How the Government Continues to Break the Law on Patient Coverage Determination “The Illegal Improvement Standard”

By Sean M. Weiss, CHC, CEMA, CMCO, CPMA, CPC-P, CMPE, CPC

Partner/ Vice President and Chief Compliance Officer

DoctorsManagement, LLC

The impact on Medicare Beneficiaries and their physicians by non-clinical auditors working at the carriers or their contractors and the Office of Inspector General has and continues to be a very big problem. Before some of you reading this get your feelings hurt by my opening statement allow me to further clarify by saying these auditors more often than not hold a certification such as a CPC but don’t possess the requisite skills in the specialties for which they are auditing and this is what leads to problems. An OIG study showed that ZPICs cost the government more than $80mm of the $120mm invested in them due to poor data collection and poor auditing resulting in cases being overturned during the appeals process or in court rooms. Maybe this is one of the reasons they changed their acronym to UPIC…  

The truth is, an E/M service is not an E/M service and the verbiage used to describe and define patient conditions in one specialty is often not the same language used in another specialty to describe and define their patients’ condition(s) or the intensity/complexity of those conditions. Auditing for family medicine is not the same as auditing for neurosurgery just as auditing for GYN is not the same as auditing for interventional cardiology. The point I am trying to desperately drive home here is that if you are going to audit a particular taxonomy code then you should have skills in that specialty to understand the diseases dealt with, when something is exacerbated mildly vs. severely without the doctor using the words mild or severe. You should understand the anatomy and physiology of the area(s) that specialty is focused on, and most importantly you should understand how to properly pronounce terms related to that area. Even Medicare believes this… just look at Section 3.1.1.1 of the Medicare Integrity Manual, which requires that coverage determinations be made only by RNs, LPNs or physicians, unless the task can be delegated to another licensed health care professional. Reviews of coding determinations, likewise, must be made by certified coders, but should also be made by those who possess the requisite skills in the specialty they are reviewing. The section of the Medicare Benefits Integrity Manual cited above goes on to state “Upon receipt of disclosure of the identity and qualifications of the auditors, a request for the disclosure of the identity and qualifications of the auditors should be made”. We typically escalate cases to an Administrative Law Judge hearing at some point during the appeals process, and the right exists to request formal discovery of such materials.

These days I spend the majority of my work week providing litigation and audit appeal support for our clients and for more than 25 law firms across the United States. For the past 10+ of my 22-year career in this industry I have maintained greater than a 95% success rate in getting cases thrown out, overturned or monetary demands reduced to actual damages, which often times is peanuts compared to what the extrapolation was. Why have I been able to attain such a high success rate? The answer is simple… It’s because I know where to look for guidance related to specific matters and structure compelling arguments that cannot be overlooked or simply dismissed. The success is not because I am smarter than anyone else, because the truth is, I am of average intelligence, I just have a stronger desire to win than my opponent and that means I go to the greatest of lengths to ensure I leave no stone unturned and think of every possible response or rebuttal from the other side so that I am prepared with a solid and sensible response.

The first part of this article was to set the tone for something I believe is criminal within our healthcare system of coverage and reimbursement and that is the Medicare Law tied to the Improvement Standard. If you are not familiar with this, be patient, you will soon enough… Currently, it is illegal to use the Improvement Standard “rule of thumb” to deny coverage conflicts with the Medicare Act. Unfortunately, due to a lack of training and education within the system auditors still apply this standard across multiple care settings. Those who hold the power to make determinations throughout the Medicare decision-making process ardently follow this Improvement Standard and it deprives tens of thousands if not more from receiving proper care and treatment they desperately need.

This Improvement Standard is especially prevalent in the coverage of maintenance health services and physical/occupational therapy services. Let’s take a look at the federal regulations surrounding this matter: "The restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities…" The regulations go on to state that, “Support coverage if the individuals’ condition will improve "OR the skills of a therapist [are] necessary to perform a safe and effective maintenance program.” Indeed, the Medicare Act itself only refers to the need to improve with regard to services for a “malformed body member.” So, unless care is specifically for the improvement of a "malformed body member," improvement is NOT necessary for Medicare coverage. A light bulb should be going off in your head right now if you are an attorney or if you are a consultant providing litigation or audit appeal support.

There was a big case several years back (Jimmo v. Sebelius) The lawsuit, Jimmo v. Sebelius, No. 11-cv-17 (D.Vt.), was filed January 18, 2011, and was brought on behalf of a nationwide class of Medicare beneficiaries by six individual beneficiaries and six national organizations representing people with chronic conditions, to challenge the use of the illegal Improvement Standard. The case took more than 2-years to settle but eventually a settlement agreement was reached between the parties and here is what it said… The proposed settlement was filed in federal District Court on October 16, 2012. On November 20, 2012 Chief Judge Christina Reiss of the District of Vermont signed an order preliminarily approving the Settlement Agreement. The Settlement Agreement clearly states that qualification for Medicare coverage turns on the beneficiary’s need for skilled care (nursing or therapy) not on his or her potential for improvement. The Settlement applies to Medicare coverage for home health care, skilled nursing facility services, outpatient therapies, and to some extent, care provided by inpatient rehabilitation facilities. The judge granted final approval of the Settlement after the Fairness Hearing on January 24, 2013. Let’s take a look at some of the key provisions of the Settlement Agreement, which include the following:

·        “A nationwide class was certified consisting of all Medicare beneficiaries who received an adverse administrative decision based on the Improvement Standard that became final and non-appealable after January 18, 2011. This means that the case applies to Medicare beneficiaries all over the country. Many class members will be entitled to a re-review of their claims if they were denied on the basis of an Improvement Standard. The Re-review process will begin after the Centers for Medicare & Medicaid Services (CMS) revises its policy manuals and completes an education campaign. This happened in 2013 but unfortunately auditors throughout CMS as well as those charged with the responsibility to make coverage determination are still using this illegal Improvement Standard…

·        CMS, with input from plaintiffs' counsel, must revise relevant portions of the Medicare Benefit Policy Manual and other guidelines, to eliminate the requirement that a beneficiary show a potential for improvement in order to qualify for coverage. CMS also has the option of issuing a Ruling on the corrected policy. Again, as stated above this happened in 2013…

·        CMS must implement a nationwide Educational Campaign, using written materials, interactive forums, and national calls, to communicate the corrected maintenance coverage standards to beneficiaries, providers, contractors, and adjudicators. Happened in 2013…

·        CMS must perform random samplings of Medicare Qualified Independent Contractor (QIC) decisions to determine if the corrected Medicare coverage policy is being applied appropriately. Not sure if this ever happened since my research has not been able to turn anything up. However, if I uncover something I will update this article…

·        CMS is to review up to 100 claims brought to their attention by plaintiffs' counsel, and must meet with plaintiffs' counsel (from Center for Medicare Advocacy Medicare and Vermont Legal Aid) five times on a bi-annual basis. Not sure if this ever happened since my research has not been able to turn anything up. However, if I uncover something I will update this article…

·        The Court will maintain jurisdiction for up to two or three years after the end of the Educational Campaign (the time frame depending on whether CMS issues a CMS Ruling), during which time plaintiffs may seek enforcement of any Settlement provisions with which the Secretary is not complying.”

Here are some additional aspects of the settlement that you need to be aware of:

·        If services were provided in an inpatient rehabilitation facility (IRFs) or comprehensive outpatient rehabilitation facilities (CORFs) the standards do not apply.

·        Payment to therapists will be made by Medicare for “the establishment or design of a maintenance program,” “the instruction of the beneficiary or appropriate caregiver,” and the “necessary periodic reevaluations...of the beneficiary and maintenance program.”

·        Medicare covers skilled therapy services including: home health services, outpatient therapy services, and services provided within a skilled nursing facility, if the services are “necessary to maintain the patient’s current condition or prevent or slow further deterioration.”

·        Coverage for skilled care, including therapy provided in a patient’s home as long as the patient is homebound (not required to be confined to a bed).

·        Medicare coverage for outpatient physical, occupational, and speech therapy services does not depend on a patient’s “potential for improvement from the therapy but rather on the beneficiary’s need for skilled care.”

·        The settlement was effective immediately for both Medicare and Medicare Advantage plans.

·        The ruling did not result in any new regulations. What it did was to provide a detailed clarification of existing standards (“Nothing in this Settlement Agreement modifies, contracts, or expands the existing eligibility requirements for receiving Medicare coverage...”)

At the end of the day, even though I focused on one aspect (Jimmo) of the illegal Improvement Standard it is important to understand as I stated earlier that this standard applies across the spectrum of services and when audit findings are adverse and lead to demands from the government because they state that payment for services that will not lead to improvement in the patients’ condition are not warranted you’ll have a head start on how to defend your case or at least where to begin building your strategy…

About the Author: Sean M. Weiss is a Partner/ Vice President & Chief Compliance Officer for DoctorsManagement, LLC. Sean has dedicated his career to helping healthcare facilities reduce the risk of noncompliance and achieve measurable financial results. An accomplished compliance and management professional, Sean has extensive knowledge of the inner workings of government agencies at both the federal and state level, including the Office of Inspector General, Department of Justice and The United States Attorney’s Office. Sean has been recognized time and again by clients for successfully protecting their organization from unwarranted penalties and ensuring they receive due process. He has protected thousands of physicians, medical practice groups, and hospitals from undue penalties. In his medical audit appeal defense work Sean and his team of auditing and compliance experts have a proven record of having claims dismissed that had been brought against large and small healthcare organizations targeted by federal (Medicare), state (Medicaid), and commercial insurance payors. Medical providers, Law Firms and facilities regularly turn to Sean in the event they receive notice of wrongdoing. Sean also develops comprehensive, customized compliance plans, and he serves as a third-party compliance consultant to ensure that client compliance is absolute.

For more information on Sean or the litigation and audit appeal services offered visit us at www.doctors-management.com or via email at [email protected]