JHLI Lecture Series: The Dynamic 2015 Regulatory Compliance Landscape

On March 17, 2015, DePaul’s Health Law Institute welcomed Shelly Carling of Advocate Health Care and Corey Perman of Accretive Health, Inc., as they gave a lecture entitled “The Dynamic 2015 Regulatory Compliance Landscape.” The lecture helped attendees gain a better understanding of the health care regulatory world as it exists today.

Perman, Vice President and Chief Compliance Officer for Accretive Health, began the lecture by noting the ongoing advancements to the regulatory health care compliance world.  Until about seven years ago, there was no “stand-alone” compliance program at Advocate Health Care, and until about four years ago, there was only one compliance program at Accretive Health.  However, in recent years there has been an increased amount of scrutiny from the external world.  The scrutiny has resulted in increased pressure  on physicians and health care documentation, as well as State, Federal and Commercial Reviews that have expanded and increased compliance programs.

Carling, Site Compliance Officer of the Central Region and Government Response Appeals Consultant at Advocate Health Care followed, focusing on the Centers for Medicare and Medicaid Services’ (“CMS”) revocation of billing privileges.  Carling explained that until recently, CMS could only revoke privileges when a provider (hospital, physician, medical supplier, etc.) submitted a claim for an impossible service.  For example, an impossible service would be if a beneficiary was deceased before the listed date on the bill or if a bill was submitted for a procedure at a facility that did not own the proper equipment to conduct that procedure.  CMS was granted authority to expand their privileges under the Affordable Care Act.  Now, CMS may revoke a providers billing privileges based upon a “pattern or practice” of submitting claims that do not meet Medicare requirements.  Difficulty arises, however, since CMS refuses to define “pattern or practice” nor will CMS establish numerical thresholds to better assist hospitals and physicians.  Additional factors that CMS can analyze in regards to revocation of billing practices include, percentage of claims denied, reasons for claim denials, history of final adverse action, length of time the pattern has continued, length of time the provider has been enrolled in Medicare, and Carling’s favorite, any other information CMS deems relevant.

Perman and Carling next explained the concept of a National Provider Identifier (“NPI”).  This identifier groups all physicians within a single hospital, together.  Upon reviewing all claims within the organization NPI, CMS will make the determination of whether  physicians’ billing privileges should be revoked.  The two felt that having such a program in place will help compliance and legal departments of hospitals “sell” to their physicians the importance of consistency when submitting a claim; because poor  billing practices can now have an effect on others and the physicians themselves.  However, this is a brand new process, and no one is sure how aggressively CMS will use their powers.  Although Carling did feel confident that CMS will likely not revoke privileges for isolated and sporadic claim denials and innocent billing errors, rather CMS will revoke privileges for more lengthy and ongoing issues.

The focus of the presentation then shifted to dealing with the 60 day rule, requiring providers and suppliers receiving funds under the Medicare program to report and return overpayments within 60 days of identifying an overpayment.  Failure to return overpayments could be construed as a violation of the False Claims Act.  However, difficulty arises with this rule because this is a self-monitored program with no uniform definition for  “identified.”  Without more guidance from the government, this difficulty will continue.  Carling explained that at Advocate, the billing department has a standard process they follow in order to determine the possibility of overpayment, and then a separate process which finalizes that there is an overpayment, at this time, the 60 day clock begins.

Next, the presenters discussed Recovery Audit Contractors (RACs).  RACs began as a demonstration project from 2005-2008 implemented under the Medicare Modernization Act of 2003; RACs were established to identify improper payments and to recover overpayments in Medicare.  Because the demonstration program was successful, the Tax Relief and Health Care Act of 2006 required RACs to become a national program by January 1, 2010, and the Affordable Care Act expanded RACs to the Medicaid Program.

Medicare RACs are regionally operated and federally funded. Medicaid RACs are State operated and State funded.  The major difference between Medicaid and Medicare RACs is the appeal process.  For Medicare, there are four levels of appeals before you reach the court system.  For Medicaid, there is only one level of an administrative hearing before the district court.  However, because of the multiple appeals within the Medicare system, a fair amount of backlog has occurred. 

The last topic discussed during this lecture was the Probe and Educate program.  Under this program, the Medicare Administrative Contractors (MACs), who are hired by CMS, started doing pre-payment reviews of Part A Medicare claims.  This program was originally designed to take place in 3 phases.  Based on the first round of the program, many providers met the criteria to undergo a second round of review.  MACs across the country have reported that there has been no improvement by providers in the second round either. CMS has now made the 3rd round optional, and this round prohibits the MACs from pulling any records dated after March 31, 2015, and reduced the number of records requested from 100-250 per site down to 10-25. Although this is the Probe and Educate program, Perman emphasized that there has been little education to hospitals, often causing providers to fail the reviews.

Perman and Carling concluded the presentation with what lies ahead for the regulatory landscape.  RACs will not perform any additional inpatient hospital status audits for the rest of 2015.  The MACs are waiting for guidance from CMS after the Probe and Educate programs end. And finally, NGS, which is the MAC in Illinois and several other states, announced that they are going to audit the recent significant trend of 3-5 day stays for Medicare beneficiaries. 

If you missed the lecture, you can view the recording HERE

Brittany Hines is a current student at DePaul University College of Law in Chicago. Ms. Hines completed her undergraduate degree at DePaul University  in psychology in 2014. She will complete her JD degree in 2017.