate language and it may be difficult to determine which specific documentation the contractor is requesting.

Once a claim has been denied, the first level of appeal is Redetermination before the same contractor that made the initial denial. A provider must request Redetermination within 120 days of the claim denial, or the appeal may be forfeit. A shorter deadline applies to stop recoupment on overpayment demands stemming from the denials. The second level of appeal is Reconsideration before a Qualified Independent Contractor (QIC). The QIC is separate from the contractor that initially denied the claims. A provider often has the opportunity to submit additional documentation at Redetermination and Reconsideration. A provider may also retain an expert to review the contractor’s assertion or submit write-ups on the individual claims.

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Many Medicare practitioners, providers, and suppliers do not directly bill for the services they supply and similarly do not directly receive reimbursement. Billing and reimbursement may occur through an employment or independent contractor relationship, through a billing company, or through another arrangement. However, each of these arrangements must comply with the Medicare assignment of payment rules that dictate how and to whom the practitioner, provider, or supplier may assign their right to receive reimbursement from Medicare.

The general rule is that Medicare will pay assigned benefits only to the physician, practitioner, or supplier who furnished the service, and not to another person or entity. To reassign payment to another person or entity, an arrangement must meet one of several enumerated exceptions. The most common exceptions are:

Payment to Agent: Medicare may make payment, in the name of the provider, to an agent who furnishes billing or collection services. In general, the agent or billing company may not have a financial interest in the dollar amount billed or the actual collection of payment, and the agent must act under payment disposition instructions which the provider may modify or revoke at any time. Different provisions may apply if the agent merely prepares bills and does not receive payment for the provider or supplier.

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On January 28, 2021, The Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), and in accordance with an Executive Order issued by the Biden Administration, announced a Special Enrollment Period (SEP) for individuals and families to gain coverage on the Affordable Care Act (ACA) health insurance Marketplace. Due to the uncertainty caused by the COVID-19 pandemic, CMS determined that the public health emergency poses exceptional circumstances for consumers in obtaining health insurance. The SEP will be available to individuals in 36 states which participate in Marketplaces using the Healthcare.gov platform. CMS is encouraging states using their own Marketplace platform to offer a similar SEP. CMS’s goal is to guarantee quality, affordable coverage to more families during the COVID-19 pandemic.

The SEP will begin on February 15, 2021, and end on May 15, 2021. Marketplaces using Healthcare.gov will make operational a SEP for all eligible Marketplace users in the state. Eligible consumers who are submitting a new application, or current users who are modifying an existing application, may apply for coverage. Users will be able to access the SEP through various platforms, including Healthcare.gov, the Marketplace call center, or direct enrollment outlets. Consumers can obtain assistance with coverage from a network of more than 50,000 agents and brokers registered with the Marketplace and over 8,000 individuals trained in assisting with Marketplace coverage.

States with their own Marketplaces can, but are not mandated, to offer a similar enrollment period, although it is CMS’s recommendation that these states establish a SEP as well. Marketplace coverage is prospective; therefore, it will begin the first day of the month after an individual enrolls using Healthcare.gov. Current users must update their existing application to claim the SEP and to receive a determination on whether they are eligible. No additional application questions, documentation, verification requirements, or qualifying events such as job loss or the birth of a child, will be necessary for consumers to show they qualify for the SEP. Some consumers may already qualify for existing SEPs, Medicaid, or the Children’s Health Insurance Program (CHIP), and can find out if they are eligible using Healthcare.gov. Beginning February 15, 2021, consumers seeking to enroll using the SEP can find out if they qualify by using Healthcare.gov, and are no longer limited to calling the Marketplace call center. Eligible consumers will have 30 days after submitting an application to select a plan. Current enrollees will be able to switch to any plan available in their area without being restricted to the same coverage level as their current plan.

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On December 22, 2020, Centers for Medicare & Medicaid Services (CMS) released the 2020 list of Measures Under Consideration (MUC). The MUC is a list of quality and efficiency measures, based on data collected from providers, under consideration for adoption as rules under Medicare. The 2020 measures focus on reducing the administrative burden on providers, prioritizing health outcomes, and encouraging digital innovation, particularly regarding data collection and evaluation.

In accordance with the Meaningful Measures Initiative of 2017, digital innovation remains a top priority for CMS in developing quality measures. The Meaningful Measures Initiative was created to reduce the regulatory and reporting burden on providers and focuses on identifying the highest priority areas for quality improvement and measurement to improve patient outcomes. Since its launch, the Meaningful Measures Initiative has provided better quality metrics that are relevant to various providers. The 2020 MUC follow the Meaningful Measures Initiative by focusing on goals such as creating trackable and measurable outcomes, reducing healthcare disparities, cost efficiency, the modernization of reporting mechanisms, and reducing administrative obstacles for providers so they can better focus on quality care for patients, rather than paperwork. A majority of the measures utilize digital collection of data, rather than requiring providers to use traditional pen-and-paper data collection.

The 2020 MUC include:

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On December 16, 2020, the Department of Health and Human Services (“HHS”) announced that it would begin Phase 3 of general distributions under the Provider Relief Fund (“PRF”) and that Phase 3 would be larger than initially planned. The PRF is a $175 billion fund created Congress through the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic. The PRF is administered by HHS through the Health Resource Services Administration (“HRSA”). HHS has subdivided the PRF into various general and targeted distributions.

Earlier in 2020, HHS had made two general distributions under the PRF. The Phase 1 general distribution consisted of $50 billion in financial payments, released in two successive tranches of $30 billion and $20 billion, to healthcare providers based to providers who billed Medicare. The Phase 2 general distribution consisted of an additional $18 billion in financial payments to providers that billed Medicaid, dentists, assisted living facilities, and providers that were not eligible under the terms of Phase 1 due to a change in ownership.

On October 1, 2020, HHS announced the Phase 3 general distribution. The Phase 3 general distribution was initially planned to consist of $20 billion on financial payments to providers who were either excluded from the initial two phases, or who were eligible under the first two phases but required additional funding to cover ongoing financial losses accrued during the pandemic. The following providers are eligible for Phase 3 General Distribution funding: (1) Providers who have previously received, rejected, or accepted a General Distribution PRF payment; (2) behavioral health providers, including those that have previously received funding; and (3) healthcare providers that began practicing January 1, 2020 through March 31, 2020. All providers who receive payments must attest to receiving the payment and accept the associated Terms and Conditions.

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On November 16, 2020, the Centers for Medicare & Medicaid Services (CMS) released its 2020 Estimated Improper Payment Rates. Under the 2019 Payment Integrity Act, CMS is required to review Medicare Fee-For-Service (FFS), Medicare Part C, Medicare Part D, Medicaid, and the Children’s Health Insurance Program (CHIP) and estimate the amount of improper payments made under each program.

The reported improper payment data for CMS FY 2020 represents claims submitted July 1, 2018 through June 30, 2019. Due the COVID-19 pandemic, CMS temporarily halted all data requests to providers and state agencies regarding incorrect payments from March to August 2020. To compile the report, CMS adjusted calculation methods for reporting improper payment rates for the 2020 Agency Financial Report (AFR), using data already available at the time of the COVID-19 pandemic or data voluntarily provided. The calculated rates still meet national precision requirements.

The FY 2020 improper payment rate for Medicare FFS, which includes Part A and Part B, was estimated to be 6.27% or $25.74 billion. This represents a notable decrease from FY 2019, for which the improper payment rate was estimated as 7.25%, or $28.91 billion. The result of this decrease is likely due to reductions in the improper payment estimates for home health and skilled nursing facilities, which saw a $5.90 billion and $1 billion decrease, respectively. These decreases are likely due to several policy clarifications by CMS.

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On November 9, 2020, the Centers for Medicare & Medicaid Services (“CMS”) released the 2020 Medicaid and Children’s Health Insurance Program (“CHIP”) managed care final rule. The previous rule was released in 2016 and was extremely strict with its requirements, causing some states to struggle to comply. Since 2016, CMS’s goal has been to reduce the financial and administrative burden of the program, as well as reducing any federal regulatory barriers.

When the 2016 rule was released, many commenters wished for greater state-to-state flexibility to establish Medicaid and CHIP payments because every state had different needs for its enrollees. The 2020 final rule took note of that concern and now allows states much greater flexibility to set up payment schedules. CMS expects that the final rule will increase state flexibility in administering the program without having to cut off anyone’s access to the program—This would not have been possible based on the 2016 final rule.

Specifically, the final rule significantly revised eight areas of the regulatory framework:

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On November 4, 2020, the Department of Health and Human Services (“HHS”) proposed a new rule that would require HHS to review many of its regulations every ten years. HHS proposed the new rule pursuant to the Regulatory Flexibility Act (“RFA”), which was enacted under President Carter in 1980. Under the proposed rule, every ten years, HHS would review a regulation to determine whether it is still needed, whether it is having the appropriate impacts, and whether it ought to be revised or rescinded. Regulations that are not timely reviewed would expire.

Nearly all regulations would undergo a two-step review. HHS would first determine whether the RFA applies to a regulation by assessing whether they have a significant economic impact on a substantial number of small entities. If the RFA applies, HHS will then conduct a more detailed review of the regulation and consider: (1) the continued need for the rule, (2) complaints about it, (3) the rule’s complexity, (4) the extent to which it duplicates or conflicts with other rules, and (5) whether technological, economic, and legal changes favor amending or rescinding the rule. Public comments will be accepted as part of this review process.

The following regulations will not be subject to this review: regulations that are jointly issued with other agencies, regulations that legally cannot be rescinded, and regulations issued with respect to a military or foreign affairs function or addressed solely to internal management or personnel matters. Regulations that affect the regulations of other agencies will be reviewed in conjunction with those agencies.

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The Department of Health and Human Services (HHS) announced on Wednesday, October 28, 2020, that an additional $333 million in performance payments will be granted to nursing homes that reduced their COVID-19 death and infection rates during August and September of the COVID-19 pandemic. HHS will allocate these payments to more than 10,000 nursing homes that successfully addressed the COVID-19 pandemic and continue to incentivize infection control, training, safety improvements, and protection of the vulnerable elderly population.

These payments represent phase one of the Nursing Home Quality Incentive Program, a five phase, $2 billion incentive program, announced by HHS and the Trump Administration in September 2020. For a nursing home to qualify for payments under the incentive program, current certification as a nursing home or skilled nursing facility (SNF) is required, and the facility must receive reimbursement from CMS. Nursing facilities are also required to submit a minimum of one of three types of data sources to check eligibility and collect important provider information. These data sources include: Certification and Survey Provider Enhanced Reports (CASPER), Nursing Home Compare (NHC), and Provider of Services (POS).

The incentive program will be divided into five phases, with nursing homes receiving September payments early in November and an additional four opportunities to receive incentive payments in the following months. The five phases of the program correspond with five successive monthly periods in which nursing homes can receive incentive payments for reaching certain goals. Specific goals will vary based on local COVID-19 statistics.

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