Healthcare Compliance: Understanding ZPIC Audits

By: Susan St. John

So, you’ve received a letter from the Zone Program Integrity Contractor or “ZPIC” to review for the accuracy and justification of services reimbursed by the Medicare program. In other words, a dreaded ZPIC Audit or ZPIC Investigation. Now What?!

First, remain calm. Chances are an audit by ZPIC will go well if you have been diligent in completing patients’ medical records, justifying medical necessity, and your billing is accurate and well supported by the patients’ medical records. Even if errors are discovered, most errors do not represent fraud, that is, the errors were not committed knowingly, willfully and intentionally. Still, a ZPIC audit can be daunting and if Medicare has noticed a pattern of billing that it considers suspect, or there has been a complaint against you, the ZPIC audit will be rigorous, and often adversarial. The ZPIC’s job is to protect the program from potential fraud. It will conduct data analysis, including statistical outliers within a well-defined group, or other analysis to detect patterns within claims or groups of claims that might suggest improper billing. Data analysis can be undertaken as part of a general review of claims pre or post submission, or in response to information about specific problems arising from complaints, provider or beneficiary input, fraud alerts, CMS reports, Medicare Area Contractors, or independent governmental or nongovernmental agencies.Continue reading

Trend Watch: Usual and Customary Rate on the Decline

By: Karina Gonzalez

Most of the commercial payors are paying PHP (Partial Hospitalization Plan) and IOP (Intensive Treatment Plan) at a bundled daily rate. Many of the plans are now adding urine drug screens to the bundled daily rate and imposing a cap on the number of screens that can be done during an admission.  Plans are paying rates that are much nearer to a Medicare rates.  Payments based on a reasonable percentage of a provider’s charge are becoming harder to find, as the calculation of what is a usual and customary rate of payment continues to decline.

Yet, a great portion of substance abuse facilities are operating with more clinical staff, at a higher level through licensure, with better Electronic Medical Systems, more programs to combat some of the symptoms of addiction and with a greater awareness of compliance with state and federal guidelines.  Even with these necessary improvements, reimbursements continue to decline.Continue reading

HMO Patient Emergency Care Reimbursement

Compliance With Laws & Regulations

By: Bradley M. Seldin, Co-counsel Guest Contributor

Prohibitions against balance billing Health Maintenance Organization (HMO) patients have been around for more than a decade, but many non-contracted providers to HMO patients still don’t fully understand their rights to payment when it comes to collecting monies from patients and HMO’s.

HMO’s often have predetermined rates they pay to non-contracted healthcare providers; sometimes they are artificially low, do not reflect what is written in the member’s contract, or do not abide by what is required by applicable law.  As a result, these providers may end up being underpaid if they don’t have a written contract with the payor and they do not understand the payment methodology being applied to them.  This is of particular significance to emergency care providers. ER doctors and hospitals must, by law, provide emergency care without regard to whether the patient has an ability to pay for the treatment received.

Following their provision of emergency care, medical providers often question the payment obligations under the patient’s Health Maintenance Organization contract. If the emergency medical provider has a direct written contract, the reimbursement is governed by that participating provider contract’s reimbursement terms.

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Managed Care Appeal: How to Make an Out of Network Appeal Count

out of network appealBy: Karina Gonzalez

As many know, out-of-network providers have much different appeal rights with commercial plans than in-network providers.  It is important to understand each health plan’s appeal procedure as well as time requirements for an appeal may vary.  However, the appeal process is still one of the most important tools providers have to get paid in the current environment of reduced reimbursements, caps on the number and frequency of services, bundled payments based on specific codes, delayed payments, daily errors in claims processing leading to denied claims, claw backs, and the list goes on.  Continue reading

Copay Waiver Questions: OIG Opines that Charities Allowed to Help with Patients’ Insurance Obligations

financial hardshipBy: Jacqueline Bain

In the healthcare business, giving a patient a break on a health insurance copay is often viewed as suspicious. The reasoning for the suspicion is that the financial incentive may give one provider a competitive advantage over another, or persuade a patient to seek services that might not be medically necessary.  Moreover, any person who interferes with a patient’s obligations under his/her health insurance contract may be viewed as tortuously interfering with that contract. However, in an advisory opinion issued on December 28, 2016, the OIG opined that, in certain instances, a non-profit, tax-exempt, charitable organization could provide financial assistance with an individual’s co-payment, health insurance premiums and insurance deductibles when a patient exhibits a financial need.

The party requesting the advisory opinion was a non-profit, tax-exempt, charitable organization that did not provide any healthcare services and served one specified disease. The non-profit, tax-exempt, charitable organization is governed by an independent board of directors with no direct or indirect link to any donor. Donors to the non-profit, tax-exempt, charitable organization may be referral sources or persons in a position to financially gain from increased usage of their services, but may not earmark funds and or have any control over where their donation is directed.Continue reading

Cigna Lawsuit Loses Texas Case Against Humble Surgical Hospital, Hit with $16 Mil Judgment

anti kickbackBy: Karina Gonzalez

Cigna recently sued a Texas hospital, Humble Surgical for overpayments.  Humble Surgical is an out-of-network (OON) provider.  Cigna alleged fraudulent billing practices and that the hospital engaged  in a scheme to defraud payors by waiving members’ financial responsibility.

While the suit involved many other  allegations  our article focuses on the arguments Cigna made on failure to collect co-payments, deductibles, and co-insurance and fee-forgiving practices by the hospital.   There were several other issues raised that are important to various practices that Cigna has engaged in with out-of-network providers.  Cigna has consistently audited South Florida providers alleging failure to collect patient financial responsibility or fee-forgiveness, then informing the provider that it was not entitled to any reimbursement because these practices fell within the exclusionary language of the member’s plan.

The suit brought under federal law, ERISA and also Texas common law seeking reimbursement for all overpayments. Cigna was seeking equitable relief including imposing a lien or constructive trust on  fees paid to the hospital.

Humble Surgical counter sued against Cigna for  nonpayment of patients’ claims, underpayment of certain claims and delayed payment of all claims in violation of ERISA, including other causes of action. Here’s what happened: Continue reading

Out of Network VOB Process Hits a Speedbump

VOBBy: Urgent Medical Billing, Guest Contributor

The verification process is an important step in the billing cycle. When done correctly the patient’s “VOB” will allow a healthcare provider to quickly determine if they can accept the patient for treatment or not. A good verification will tell a provider the general information about a patient’s insurance policy such as the deductible, the co-insurance and the out of pocket maximum. A very good verification will also include accreditation requirements, information on who would receive the payment for services, correct claims addresses for professional and facility charges and more. The quicker a verification is done, the sooner a patient can be brought into treatment. Speed and accuracy is the name of the game when it comes to insurance verification and United Healthcare, until very recently, was one of the quickest policies for an Insurance Verification Specialist to work with. Continue reading

The Final Overpayment Rule and Practical Steps for Compliance

By: James Saling

On February 11, 2016, the Center for Medicare and Medicaid Services (CMS) issued the final overpayment rule commonly referred to as the “60 Day Rule”. Physicians, labs, hospitals, and other providers that receive reimbursement under Part A or B must comply with the 60 Day Rule or face penalties under the False Claims Act.

The 60 Day Rule requires that overpayments (e.g., payment for coding errors) be reported and returned to CMS within 60 days after the date on which the overpayment was identified. Identification of the overpayment was addressed at length in the regulation.  The 60-day clock to identify overpayments starts ticking “when the person has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.”  Reasonable diligence means that the provider takes steps to uncover overpayments and steps to quantify the amount of the overpayment.Continue reading

ASAM & Cigna to Collaborate on Performance Measures in Addiction Treatment

Recruitment and Retention Agreements

cigna asamBy: Karina Gonzalez

ASAM and announced a collaborative effort with  Brandeis University to test and validate three ASAM performance measures for addictions treatment. ASAM hopes that this project will provide measure testing of performance measures that will be accepted and adopted in the treatment of patients with addiction.

Three measures will be tested using two years of de-identified Cigna claims data  for  substance abuse.  The measures to be  tested in the study will be: use of pharmacotherapy for individuals with alcohol use disorders; pharmacotherapy for individuals with opioid use disorders and follow-up after withdrawal.  This is expected to be a six month project.Continue reading

Addiction Treatment Attack by Payers Grows

money viseBy: Jeff Cohen

Addiction treatment providers continue to react to an assault by payers to run them “out of town.”  The first round of attacks (in the Fall of 2014) focused on the practice of copay and deductible write offs.  The phrase cooked up by lawyers for Cigna, “fee forgiveness,” wound its way into the courts system in Texas in a case (Cigna v. Humble Surgical Hospital, Civ. Action No. 4:13-CV-3291, U.S. Dist. Ct., S.D. Tex., Houston Division) against a surgery center, where Cigna argued that the practice of a physician owned hospital in waiving “patient responsibility” relieved the insurer from paying ANYTHING for services needed by patients and provided to them.  Though the case did not involve addiction treatment providers, it gave addiction treatment lawyers a look into what was going to come.  The same argument made in the Texas case was the initial attack by Cigna in a broad attack of the addiction treatment industry, especially in Florida.

As addiction treatment providers fielded Cigna’s “fee forgiveness” attack in the context of “audits,” providers held firm to the belief that justice would prevail and that they would soon restore a growing need for cash flow.  “If we just show them that we’re doing the right thing,” providers thought, “surely they will loosen up the purse strings.”  After all, this was a patient population in terrific need of help, with certain [untested] protection by federal law (the Mental Health Parity Act).Continue reading