Government expansion of an auditing program for Medicare and Medicaid that rewards contractors for finding overpayments to physician practices is likely to cause more disputes like the one VRF Eye Specialty Group recently settled.
The practice got handed a $4 million bill after an audit by the contractor AdvanceMed. The practice challenged the audit and proved to an administrative law judge that AdvanceMed made a mistake interpreting medical coding.
The $4 million bill was reduced to $2,810.
It took a two-year legal battle that cost the practice about $350,000.
AdvanceMed did not receive any financial incentives for overpayments because it was working as a zone program integrity contractor. But more audit contractors will qualify for financial incentives with the expansion of another program, the recovery audit contractors program.
“This is medicine of the 21st century and it’s not going to get any better,” said Thomas G. Brown, the practice administrator for Eye Specialty Group.
President Barack Obama announced in March the expansion of payment recapture audits to crack down on fraud in Medicaid and Medicare. The program offers contractors “financial incentives to root out improper payments,” according to a White House press release.
But the American Medical Association characterizes recovery audit contractors as “a bounty hunter-like program” because of the incentives to identify overpayments.
The problems for Eye Specialty Group began in November 2006 when AdvanceMed auditors showed up at the practice to review records. In February 2008, AdvanceMed notified the practice that its audit determined the practice had been overpaid $3,966,500 by Medicare.
The dispute was settled last month.
Eye Specialty Group is not alone in having to fight a big demand letter as the result of an AdvanceMed audit. Premier Medical Group of Clarksville, Tenn., challenged a $1.6 million bill that resulted from an AdvanceMed audit and received a favorable ruling from an administrative law judge in May 2008.
In both instances, AdvanceMed reviewed about 120 charts over a certain length of time, then extrapolated the findings from those audits by the total volume of business with Medicaid and Medicare patients.
With Eye Specialty Group, the time frame was from Jan. 1, 2004, to May 31, 2006.
Eye Specialty Group was able to reduce its $4 million bill to $1.5 million through explanations during the first level of the review process. The practice started making payments on the $1.5 million and then appealed the findings of the AdvanceMed auditors to the administrative review judge.
“Our consultant and our attorneys had to explain to the administrative law judge that they are applying the wrong standards to these eye codes,” Brown said.
The billing dispute and any mistakes might have been avoided had there been better communication. In the 18-month period between the initial audit and the receipt of the demand letter, Eye Specialty Group did not hear from Advance Med, except for one phone call requesting one other piece of information, Brown said.
Curtis Watkins, program director for AdvanceMed Corp., declined to comment on the billing dispute and referred The Daily News to a spokesperson for the Centers for Medicare & Medicaid Services.
“The program safeguard contractor made the initial determination based on the information it had received from the provider,” said Peter Ashkenaz of CMS media affairs. “From what I understand, VRF provided additional documentation during the appeals process that informed the determinations of the various arbitrators and the administrative law judge, resulting in the final determination.”
Ashkenaz said it is the responsibility of the provider being audited to supply all the documents needed to support their claims.
“We and the program safeguard contractors make their determinations based on the documentation they receive from the providers,” Ashkenaz said.
Besides program safeguard contractors, the federal government has added recovery audit contractors and Medicaid integrity contractors into the mix.
“Medicine better wake up,” Brown said. “It’s not just our office. It’s going to be every single office because this is the new funding mechanism for health care, to go and get back the money paid to doctors, apparently by hook or by crook.”
Eye Specialty Group was involved in this dispute when it learned that one of its partners, Dr. Seth Yoser, had been stealing expensive medicine from the practice, double-billing Medicare for the medicine and then selling it back to ophthalmology practices. The practice reported Yoser to federal authorities.
Yoser was sentenced in February to 42 months in prison for mail fraud, wire fraud and selling drugs without a license.
The findings in the AdvanceMed audit were not related to the criminal acts committed by Yoser.
“The practice has always been confident in its billing and operating processes and has coveted its ethical reputation so much so that when a partner was found within the practice to be committing fraud, there was no real hesitation to step forward and say we are not going to allow that,” Brown said.
In announcing the expansion of payment recapture audits, the White House said the program could return at least $2 billion in taxpayer money over the next three years. ...