No Appeal for Group of Hospitals Inadequately Reimbursed

On January 22, 2013, in a unanimous decision, the US Supreme Court rejected a bid from 18 Hospitals to revisit 25-year old Medicare reimbursement claims.

In the case of Sebelius v. Auburn Regional Medical Center, U.S. Supreme Court, No. 11-123, the providers claimed that from 1987 to 1994 the Centers for Medicare & Medicaid Services undercalculated Medicare payments for care provided to low income patients, based on the Supplemental Security Income (SSI) fraction.   number crunching

The US Supreme Court’s decision reinforces earlier decisions that the appeal was too old, where the imposed law governing these appeals is within 180 days of receiving the Notice of Program Reimbursement (NPR).  By regulation, the Secretary of HHS authorized the PRRB to extend the 180 day limit, for good cause, up to three years. See 42 CFR 405.1841(b) (2007).

The hospitals claimed it was unfair to impose the deadline under the circumstances, alleging the agency knew about and failed to disclose its calculation errors.

Should this same rationale apply to errors citizens make in calculating their tax liability? Do government vendors really need to also incur the expense of auditing payments received within a period as short as180 days, even where the particular agency is aware of an error in their methodology and chooses to not advise all other impacted?

Improvements to the ZPIC Audit Process for Florida’s Long-Term Care Providers

Authors: Starlett M. Miller and Stephanie F. Hedrick

During these times of thinning margins, where many businesses’ daily operations may be jeopardized by a month’s delay in the receipt of reimbursement, the fierce backlash the Centers for Medicare and Medicaid Services (CMS) received from nursing home owners and operators regarding prepayment policies implemented for the Zone Protection Integrity Contractors’ (ZPIC) audits was no surprise.

CMS established the ZPIC audits program to identify cases of suspected Medicare fraud, investigate suspected fraud in a thorough and timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not inappropriately paid and that any mistaken payments are recovered.  The ZPIC auditors’ focus has been on skilled nursing facilities, physicians, hospices, HME/Rehab facilities, and physical therapy providers located in the five “hot spot” zones for Medicare fraud, which includes the State of Florida.

Unfortunately, the initiation of a ZPIC audit process initially meant that the provider being audited may face significant challenges to their continued financial viability.  While some providers under investigation may experience a six month time frame for the audit, other providers have seen up to 18-24 months of prepayment reviews.  During the prepayment reviews, the providers were placed on very strict Medicare reimbursement limitations, in which a percentage of their claims undergo review before payment is authorized.

Inside Health Policy recently announced that the CMS modified these rules on August 23, 2012, which will be a significant improvement for long-term care providers.  Thanks in large part to the efforts by the American Health Care Association (AHCA) and the Florida Health Care Association (FHCA), nursing homes in Florida will no longer be subjected to prepayment reviews.   “CMS says circumstances surrounding the reviews indicated that there is still a potential problem with some nursing home documentation, but CMS can accomplish the necessary oversight without prepayment reviews.”  Helpfully, providers against whom ZPIC auditors initiated a prepayment review audit prior to August 23, 2012 who have not yet submitted their responsive documents are not required to submit the information to the ZPICs.

Stripping the prepayment component from the ZPIC auditors’ arsenal is a step in the right direction toward fairness and the restoration of due process in CMS’s ZPIC audits.  Nonetheless, ZPIC audits may still become a costly and daunting process for any healthcare provider.  Many providers will still need to utilize CMS’s appeals process to reverse or modify the decision of the ZPIC auditors.  McCumber Daniels attorneys are available to assist throughout the ZPIC audit process and provide guidance from the initial response to a ZPIC audit through the final appeals process.

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