On June 14th, AMEPA passed along a letter from Sylvia Toscano asking providers to participate in a White Paper project on industry audits requested by the Senate Finance Committee. Attorney Edward Vishnevetsky, with the law firm of Munsch Hardt Kopf and Harr, crafted the White Paper on behalf of the VGM Group and several providers listed in the document. The document is 31 pages and offers 15 detailed problems with the ZPIC, RAC, MAC and CERT audit process and recommendation for solving them, which is summarized below.

Every supplier concerned with audits or are curious about audits should read the document. It is filled with real accounts, examples and solutions of this unreasonable and unfair system. (see link below)

AMEPA thanks VGM and the HME providers involved for funding this project and Ed Vishevetsky from Munsh Hardt Kopf and Harrfor creating such a thorough report and for their continued support of AMEPA and our industry.

Summarized list of audit issues

1. THE PRESENT INITIAL DETERMINATION PROCESS IMPOSES UNILATERAL DEADLINES AGAINST DMEPOS SUPPLIERS; ZPICS/MACS SHOULD BE HELD TO THE SAME TIME CONSTRAINTS.

RECOMMENDATION: Promulgate and enforce a deadline that requires ZPICs/MACs to issue an Initial Determination within 30 days of receipt of an ADR response, with companion requirements that provide for automatic claim approval if that deadline is not followed.

2. THE PRESENT REDETERMINATION AND RECONSIDERATION DEADLINES ARE OFTEN NOT FOLLOWED BY MACS/QICS; THE MACS/QICS SHOULD BE HELD TO THE SAME TIME CONSTRAINTS AS DMEPOS SUPPLIERS.

RECOMMENDATION: Enforce regulatory deadlines against MACs/QICs, such that if a MAC/QIC does not respond timely to an appeal request, the claim is automatically approved.

3. THE PRESENT SYSTEM SOLELY PUNISHES DMEPOS SUPPLIERS FOR PROBLEMS WITH MEDICAL DOCUMENTATION BY PROFESSIONALS OVER WHOM THEY HAVE NO CONTROL.

RECOMMENDATION: Do not subject DMEPOS suppliers to overpayments based on documentation issues which are beyond their control. Use lesser sanctions and provide an opportunity for DMEPOS suppliers to correct documentation problems.

4. THE PRESENT DMEPOS COMPETITIVE BIDDING PROGRAM AND ZPIC AUDIT PROCESSES ARE MISALIGNED, THEREBY CREATING UNNECESSARY CONFLICT; THESE PROCESSES SHOULD BE INTEGRATED.

RECOMMENDATION: Promulgate policies and procedures that integrate the DMEPOS CBP and audit processes.

5. THE PRESENT AUDIT PROCESS FAILS TO PROVIDE OBJECTIVE BENCHMARKS FOR REMOVAL FROM PREPAYMENT AUDIT; ZPICS SHOULD NOT BE ALLOWED TO PROLONG THE AUDIT PROCESS ARBITRARILY.

RECOMMENDATION: From the outset of each prepayment audit, require ZPICs to prepare and notify DMEPOS suppliers of specific and objective actions and benchmarks necessary to be removed from prepayment audit.

6. THE PRESENT PROCESS ALLOWS ZPICS, MACS AND QICS TO DENY CLAIMS WITHOUT HOLDING THEM ACCOUNTABLE FOR THOSE DETERMINATIONS; ZPICS, MACS AND QICS SHOULD NOT BE ALLOWED TO "PASS THE BUCK" AND ARBITRARILY AND CAPRICIOUSLY DENY CLAIMS.

RECOMMENDATION: Promulgate and enforce rules and procedures that require all alleged claim deficiencies to be identified during Initial Determination, and prohibit ZPICs, MACs, and QICs from denying claims for reasons that were not identified at Initial Determination.

7. THE PRESENT SYSTEM PUNISHES DMEPOS SUPPLIERS THAT ACT PROPERLY; INTEREST SHOULD BE PAID ON CLAIMS THAT HAVE BEEN IMPROPERLY DENIED.

RECOMMENDATION: Promulgate and enforce regulations that require contractors to pay interest on claims that are improperly denied and then properly paid.

8. THE PRESENT NATIONAL COVERAGE DETERMINATION (NCD), LOCAL COVERAGE DETERMINATION (LCD) REQUIREMENTS AND COVERAGE PROVISIONS IN INTERPRETIVE MANUALS ARE VAGUE, AMBIGUOUS, AND SUBJECTIVE AS TO DOCUMENTATION NECESSARY TO ESTABLISH MEDICAL NECESSITY; PROVIDERS SHOULD BE GIVEN CONCISE AND OBJECTIVE REQUIREMENTS TO ESTABLISH MEDICAL NECESSITY.

RECOMMENDATION: Promulgate specific and objective requirements in template or checklist format for each item of DME, and promulgate objective, concrete examples of what constitutes "medical necessity."

9. THE PRESENT SYSTEM ALLOWS AUDITORS TO TAKE AWAY A DMEPOS SUPPLIER'S CONTRACTUAL RIGHT TO MEDICARE PAYMENT BASED ON COMPLAINTS; PROVIDERS SHOULD BE AFFORDED DUE PROCESS BEFORE ANY AFFIRMATIVE STEP CAN BE TAKEN AGAINST THEM.

RECOMMENDATION: Promulgate and enforce procedures that promote due process by requiring contractors to: (1) provide notice of an investigation to the DMEPOS supplier; (2) provide all exculpatory evidence regarding the investigation to the DMEPOS supplier; and (3) allow the DMEPOS supplier to respond to complaints in a meaningful way at a meaningful time, prior to any affirmative action being taken against the DMEPOS supplier that limits their contractual right to Medicare payment.

10. ZPICS RARELY EMPLOY NON-PUNITIVE SANCTIONS; EDUCATION SHOULD BE INCORPORATED AS A METHOD OF PREVENTING FRAUD AND ABUSE.

RECOMMENDATION: Promulgate and enforce objective criteria defining when a ZPIC is allowed to impose punitive sanctions on a DMEPOS supplier; otherwise, non-punitive sanctions should be employed first.

11. THE PRESENT SYSTEM ALLOWS CONTRACTORS TO REOPEN PREVIOUSLY PAID CLAIMS WITHOUT JUSTIFICATION OR PROOF; DMEPOS SUPPLIERS SHOULD BE ALLOWED TO REVIEW ANY PURPORTED EVIDENCE UTILIZED TO REOPEN CLAIMS.

RECOMMENDATION: Promulgate and enforce procedures that require contractors to provide evidence to the DMEPOS supplier prior to reopening a claim; if the reopened claim is approved, appeal costs should be paid by the contractor.

12. THE PRESENT SYSTEM ALLOWS CONTRACTORS TO UNILATERALLY DISMISS ADVANCED DETERMINATION OF MEDICARE COVERAGE DETERMINATIONS; PROVIDERS SHOULD BE AFFORDED THE BENEFIT OF RELYING ON THESE DETERMINATIONS.

RECOMMENDATION: Promulgate and enforce procedures that prohibit contractors from auditing AMDC-approved claims on the basis of medical necessity. Promulgate and enforce procedures that require a contractor to provide evidence of incorrect information when auditing an ADMC-approved claim.

13. THE PRESENT SYSTEM FAILS TO STANDARDIZE "CONTINUED MEDICAL NEED" AND "ONGOING USE" FOR RENTAL ITEMS; PROVIDERS SHOULD NOT BE PUNISHED FOR UNDEFINED STANDARDS.

RECOMMENDATION:

Promulgate and enforce procedures that prevent contractors from auditing claims for monthly rental DMEPOS items that have already been initially approved.

14. THE PRESENT POSTPAYMENT AUDIT SYSTEM ENCOURAGES AND FOSTERS EXTRAPOLATION FINDINGS THAT ARE ARBITRARY AND UNFATHOMABLE; CONTRACTORS SHOULD NOT EMPLOY METHODS THAT ARE WITHOUT BASIS IN FACT OR STATISTICAL METHODOLOGY.

RECOMMENDATION:

Promulgate and enforce procedures that require contractors to properly justify and support statistical sampling and extrapolation calculations.

15. THE PRESENT SYSTEM REQUIRES ACCREDITATION AND AUDITS OF DMEPOS SUPPLIERS WHICH RESULTS IN DUPLICATIVE, INCONSISTENT, AND INEFFICIENT EXPENDITURES OF RESOURCES.

RECOMMENDATION:

Promulgate and enforce procedures that distinguish between the roles of audits and accrediting organizations.

Click here to view the White Paper on Audits