The attorneys at DiRuzzo & Company represents health care providers in Medicare audits, administrative appeals, administrative hearing before Administrative Law Judges, and subsequent federal court litigation with the U.S. Department of Health and Human Services (“HHS”) and the Centers for Medicare & Medicaid Services (“CMS”). We represent health care providers at every stage of the process (i.e from start to finish) and have the skill set to take a case into court and on appeal if necessary.

Medicare audits can occur in multiple ways, each with a different entity responsible for the audit function.

Medicare Administrative Contractors (“MACs”) are a private (i.e. non-governmental) entities that have been awarded a geographic jurisdiction to process Medicare Part A and Part B medical claims or Durable Medical Equipment (“DME”) claims for Medicare Fee-For-Service (“FFS”) beneficiaries. CMS relies on a network of MACs to serve as the primary operational contact between the Medicare FFS program and the health care providers enrolled in Medicare. MACs are multi-state, regional contractors responsible for administering both Medicare Part A and Medicare Part B claims. In addition to processing claims for payment submitted by health care providers, MACs also conduct audits of claims submitted. These audits can be either prepayment reviews or post-payment audits.

The Unified Program Integrity Contractor (“UPIC”) (f/k/a the Zone Program Integrity Contractor (“ZPIC”)) investigates instances of suspected fraud, waste, and abuse in Medicare. UPICs also identify any improper payments that are to be recouped by MACs.

Recently, CMS implemented the Comprehensive Error Rate Testing (“CERT”) program to measure improper payments in the Medicare FFS program. CERT is designed to comply with the Payment Integrity Information Act of 2019 (“PIIA”). The CERT contractors are tasked with conducting post-payment audits to determine the percentage of Medicare claims submitted that are erroneous (e.g. ineligible Medicare coverage, erroneous coding (including upcoding), and improper billing). If these criteria are not met or the health care provider fails to submit medical records to support the claim billed, the claim is counted as either a total or partial improper payment and the improper payment may be recouped (for overpayments) or reimbursed (for underpayments).

Recovery Audit Contractors (“RACs”) are private companies under contract with CMS which have been tasked with identifying Medicare overpayments and underpayments and returning Medicare overpayments to the Medicare Trust Funds. Congress has required all RAC contractors be paid by contingency fee, RACs are highly motivated to identify overpayments and other improper payments.

Once an initial Medicare claim determination is made, health care providers (or their respective appointed representatives) have the right to appeal the adverse Medicare coverage and payment decision rendered by CMS. Section 1869 of the Social Security Act (codified at 42 U.S.C. § 1395ff) and 42 C.F.R. §§ 405.900-405.1140 contains the procedures for conducting appeals of claims in Original Medicare (Medicare Part A and Part B).

An Expedited Determination Appeals Process (for limited number of Medicare Part A claims) allows Home Health Agencies (“HHAs”), Skilled Nursing Facilities (“SNFs”), Comprehensive Outpatient Rehabilitation Facilities (“CORFs”), and Hospices caring for beneficiaries enrolled in Original Medicare (i.e. Medicare Part A and Part B) are required to notify beneficiaries of their right to an expedited review process when these providers anticipate that Medicare coverage of their services will end before they have finished providing them. Hospitals are also required to notify hospitalized inpatient Original Medicare beneficiaries of their hospital discharge appeal rights and their right to appeal a discharge decision.

There are five levels in the Medicare Part A and Part B (i.e. “Original Medicare”) appeals process. The levels are:

• First Level of Appeal: Redetermination by a Medicare Administrative Contractor (“MAC”);
• Second Level of Appeal: Reconsideration by a Qualified Independent Contractor (“QIC”);
• Third Level of Appeal: Decision by the Office of Medicare Hearings and Appeals (“OMHA”);
• Fourth Level of Appeal: Review by the Medicare Appeals Council; and
• Fifth Level of Appeal: Judicial Review in Federal District Court.

A health care provider that is dissatisfied with audit results and/or payment decisions may request a redetermination. A redetermination is a review of the claim by Medicare Administrative Contractor (“MAC”) personnel not involved in the initial claim determination. An initial determination decision is communicated to the health care provider via a Remittance Advice (“RA”). The health care provider has 120 days from the date of receipt of the initial claim determination to file a redetermination request. The redetermination request must be sent to the MAC that made the initial claim determination. Generally, the MAC will send its decision within 60 days of receipt of the request for redetermination.

A health care provider that is dissatisfied with the decision at the first level of appeal may request a reconsideration. A reconsideration is an independent review of the administrative record, including the initial determination and redetermination, by a Qualified Independent Contractor (“QIC”). The health care provider has 180 days from the date of receipt of the redetermination decision to file a reconsideration request. The redetermination decision can be communicated through a Medicare Redetermination Notice (“MRN”), a Medicare Summary Notice (“MSN”), or a Remittance Advice (“RA”).

If a MAC has dismissed a health care provider’s redetermination request, it has the right to appeal a dismissal of the redetermination request to a QIC if it believes the dismissal is incorrect. The request for review must be filed with the QIC within 60 days after the date of receipt of the dismissal. When the QIC performs its review of the dismissal, it will only decide on whether or not the dismissal was correct (i.e. not a merits based decision). If the QIC determines that the MAC incorrectly dismissed the redetermination, the QIC will vacate the dismissal and remand the case to the MAC for a redetermination. However, a QIC’s action after review of a MAC’s dismissal of a redetermination request is binding and not subject to any further review or appeal.

A health care provider that is dissatisfied with the QIC’s reconsideration decision in the second level of appeal may request a hearing before an Administrative Law Judge (“ALJ”), or a review of the administrative record by an attorney adjudicator within the Office of Medicare Hearings and Appeals (“OMHA”). If the adjudication period for the QIC to complete its reconsideration has elapsed and the QIC is unable to complete the reconsideration by the deadline (with allowance for extensions), a health care provider has the opportunity to escalate the appeal to an ALJ. A request for an ALJ hearing must be filed with OMHA within 60 days of receipt of the reconsideration decision.

ALJ hearings are held by telephone, unless the ALJ finds good cause for an appearance by other means such as video teleconference (“VTC”) or in person. Hearing preparation procedures are set by the ALJ. CMS or its contractors may become a party to, or participate in, an ALJ hearing after notifying all parties to the hearing. If a health care provider does not wish to have a hearing conducted before an ALJ, but does wish to have the case decided with only a review of the administrative record, the health care provider may waive its right to have an oral hearing and have the case decided exclusively on the documentary record.

Health care providers also have the right to request review of a QIC dismissal, if the amount in controversy and other filing requirements are met. The request for review must be filed in writing with OMHA within 60 days after the date of receipt of the QIC’s dismissal.

If the adjudication period for the QIC to complete its reconsideration has elapsed (with exceptions for extensions for additional evidence submissions and late filing), the QIC must send a notice advising that it cannot complete the reconsideration by the deadline, and advise the health care provider of the right to request escalation of the appeal to OMHA. If the health care provider chooses to escalate the appeal to OMHA, a written request must be filed with the QIC. OMHA’s 180 calendar day period to issue a final decision, dismissal order, or remand order begins on the date the request for escalation is received by OMHA.

For escalated requests for review of a QIC reconsideration, an ALJ or attorney adjudicator generally issues a decision, dismissal order, or remand to the QIC, as appropriate, no later than the end of the 180 calendar day period beginning on the date that the request for escalation is received by OMHA. If OMHA does not issue a decision, a dismissal, or remand order within the adjudication period specified (with exceptions for timeframe extensions noted), the health care provider may send a request to OMHA asking that the appeal, other than an appeal of a QIC dismissal, be escalated to the Medicare Appeals Council. After OMHA receives a valid request for escalation, they will issue a decision, dismissal, or remand order if an OMHA adjudicator is able to issue one within 5 calendar days of receiving the request for escalation, or 5 calendar days from the end of the applicable adjudication period (whichever is later). Otherwise, OMHA will forward the case file to the Medicare Appeals Council and send a notice stating that the appeal has been escalated.

A health care provider that is dissatisfied with OMHA’s decision or dismissal may request a review by the Medicare Appeals Council. If OMHA’s adjudication period has elapsed without an ALJ or attorney adjudicator issuing a decision or dismissal on the request for hearing, the health care provider has the opportunity to escalate the appeal to the Medicare Appeals Council. A request for Medicare Appeals Council review must be filed with the Medicare Appeals Council, a component of the Department of Health & Human Services (“HHS”), Departmental Appeals Board, within 60 days of receipt of the notice of OMHA’s decision or dismissal.

A health care provider who was issued a dismissal by an ALJ or attorney adjudicator has the right to request that the Medicare Appeals Council review the dismissal. The request for review must be filed in writing with the Medicare Appeals Council within 60 days after the date of receipt of the dismissal notice.

If a health care provider files a request to escalate an appeal to the Medicare Appeals Council because OMHA has not completed the action on the request for hearing within the adjudication deadline, a request for escalation can be filed with OMHA. In a case that has been escalated from OMHA, the Medicare Appeals Council’s 180 calendar day period to issue a final decision, dismissal order, or remand order begins on the date the request for escalation is received by the Medicare Appeals Council. Unfortunately, however, due to a large backlog of appeals there is a long delay in OMHA ALJ hearings because OMHA prioritizes Medicare Part D prescription drug denial cases.

Importantly, if the Medicare Appeals Council does not issue a decision, a dismissal, or remand the case to an ALJ or attorney adjudicator within the adjudication period, the health care provider may send a request to the Medicare Appeals Council asking that the appeal be escalated to Federal District Court. Upon receipt of a request for escalation, the Medicare Appeals Council will send written notice to the health care provider that will contain either a decision, dismissal, notice of remand or further instructions on escalation. The health care provider may file a complaint in a Federal District Court within 60 calendar days after the date it receives the Medicare Appeals Council’s notice that the Medicare Appeals Council is not able to issue a timely final decision, dismissal order, or remand order.

Any health care provider may file a compliant in a Federal District Court within 60 calendar days after the date it receives notice of the Medicare Appeals Council’s decision. In order to request judicial review in Federal District Court, the amount remaining in controversy must meet the threshold requirement. This amount is recalculated each year and may change. For calendar year 2021, the amount in controversy is $1,760.

Adverse decisions rendered by a Federal District Court can be appealed to the appropriate United States Courts of Appeals that has jurisdiction review the decision of that specific District Court. Appeals to the United States Courts of Appeals are governed by the Federal Rules of Appellate Procedure, like other federal appeals.