Federal Court Vacates Two, Medicare ALJ Decisions with Extrapolations

Today is April Fool’s Day, but the story I am going to tell you today is no prank. On 03/25/2024, the U.S. District Court of the Southern District of Florida rendered its Decision on MedEnvios Healthcare, Inc. v. Xavier Becerra, in his official capacity as Secretary USDHHS. 2024 WL 1252264. The federal Court vacated two, ALJ Decisions upholding two, separate, extrapolated audits. This example highlights the importance of appealing ALJ Decisions to federal court, which will uphold the law versus CMS Rules.

MedEnvios is a durable medical equipment provider (DME). It was the target of two Medicare audits and both audits were extrapolated. MedEnvios’ argument is two-fold: (1) that its due process rights were violated because HHS failed to comply with the procedures set forth in statute, regulation, and “sub-regulatory guidance” that mandate “certain due process minimum protections be provided to health care suppliers in the statistical sampling and extrapolation process.” (Pl.’s Resp. at 9.) Specifically, MedEnvios objects to the Defendant’s exclusion of claims for which the Department never made a payment to MedEnvios from the sampling frame. Obviously if the zero-claims are not removed the number will be inflated or maybe even surpass what was actually paid to the provider during the specific timeframe. And (2) MedEnvios argues that the Defendant failed to provide sufficient documentation to support overpayments recalculated following partially favorable appellate decisions, allegedly depriving MedEnvios of notice. Following partially favorable decisions on appeal, the relevant contractor must “effectuate” the decision by recalculating the extrapolated overpayment amount to be recouped from the supplier based upon the revised decisions on individual sampled Medicare claims. The contractor then sends the supplier a revised demand letter reflecting the new overpayment amount. Without the underlying documentation showing how the contractor arrived at the new amount, MedEnvios claims that it lacked “the information necessary to mount a meaningful challenge to those recalculations.”

I bet that many readers today have felt the pain of having to defend themselves from an audit and knew the auditor was withholding data or documents, yet felt powerless. This Decision says it is not ok to not give all the information. The Court held that MedEnvios was and is prejudiced by the unavailability of the recalculation worksheets because MedEnvios did not receive three of the four relevant recalculation worksheets within enough time to satisfy its procedural due process rights by recreating the recalculations to verify the revised extrapolated amounts.

The Court held that the prejudice to MedEnvios in having to mount appeals without reviewing the contractors’ effectuation work easily outweighs any administrative difficulty of timely providing the worksheets. Provision of this information should be a negligible burden on the Department and its contractors. The MPIM already instructs that “[d]ocumentation shall be kept in sufficient detail so that the sampling frame can be re-created should the methodology be challenged. The contractor shall keep an electronic copy of the sampling frame.” MPIM § 8.4.4.4.1. Thus, contractors are already required to maintain this information, and the added burden of providing the information on request would be minimal. The Court therefore concludes that the Department has run afoul of MedEnvios’s procedural due process rights by failing to provide the documentation supporting the recalculated overpayment amounts.

So, what is the remedy for the Department’s failure to timely provide documents showing how the revised overpayment demands were calculated?

This Court vacated both ALJ Decisions upholding the two extrapolated amounts. This is a perfect example of why providers MUST appeal ALJ Decisions to federal court. The difference in the law and CMS’ Rules is vast. Not enough providers continue their appeal to federal court because of money. Litigation is expensive. However, in this case, attorneys’ fees were, most likely, much less than what CMS was alleging MedEnvios owed.

Have a great April Fool’s Day. Play a prank on a colleague. At the office, put tape under a coworker’s computer mouse, and watch them try to figure out why it’s not working!

Two Success Stories: (1) Getting a Provider’s Suspension of Medicaid Reimbursements Lifted; and (2) NCSU Wins the ACC!

A quick shout out to NC State University, my undergraduate alma mater, who won the ACC Tournament, beating out #1 ranked UNC!!!

I love legal success stories too. Because when my team wins, health care providers win.

Well, my firm and I had a success that I must share amongst my blog readers. I gave this blog a live read on RACMonitor this morning on Monitor Monday, so if you want to hear me read it, go to wherever you listen to podcasts and search for RACMonitor. I present on RACMonitor every Monday morning and have done so for the last 10 years!

One of my clients, a substance abuse facility, which provides SAIOP and SACOT services to the underserved in Idaho, is under civil and/or criminal investigation. The investigation began over two years ago, which is a material fact in this case. The substance abuse facility was being accused of health care fraud because it gave out gift cards and allegedly billed for services not rendered.

As for billing for services not rendered, we vehemently disagree, and the government has not provided any proof of such for the last 2 years. As for the gift cards, many of you may not know that in March 2022 the Office of Inspector General for the Department of Health and Human Services (OIG) published an Advisory Opinion in support of such activity. The OIG had published similar language in the past as well.

OIG stated that patient incentives (e.g. gift cards or cash equivalents) given as part of patients’ treatment plans are favorable and allowable.  Though the OIG reiterated its concern that cash and cash equivalents given to patients can present substantial fraud and abuse risks, the OIG concluded that the arrangement presented a minimal level of risk.

For over two years, this company and its CEO have known that it is under civil and/or criminal investigation. The facility continues to provide medically necessary service throughout the investigation. Then, unexpectedly, on 12/22/2023, right before Christmas, facility receives a notice that the Department of Health Services, Division of Health Benefits has suspended the company’s Medicaid reimbursements. The company relies 100% on Medicaid.

The State does have the authority to suspend reimbursements. 42 CFR 455.23 states:

“(1) The State Medicaid agency must suspend all Medicaid payments to a provider after the agency determines there is a credible allegation of fraud for which an investigation is pending under the Medicaid program against an individual or entity unless the agency has good cause to not suspend payments or to suspend payment only in part.”

The owner contacted me and explained that the company could not last 1 month without receiving Medicaid reimbursements for services rendered. It was catastrophic. His two facilities constitute over 24% of Idaho’s substance abuse facilities in the State. There would be a serious access to care issue, especially in southern Idaho.

I reviewed the Notice of Suspension, and appeal rights appeared there. I say it like I am astonished because I am astonished.

I have never seen appeal rights be given for “credible allegations fraud” under 42 CFR 455.23.

We appealed.

We won!

I argued threefold: (1) there is no credible allegation of fraud because the allegations that services were billed but not rendered is wrong and presenting gift cards is not illegal when dealing with substance abuse; (2) that nothing has changed since the investigation over two years ago, He has been rendering services during his investigation. Why now arbitrarily invoke a penalty on the facility when the government has been investigating for over two years. Why two years later suspend when seemingly nothing has changed. And (3) that the suspension was a violation of his due process.

Specifically, the court held that the State has had two years to investigate any allegations but for two years no action was taken, and no findings provided. Now, the State has decided to arbitrarily and capriciously suspend Medicaid payments to the provider. The suspension of Medicaid payments should be removed because the suspension is improper for a failure of there being any credible allegation of fraud. Additionally, the provider did not receive adequate notice and a chance for a hearing before the suspension action was taken. The suspension of payment is causing irreparable harm that will lead to the provider having to close their business of providing mental health and substance abuse services.

And just like that the suspension was lifted and the provider remains in business. I call that a win! And congratulations to NCSU Wolfpack! We were seeded #10, but ended up #1 of the ACC. We are seeded #11 in the Southern Division of the NCAA. And, yes, I chose NCSU to win the NCAA in my office pool. Go Pack! Can you pick me out from the below picture from 1994?

Or the one above from 1996?

In Medicare Provider Audits, the Best Defense Is a Good Offense

Today I want to discuss upcoming 2024 audits. It has been almost four years since the world shut down due to COVID. Life has been divided into “before COVID” and “after COVID.” Before COVID, the Centers for Medicare and Medicaid Services (CMS) aggressively pursued audits against durable medical equipment suppliers, home health, hospice, behavioral health, long term care facilities and hospitals. When COVID hit, most audits were paused. But not for long. As you know, CMS resumed its audit activities as early as August 2020. However, in the world of COVID, there were exceptions to every rule, many of which were state specific. Even exceptions had exceptions. It is imperative that you maintain for your type of health care service every policy, exceptions, bulletins, advisory opinions from 2020 through the present. If you have not assigned this task to someone in your facility, do it today.

We have seen an uptick in increased audit activity with pneumonic compression devices (PCDs). PCDs were not listed in the top error rates for the 2021 Improper Payment Report, but in the 2023 report, PCD’s have the second highest error rate behind oral cancer drugs at 78.9%. With an error rate that high, PCD’s will be a focal point of audits. Other items identified in the 2023 improper payment report for having high error rates include urological supplies, parenteral and enteral nutrition, manual wheelchairs, and various orthoses. These items will all see increased audit activity in the upcoming year. Basically, as long as the error rates remain high, audit activity will continue.

Surgical dressings have also been consistently audited. Surgical dressings are relatively a complex product to bill. DME suppliers of surgical dressings and physicians who order surgical dressings are seeing an uptick in denials. The 2021 Medicare fee for service supplemental improper payment report covering claims from July 1st, 2019, through June 30th 2020, listed surgical dressings as having the highest improper payment rate at 69.7%, followed closely by therapeutic shoes with an error rate of 67.9%. Since then, there has not been much improvement. The 2023 Improper Payment Report covering claims submitted between July 1st, 2021, and June 30th, 2022, shows the improper payment rate for surgical dressings is still at 62.1%. Therapeutic shoes did show some improvement with an improper payment rate of 51.4%, but this is still significant. For the 2023 reporting period, insufficient documentation accounted for 82.4% of improper payments for surgical dressings. Other types of errors for surgical dressings were no documentation at 1.9%, medical necessity at 1.7%, incorrect coding at 1.9% and other at 12.2%.

Targeted Probe and Educate (TPE) were some of the first audits resumed by CMS. Recovery Audit Contractor (RAC) audits are also increasing. I consider RACs to be the bounty-hunters of Medicare and Medicaid. Audits of skilled nursing providers are going to see a hike this year, with a growing number of federal and state recovery audits adding to specialized compliance reviews announced last year. In 2023, regulators instituted audits of facilities using potentially inappropriate diagnosis of schizophrenia as well as a new, 5-claim audit of every US nursing home that was specifically meant to root out improper payments. CMS came under additional pressure this past summer. That’s when the Government Accountability Office said the agency needs to do a better job of recouping overpayments. What do we think CMS will do in light of the GAO instructing the agency to do a better job recouping? The answer is: audit more. But, as they say in football, the defense is a good offense. The same is true in Medicare and Medicaid provider appeals. Be prepared.

Physician Acquitted Due to Ambiguous and Subjective E/M CPT Codes!

Happy 2024! Today I want to discuss subjectivity and e/m codes. How many times have we heard horror stories surrounding the billings of 99204 versus 99205? We all know that the definitions of e/m codes were revised in 2021. “CPT Code 99204: New patient visits with moderate medical decision making must involve at least 45 minutes. CPT Code 99205: High-level medical decision making for new patients must equal or exceed 60 minutes of total time.” The new definitions allow physicians to rely on time spent. However, does the 45 minutes or 60 minutes equal face-to-face time? The definition does not specify face-to-face time, and I do not believe that the time requirements necessitate only face-to-face time. There is subjectivity in assessing whether a moderate or high-level of decision making has occurred. One person’s determination that a 99205 occurred could be the next person’s 99204. Despite the obvious subjectivity, courts have convicted physicians of health care fraud for billing 99205s instead of 99204 or 99203.

Well, I bring tidings of great joy. The criminal conviction of a Maryland physician for his role in a $15 million Medicare fraud scheme was vacated by a federal judge over the holidays last year…as in 1 month ago.

A federal jury in Maryland convicted Ron Elfenbein, M.D., age 49, of Arnold, Maryland, for five counts of healthcare fraud for submitting over $15 million in false and fraudulent claims to Medicare and other insurers for patients who received COVID-19 tests at sites operated by the defendant in August of 2023.  Dr. Elfenbein was the first doctor convicted at trial by the Justice Department for health care fraud in billing for office visits in connection with patients seeking COVID-19 tests, which makes his acquittal even more important for other providers across the country. Literally, this is a ground-breaking case and all providers should put this powerful case in their defense toolkit because it’s a hammer of a case.

Dr. Elfenbein is on the right.

The conviction of Dr. Elfenbein was based upon his billing of level 4 evaluation and management claims for patients receiving COVID-19 tests, which the Justice Department determined was improper use of the billing codes.

According to the evidence presented at his three-week trial, Dr. Elfenbein owned and operated Drs ERgent Care, LLC, d/b/a First Call Medical Center and Chesapeake ERgent Care. Drs ERgent care operated drive-through COVID-19 testing sites in Anne Arundel and Prince George’s Counties.  Dr. Elfenbein instructed his employees that, in addition to billing for the COVID-19 test, the employees were to bill for e/m visits.  In reality, these visits were not provided to patients as represented, according to the DOJ.  Rather, Elfenbein instructed his employees that the patients were “there for one reason only – to be tested,” that it was “simple and straightforward,” and that the providers were “not there to solve complex medical issues.”  Many of these patients were asymptomatic, were getting tested for COVID-19 for their employment requirements, or who were getting tested for COVID-19 so that they could travel.  Elfenbein submitted or caused the submission of claims totaling more than $15 million to Medicare and other insurers for these high-level office visits.

Elfenbein faced a maximum sentence of 10 years in federal prison for each of the five counts of healthcare fraud for which he was convicted. 

Dr. Elfenbein’s motion for acquittal was granted Dec. 21 by the same federal judge who oversaw his initial trial. The judge found that because E/M CPT codes, the type of medical billing codes used by Dr. Elfenbein, are imprecise and designed to allow “physicians flexibility to exercise their best judgment given the multitude of factors that go into medical decision-making,” his use of the higher-cost level 4 codes did apply to the patient encounters based on the relevant guidelines.

In a detailed, 90-page ruling, James K. Bredar, Chief Judge of the U.S. District Court for Maryland, said the government did not meet the bar to convict Dr. Ron Elfenbein and ruled that “imprecision does not necessarily integrate well with the clear notice and due process guarantees of our criminal law” and “where the relevant CPT codes and related definitions are ambiguous and subject to multiple interpretations, problems clearly arise.” I agree. Ambiguous or subjective rules should not be the basis for criminal penalties. Civil, possibly. But not criminal.

Knicole Emanuel Presents Webinar January 25, 2024!

A Guide to the RAT-STATS Statistical Software in Medicare and Medicaid

Hosted by: Lorman

Click here to register for the webinar on January 25, 2024, from 1:00pm-2:30pm!

Join Nelson Mullins Raleigh partner Knicole Emanuel for a webinar hosted by Lorman on Jan. 25., 2024. Emanuel will be a speaker at the session entitled “A Guide to the RAT-STATS Statistical Software,” where attendees will learn about key considerations in interpreting sample size results for how to interpret and critically assess key factors influencing the extrapolation process, how to apply theoretical knowledge through practical exercises using RAT-STATS, how to develop a critical mindset for evaluating the reliability and replicability of results; and informed decision-making.

This webinar is available to attend live with available credits for ACHE, HFMA, AHIMA, and NASBA. There will also be an OnDemand Course for this presentation available.

Post-COVID Medicare and Medicaid Provider Audits Are Here!

My esteemed colleagues with curious minds, today we embark on a journey into the complex world of Medicare and Medicaid provider audits, specifically orchestrated by the enigmatic entities known as Recovery Audit Contractors, or RACs. The dates of service (DOS) during COVID are specifically being targeted, and I’ve seen an uptick. With the plethora of exceptions, you need a specialized attorney.

Picture this: You’re a healthcare provider, diligently navigating the seas of Medicare and Medicaid reimbursement. All of a sudden, a tempest approaches – the Recovery Audit Contractors or RACs. These are the bounty hunters of the healthcare world, commissioned to recoup improper payments and ensure the ship of government healthcare funding stays afloat. And paid by contingency creating a financial incentive that some may call bias. The RACs even have the authority to extrapolate, making alleged overpayments to skyrocket, increasing its profit.

Now, you might wonder, “How do these RACs operate, and what laws govern their actions?” Well, let me shed some light on that. The Medicare RAC program was born out of the Tax Relief and Health Care Act of 2006, a legislative “masterpiece” that empowered RACs to review Medicare and Medicaid payments and, when necessary, claw back funds. It’s like having financial watchdogs on the prowl, ensuring taxpayer dollars are spent wisely.

A hospital client of mine provided outpatient services and billed Medicare for reimbursement during COVID. A RAC, armed with their legal authority, started scrutinizing these claims. Suddenly, the RAC believes that the hospital has been billing for services that don’t meet the necessary criteria. I love how RAC auditors without medical licenses purport to determine medical necessity for physicians. I hope you hear the sarcasm. The RAC alleged “upcoding” – alleging services were billed at a higher complexity than they actually were. The RACs, acting within the confines of the law, swoop in to recover those overpayments, ensuring the taxpayer’s purse strings are untangled.

We all know RACs are not infallible. Hopefully, you know this if you are a longtime reader. RACs mistakenly identify an overpayment or misinterpret complex healthcare regulations. That’s where the appeal process becomes crucial. The Medicare appeals process, defined under the Social Security Act, provides a right for providers to challenge RAC decisions. It’s a legal battleground where the provider can present evidence, argue their case, and seek justice against the RAC’s findings.

Now, let’s consider the Medicaid realm. The Medicaid RAC program, established by the Affordable Care Act in 2010, mirrors its Medicare counterpart. These RACs operate at the state level, conducting audits to identify and recover improper Medicaid payments. It’s like a dual-front war on wasteful spending, both federally and within individual states. Again, DOS during COVID are at issue.

For a concrete example, let’s imagine a nursing home submitting claims to Medicaid for resident services. The state-level Medicaid RAC, acting under the Affordable Care Act’s provisions, reviews these claims. If they discover discrepancies – perhaps services billed without proper documentation or purportedly unsupported by medical necessity – the RAC, wielding its legal mandate, initiates the recovery process.

The RACs, armed with the legislative might of the Tax Relief and Health Care Act and the Affordable Care Act, play a crucial role in safeguarding the integrity of Medicare and Medicaid reimbursements. While their actions may feel like storms to providers, it’s essential to recognize the checks and balances in place, including the appeals process, to ensure fairness and accuracy in the audit battlefield. As we navigate the seas of healthcare reimbursement, may our compass be true, our documentation impeccable, and our understanding of the law unwavering.

There Is No Law to Be Perfect in Medicare; Just Self-Disclose!

We all know that there is no law, regulation or statute that medical records supporting payment by Medicare or Medicaid must be perfect. There is no mandatory 100% compliant standard. Because humans err. In light of the ongoing financial strain brought about by the pandemic and the constraints imposed by Congress on Medicaid coverage disenrollments, State Medicaid agencies are poised to explore additional audits to manage increasing Medicaid expenditures. Recent developments, such as additional flexibilities granted by CMS, suggest a shifting landscape in how States respond to these challenges.

Anticipating a more assertive approach by States in dealing with service providers, potential measures could include rate cuts and enhanced scrutiny through service audits. This prompts a crucial examination of States’ and providers’ rights under federal Medicaid law to audit service provisions and recover overpayments, a legally intricate and noteworthy domain.

Medicaid RAC Audits are governed by 42 CFR 455 Subpart F—Medicaid Recovery Audit Contractors Program. Other Medicaid alleged overpayments are dictated by 42 CFR Chapter 433.

To establish a foundational understanding, it’s essential to consider the mandate imposed by Congress in section 1902(a)(30)(A) of the Social Security Act. States are required to incorporate provisions in their Medicaid plans to “safeguard against unnecessary utilization of … care and services.” This underscores the federal interest in ensuring responsible use of matching funds, given the federal government’s financial contribution to the program.

A landmark case illustrating the complexities of this mandate is the 1999 decision by the Supreme Judicial Court of Massachusetts in Massachusetts Eye and Ear Infirmary v. Commissioner of Medical Assistance. The court evaluated Massachusetts Medicaid’s retrospective utilization review policy, emphasizing the need for meaningful definitions of terms like “inpatient” and “outpatient” to avoid arbitrary penalties on providers.

Moving to the realm of overpayments, CMS regulations, specifically at 42 C.F.R. § 433.316, provide guidance on how States should proceed when identifying overpayments. The regulations recommend written notification to providers, with states having the discretion to choose whether to notify in cases of suspected fraud. Furthermore, States are required to take “reasonable actions” based on state collections law to recoup overpayments, with a one-year timeframe to return the federal share of identified overpayments to CMS.

Determining when a State “discovers” an overpayment is a critical aspect outlined in the regulations. The discovery is pegged to specific events, such as the state contacting the provider, the provider notifying the state, formal initiation of recoupment, or a federal official identifying the overpayment. Significantly, the regulations focus more on CMS’s relationship with the state than on the state’s relationship with providers.

Recent legal precedents, such as the Wisconsin Supreme Court’s decision in Professional Home Care Providers v. Wisconsin Department of Health Services, underscore the need for states to operate within the bounds of their granted authority. In this case, the court rejected a Medicaid agency’s “perfection” policy, emphasizing that state law must align with CMS regulations in overseeing overpayment recovery.

As States grapple with revenue shortfalls exacerbated by the pandemic, the potential for increased efforts to recoup overpayments from providers looms large. Legal challenges, exemplified by recent decisions in Massachusetts and Wisconsin, underscore the delicate balance States must strike in these endeavors, emphasizing the limits within which they must operate as they navigate the complex terrain of Medicaid law and financial constraints.

Expect audits. Be ready to defend yourself. Self audits are so important. If you self audit and find a problem and self-disclose, you will not receive penalties. Self-disclosures are key. When I told a group of law students this key information, one asked, has you told a client to self-disclose and they refused? To which I said yes. One time. A female doctor informed me that she falsified 7 medical records, I said that she should disclose. She screamed at me in her language, fired me, and hired a new attorney and withheld the information about falsifying records.

She is jail currently.

2024 SNF Audits Are Robust! What You Need to Know:

Skilled Nursing Facilities (“SNF”) have special audits or should I say, more robust audits. The overall gist of these federal audits of SNFs for Medicare compliance, staffing seems to be the most troubling.

We all know that in March of 2020, both The Joint Commission (TJC) and the Centers for Medicare & Medicaid Services (CMS) pressed pause on audits, accreditation surveys, and health inspections due to COVID-19. Shortly thereafter, CMS inspections and rating updates were back in full swing as of January 2021, TJC audits and surveys are proceeding more robustly. COVID funds are especially scrutinized. Passing audits and inspections are crucial to maintaining your nursing home’s accreditation and Medicare-certified status so you can stay in business. Here’s what your HR department should know about SNF audits and ratings, and how you can help prepare for them.

Skilled Nursing Facility Audits and Quality Rating System

Together, the CMS and The Joint Commission (“TJC”) assess skilled nursing facilities’ patient care, quality of service, and provider qualifications.

The TJC survey and auditing process is designed to evaluate accredited nursing care centers once every 3 years through unannounced visits and documentation reviews that include:

1. Assessments of patient safety
2. Observations of services and provider or caregiver performance
3. On-site or virtual staff interviews
4. Physical survey of the facility
5. Review of the facility’s ability to maintain updated practitioner documentation

CMS tests nursing home quality levels using a five-star quality rating system, which is updated regularly on its facility comparison site, Nursing Home Compare. The site organizes nursing homes by rating and helps consumers and their families and caregivers choose the right facility. This rating system gives each nursing home a score of between 1 and 5 based on four major factors:

1. Health inspections. This portion of the rating is a combination of the results from a facility’s three most recent health inspections and three most recent investigations due to complaints. Trained inspectors pay an on-site visit to test the nursing home’s ability to meet minimum quality requirements through a specific process.
2. Staffing. This rating takes into account the average hours of RN care per resident day as well as total staffing hours (RN, LPN, and CNA) based on resident needs.
3. Quality measures. This rating is based on 15 different physical and clinical measures to test how well nursing homes are meeting resident needs.
4. Retention. This rating measures the amount of turnover at a facility and rewards employers who retain employees for longer periods of time.

Emphasize time and attendance

In 2019, the CMS tightened their quality rating restrictions, reducing the number of days facilities could go without having an on-site nurse. This and other changes resulted in over one-third (37%) of skilled nursing facilities losing one or more stars. It’s impossible to predict what other changes may come in the future, but needless to say, time and attendance will continue to be crucial.

Your facility may not be able to recruit enough new nurses to fill your roster completely, which is why prioritizing timeliness is an important part of maintaining your rating. Make it a point to reward staff who clock in and out on time and stay on top of missed days and late arrivals.

Focus on Retention

In July 2022, CMS announced that staffing and turnover data would be used in assessing star ratings for facilities. As CMS administrator Chiquita Brooks-LaSure stated, “research and experience tell us that staffing levels and staff turnover can substantially affect quality of care and health outcomes for people living in nursing homes.” My BFF DeeDee Murphy is GC for Principal Long-Term Care, which owns hundreds of SNFs. Staff turnover is a huge problem, especially since COVID, according to her.

Retention has long been a practical concern for long-term care facilities, but now the issue is increasingly under the spotlight. Focus on your retention by offering creative and enticing benefits, such as flexible scheduling and flexible benefits. Also, focus on creating career opportunities for your employees, so they stay within the facility instead of seeking career growth elsewhere.

Types of Nursing Home Audits

As an administrator, you’ll likely oversee many different types of audits. Here are some of the most common ones.

1. Resident Assessment Instrument (RAI)

The Resident Assessment Instrument is a comprehensive assessment tool used to evaluate the needs of nursing home residents. RAI audits focus on the accuracy and completeness of resident assessments, including the collection and documentation of information related to the resident’s physical, mental, and psychosocial health. These audits aim to ensure that residents’ care plans are individualized and based on accurate and up-to-date assessments.

2. Falls Risk Assessment

Falls are a significant concern in nursing homes, as they can lead to serious injuries and complications. Falls risk assessment audits evaluate the nursing home’s procedures for identifying residents at risk of falling and implementing appropriate interventions to prevent falls. These audits assess whether fall risk assessments are conducted regularly, documented properly, and used to develop personalized care plans to minimize the risk of falls.

3. Medication Management Audit

Medication management audits focus on the safe and effective administration of medications to nursing home residents. These audits assess whether medication orders are properly documented, medications are stored securely, and administration procedures follow established protocols. They also evaluate medication reconciliation processes, medication error reporting, and staff training related to medication management.

4. Infection Control Audit

Infection control audits are conducted to assess the nursing home’s adherence to infection prevention and control practices. These audits evaluate hand hygiene practices, proper use of personal protective equipment (PPE), cleaning and disinfection procedures, and compliance with isolation precautions. The goal is to identify areas where infection control pracctices can be improved to minimize the risk of healthcare-associated infections among residents and staff.

5. Staffing Audit

Staffing audits focus on evaluating the nursing home’s staffing levels and skill mix to ensure adequate staffing for resident care needs. These audits assess compliance with staffing requirements set by regulatory agencies, review staff qualifications and training, and evaluate the nursing home’s processes for monitoring and maintaining appropriate staffing levels. The goal is to ensure that there are enough qualified staff members available to provide safe and quality care to residents.

As you help prepare your facility for potential audits and inspections, it’s also a good idea to take a closer look at your system for storing and submitting documentation. Your personnel records may be up-to-date, but are they as accessible as they could be?

Many HR departments still handle paperwork manually, with paper folders and filing cabinets rather than a centralized system. And while this may still work for some, it can get tricky if you’re juggling multiple review requests or multiple facilities.

Digitizing files in a central location can help you avoid unnecessary compliance violations and simplify employee management. With access to all files at once, your facility can stay organized, prepare ahead of time, and have all the documentation you need at your fingertips, just in case. 

Tips for Audit and Inspection Preparation

You want your facility to look good. My best friend is general counsel you can help your facility prepare for whatever comes their way and increase their rating at the same time.

Here are a few ways your team can improve compliance and maintain your SNF’s quality rating:

1. Educate staff about documentation

All nursing home facility staff should be on the same page when it comes to documenting and reporting care. Consider holding a staff meeting to go over the main points of documentation with your attending physician or RN in charge. During this meeting, emphasize the importance of documenting elements like:

1. History of reticent care and behavior towards care
2. The skilled services provided
3. Need for services based on resident’s condition and situation
4. Resident’s response to services
5. Future care plans

All documentation should be legible (although legibility is NOT a law, just a suggestion or best practices) and report care clearly and accurately. And make sure everyone knows to check state regulations for reporting and documenting COVID-19 procedures and care.

Improve Employee Satisfaction

Satisfied employees mean a better work environment and fewer complaints from residents, which can negatively impact your quality rating. Positive work cultures have been linked to better work attendance and performance, workforce retention, and mental health. It pays to ensure that your RNs, LPNs, CNAs, and other staff members are happy, healthy, and able to attend fully to their work.

Work with your staff to ensure that they’re getting what they need, whether that means flexible scheduling or healthy food on late-night shifts. Check in about their mental health and ask what resources you can provide to help them combat burnout.

RAC Audits Are BOO-Very Scary, and, Sometimes, Are DEAD wrong!

For Monitor Monday, today, October 30, 2023, I dressed up as a RAC auditor. BOO!!! I get a spooky 13.5% commission for overzealous auditing tactics. RAC auditors come in every shape and size, color or gender.

In my experience, RACs are garishly incorrect in their assessments. I will reveal three, real life examples where these audit contractors accused healthcare providers of owing money but were found to be dead wrong:

Example 1 – Medical Necessity quibbles:

In a haunting case involving a hospital, the RAC alleged that certain cardiac procedures were billed inappropriately, citing concerns about the medical necessity of these services. They claimed the hospital should refund a repugnant amount for these procedures. However, upon closer examination and an appeal process, it was revealed that the services were indeed medically necessary and aligned with the standard protocols. The ghastly RAC’s accusation was disproven, and the hospital was not required to return any funds. Spine-tingling!

Example 2 – Improper Coding of Diagnosis:

A healthcare provider, particularly a large physician group, was accused by the RAC of using suspicious, improper diagnostic codes, leading to overbilling for certain services provided to Medicare and Medicaid beneficiaries. After a thorough internal audit, it was determined that the codes used were accurate and supported by the patient’s medical records. The RAC’s allegations were unfounded, and no repayment was required. Suspicious. A haunting reminder to spook audits.

Example 3 – Alleged Duplicate Billing:

In a murderous case involving a nursing facility, the RAC identified what they believed were instances of duplicate billing for certain procedures and services. Upon further review, it was revealed that the billing discrepancies were due to the RAC’s misunderstanding of the facility’s billing processes. Mysterious. The facility provided evidence showcasing that the billed services were distinct and not duplicates. Consequently, the RAC’s claim was refuted, and no repayment was deemed necessary. Suspicious.

These examples underscore the critical need for providers to have robust internal compliance measures in place. While RACs serve a vital purpose in identifying billing errors, they are not infallible. Providers need to be equipped to challenge these audit findings, ensuring they are based on accurate and comprehensive information.

It’s crucial for healthcare providers to engage in a proactive approach by conducting their internal audits, maintaining accurate documentation, and being prepared to challenge RAC determinations when necessary. These efforts not only protect providers from unwarranted financial obligations but also ensure that Medicare and Medicaid funds are appropriately allocated.

In conclusion, the relationship between RACs, healthcare providers, and government healthcare programs is complex. The examples provided demonstrate that while RACs play a critical role in safeguarding the integrity of Medicare and Medicaid, their findings are not always accurate. Providers must be diligent in ensuring their billing practices align with regulations and be prepared to contest any erroneous audit findings to maintain fiscal stability and fair reimbursement for services rendered.

Happy Halloween!!!!

Amidst Medicaid Expansion, Provider Shortages Skyrocket!

From February 2020 through March 2023, enrollment in Medicaid increased by 35.3 percent, or over 22 million individuals. Enrollment in Medicaid increased in every State during COVID. Concurrently, many States report a shortage of providers willing to accept Medicaid. Today NC will be announcing its Medicaid expansion, so the nationwide numbers will rise in the near future. However, as we are introducing over 22 million Americans to Medicaid, the number of physicians, oral surgeons, BH providers, or any health care provider type who accept Medicaid is not increasing. In many places, providers who accept Medicaid is shrinking. See blog.

For example, Arkansas expanded Medicaid in 2014, leading to a surge in Medicaid enrollees. While the expansion successfully reduced the state’s uninsured rate, it also highlighted the shortage of healthcare providers, especially in rural areas. Many residents in these underserved regions face long wait times to see a doctor, limiting their access to timely care.

Nationwide, access to mental health services has been a concern. Medicaid expansion aimed to provide mental health coverage to more people, but there has been a shortage of mental health professionals to meet the growing demand. In many states, there are waitlists regardless the crisis.

Providers continue to face insurmountable challenges. Such challenge is the burden of audits conducted by Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), and Targeted Probe and Educate (TPE) programs. These audits are designed to ensure that healthcare providers comply with the complex web of regulations governing reimbursement and patient care. However, the reality is that these audits often impose an overwhelming burden on providers and their attorneys, making compliance a Herculean task.

The healthcare industry in the United States is governed by a myriad of rules, regulations, and guidelines. From Medicare and Medicaid requirements to state-specific laws, providers must navigate a complex regulatory maze to ensure compliance. RACs, MACs, and TPE programs scrutinize providers’ billing practices, medical necessity of services, and documentation to identify overpayments and potential fraud or abuse.

Healthcare providers, from hospitals to individual practitioners, must allocate significant resources to respond to audits and maintain compliance. The burden starts with the anticipation of an audit, as providers are often left in the dark about when and how they will be audited. This uncertainty can be paralyzing, as it requires providers to divert time, personnel, and financial resources away from patient care to prepare for an audit that may or may not occur.

Once an audit is initiated, providers are faced with a deluge of demands. They must gather and submit an extensive amount of documentation, which can include patient records, billing records, and other relevant materials. The process is not only time-consuming but also disruptive to day-to-day operations. Smaller practices, in particular, may struggle to allocate the necessary personnel and resources to meet these demands, potentially affecting patient care quality.

One of the most significant challenges faced by healthcare providers and their attorneys is the ever-changing nature of healthcare regulations. Keeping up with the latest rules and guidelines is a daunting task, and providers must constantly adapt their practices to remain compliant. The complex interplay between federal and state regulations further complicates matters, as what is compliant at one level may not be at another.

Healthcare attorneys play a critical role in assisting providers through the audit process. However, we too are challenged by the intricate nature of healthcare regulations and the constant need to stay abreast of updates and changes. David would concur, I believe, in my statement that, being a health care regulatory attorney is not a laid-back, calm career choice. We have to continue to educate ourselves at quite a fast pace. Think about how often laws and rules change federally and in 50 States. Tomorrow I am going to Baltimore Maryland for the Fraud and Abuse Conference by the American Health Law Association. I will let you know if I learn anything mind-blowing.

The burden of RAC, MAC, and TPE audits in healthcare is undeniable. While these audits are essential to protect the integrity of the healthcare system, the complex regulatory landscape, coupled with the uncertainty and resource-intensive nature of the audit process, places an overwhelming burden on providers and their attorneys. Healthcare providers are in a constant struggle to balance compliance with the delivery of quality patient care, and their legal representatives are similarly tasked with navigating an ever-changing regulatory maze.

Addressing this burden requires a collaborative effort among stakeholders, including government agencies, healthcare providers, and legal experts. Streamlining audit processes, providing clearer guidance, and ensuring that audits are conducted fairly and transparently can go a long way in alleviating the burden on providers. In the end, the goal should be to strike a balance between safeguarding taxpayer dollars and allowing healthcare providers to focus on what they do best – caring for patients. Or maybe we just need a computer program for audits that is NOT Excel.