Clarifying Medicare Participation and Assignment Rules, Part Two

This article is the second of a two-article series that examines ways that may help O&P practitioners limit Medicare audit risk and denials. As noted in part one of this series , published in the June issue of The O&P EDGE, there are few encouraging signs or protective steps that O&P practitioners can pursue to protect themselves from the burden of Medicare claim audits. Questions often arise about whether O&P practitioners can limit their Medicare involvement in order to limit their audit risk exposure. As detailed previously, even nonparticipating O&P providers who refuse assignment remain liable for any overpayment determinations made by the Durable Medical Equipment Medicare Administrative Contractors (DME MACs). This article examines other possible tactics some O&P practitioners may pursue in seeking to limit their Medicare audit risk. These tactics include beneficiary choice not to submit a Medicare claim, the use of Advance Beneficiary Notices (ABNs), and provider choice not to enroll in Medicare. IS THERE REALLY NO WAY TO AVOID MEDICARE LIABILITY? At this time, anecdotal evidence suggests that audits of unassigned claims have been rare, if not nonexistent. But there is no guarantee this will remain the case. The remaining risk for O&P practitioners arises in large part because a claim is still being submitted to Medicare for payment for the items and services provided. Moreover, the O&P practitioners themselves are required to submit those claims, even when they do not accept assignment. So how does a provider or supplier avoid submitting such claims? BENEFICIARY CHOICE TO REJECT OR REFUSE MEDICARE One way an O&P practitioner may be able to avoid submitting a claim to Medicare is if the beneficiary chooses to refuse or reject his or her Medicare benefits for the items and services provided. This is not a realistic option, as the vast majority of Medicare beneficiaries are simply not in the financial position to reject their Medicarecovered benefits. Nonetheless, beneficiaries may make such a choice for a variety of reasons, including philosophical objections to Medicare, access to alternative insurance coverage, or the ability to pay out-of-pocket. However, while a beneficiary may believe that private-pay insurance coverage will pay for the services in lieu of Medicare, this may not be the case-if Medicare is the rightful primary payer for services, the secondary insurer may not pay without proof of a Medicare denial. In that case, a claim would have to be submitted to Medicare first. Furthermore, O&P practitioners should be aware that beneficiaries who elect not to use their Medicare coverage can change their minds after the fact. Even after a beneficiary signs paperwork indicating that he or she does not wish to have Medicare billed for an item or service, that person may subsequently request payment by Medicare within the timeframe for filing a claim (i.e., one year from the date of service). Upon this request, the healthcare provider must submit a Medicare claim and refund any dollars in excess of the Medicare-allowed amount to the patient. In addition, if the beneficiary dies, the legal representative for the patient's estate can request that Medicare reimbursement be sought. Thus, even if a given patient agrees not to submit a Medicare claim for O&P services, which has the potential to protect the provider against Medicare liability resulting from denied claims, it is not an absolute guarantee. WHAT ABOUT ABNs? Issuing an ABN to a beneficiary is the only reliable way for a Medicare-enrolled O&P practitioner to avoid having to repay Medicare for items provided to beneficiaries that are later deemed not medically necessary. An ABN is a document that providers and suppliers may use to alert Medicare beneficiaries that the items or services about to be provided are not going to be-or likely not going to be-covered under Medicare. The document is designed to ensure that the beneficiary is given ample notice of the possible lack of Medicare coverage and payment. The document also allows the provider or supplier to request payment directly from the beneficiary if the claim is ultimately denied by Medicare. While this seems like it could be a useful tool for O&P practitioners who are facing constant claim denials, ABNs must be used with caution. If the item provided to a beneficiary falls within a Medicare-covered benefit, an ABN may only be issued where the supplier has reason to believe that the specific coverage criteria are not met and that the claim will be denied. Thus, if an O&P practitioner legitimately believes that he or she is missing required documentation to support the medical necessity of a prosthesis or prosthetic component, he or she may issue an ABN to allow recovery of payment from the beneficiary if the claim is in fact submitted and then denied. However, if it is within the power of the healthcare provider to cure an administrative or documentary deficiency, the provider may not issue an ABN as an alternative to fixing the deficiency. (Author's note: It is not permissible for a provider or supplier to submit a claim to Medicare that it knows is not in accordance with Medicare requirements. Continued submission of such claims could result in liability for submitting false claims.) But, if an O&P practitioner believes that all coverage criteria for an item are, in fact, satisfied and fears the claim will be audited and denied anyway, a preemptive ABN may not be issued. Suppliers may not simply begin issuing ABNs because the supplier has been audited on similar claims in the past. What about when a national coverage decision provides that a particular service is never covered, under any circumstances, as not reasonable and necessary under §1862(a)(1) of the Social Security Act? In this instance, an ABN that gives the reason for expecting a denial that "Medicare never pays for this item/service," may be routinely given to beneficiaries, and no claim need be submitted to Medicare. Otherwise, routine and precautionary uses of ABNs are prohibited. "Generic" ABNs are routine ABNs given to beneficiaries that do no more than state that Medicare denial of payment is possible, or that the provider does not know whether Medicare will deny payment. Such generic ABNs are not acceptable under Medicare guidelines. ABN standards are also not satisfied by a generic document that is little more than a signed statement by the beneficiary to the effect that, should Medicare deny payment for any service or device, the beneficiary agrees to pay the provider directly. An ABN must specify the service as well as a genuine reason that denial by Medicare is expected. Simply stating on the ABN that the item or service may be considered medically unnecessary, or the equivalent, is not an acceptable reason for denial because it does not explain why the healthcare provider believes the items or services will be denied as not reasonable and necessary. To be acceptable, the ABN must give the beneficiary a reasonable idea of why the provider is predicting the likelihood of Medicare denial so that the beneficiary can make an informed consumer decision whether or not to receive the service or device and pay for it out of pocket. For O&P practitioners, there is a required ABN form-Form CMS-R-131. For the ABN to be valid, it is important that the proper procedures for issuing it are followed. The healthcare provider should hand deliver the ABN to the beneficiary or authorized representative. The ABN must be prepared with an original and at least one copy. The healthcare provider must retain the original and give the copy to the beneficiary or authorized representative. The copy is given to the beneficiary immediately after the beneficiary signs it. Legible duplicates, fax copies, electronically scanned copies, or photocopies are sufficient. If a beneficiary is not given a copy of the ABN and later claims that the ABN maintained by the healthcare provider is different from the ABN he or she signed, the ABN will be deemed invalid. If a beneficiary refuses to sign a properly executed ABN, the healthcare provider should consider not furnishing the item or service (unless refusing the item or service is not an option). The Centers for Medicare & Medicaid Services (CMS) considers abuse of the ABN process to be a serious violation of Medicare rules, and healthcare providers who have a pattern of issuing ABNs may attract heavy scrutiny. It is also important to note that ABNs are not an absolute shield, even when used appropriately. In particular, a beneficiary must be given an ABN far enough in advance of provision of an item or medical service so that he or she can make a rational, informed consumer decision without undue pressure. Last minute notification can be coercive, and a coercive notice is a defective notice. In fact, an Administrative Law Judge (ALJ) recently threw out an ABN for a blood test and held the physician liable for the overpayment because the ABN was presented on the day of the blood test when the patient was stressed about his medical condition. The ALJ deemed the stress to be sufficient to cause the beneficiary to feel as if he had no choice but to sign the ABN and receive the test or risk endangering his health further. This illustrates the real possibility of supplier liability for items provided to Medicare beneficiaries, even when an ABN is issued. Despite the administrative hoops involved in issuing a valid ABN, it can be used to protect O&P practitioners against loss of reimbursement for denied items in certain circumstances, particularly for certified prosthetists who are providing lowerlimb prostheses with high-tech components to beneficiaries whose functional levels may not fully justify the components. It remains critical, however, that the full reason for any anticipated denial be set forth on the issued ABN. In addition, O&P practitioners must be certain to obtain full reimbursement from any beneficiaries whose claims are denied by Medicare; failure to charge the beneficiary the same amount as was charged to Medicare (i.e., the Medicare-allowed amount) for a denied claim can implicate other fraud and abuse concerns, namely beneficiary inducement. PROVIDER CHOICE NOT TO ENROLL IN MEDICARE The majority of the discussion in this article series assumes that the O&P practitioner is enrolled in the Medicare program. Although most healthcare providers in the United States are enrolled, there is, however, no requirement for a healthcare provider to enroll in Medicare. Furthermore, the Social Security Act ensures that Medicare beneficiaries are provided with free choice of healthcare providers. As a result, there is a nascent movement among some physicians not to enroll in Medicare but still provide services to any Medicare beneficiaries who come to them for care. Because of the Free Choice by Patient statute (42 U.S.C. §1392a), the beneficiary may then independently seek reimbursement from the Medicare program for the care received. This is a model that, in theory, may also be useful for O&P practitioners. Unfortunately, it is less clear whether the beneficiary will actually be reimbursed for items and services provided by a practitioner who is not enrolled in the program. Under the statute, entitlement to reimbursement appears to exist, but CMS and its contractors have proven to be opposed to this concept. In fact, while the statute gives beneficiaries free choice of healthcare providers, a federal regulation exists that can be read to prohibit healthcare providers from taking payment from Medicare beneficiaries unless they are enrolled under Medicare (42 C.F.R. §424.505). The regulation states: "To receive payment for covered Medicare items or services from either Medicare...or a Medicare beneficiary...a provider or supplier must be enrolled in the Medicare program." CMS and its contractors have pointed to this regulation in letters to unenrolled providers and suppliers, arguing that the healthcare entity must either enroll in Medicare or provide the care for free to the Medicare beneficiary. However, despite the threat of financial penalties in those letters, no known enforcement actions have been carried out by CMS. But this does not mean that CMS would never seek enforcement or pursue an unenrolled provider or supplier, particularly if that entity continued to provide care to Medicare beneficiaries for which it received payment directly from the beneficiaries. CMS' opposition stems in large part from the fact that the healthcare provider is immunized from Medicare liability of any sort by refusing to enroll. As an unenrolled provider or supplier, it is impossible for CMS to impose its rules and requirements upon the entity. As noted many times by U.S. courts, participation (in the broad sense) in the Medicare program is entirely voluntary (though CMS' attempts to conscript providers and suppliers under 42 C.F.R. §424.505 argue otherwise). Given the existence of 42 C.F.R. §424.505, despite strong legal arguments that may be available to counteract the regulation, choosing not to enroll in Medicare as an O&P practitioner is a potentially risky approach to take. Furthermore, even considering the attraction of being free of Medicare restrictions and audits, in reality, the usefulness of this approach for O&P practitioners may be limited. While some O&P items can be paid for out-of-pocket, the costs of many such items are prohibitive if an individual is expected to front the cost for the item, especially if there is some question about whether Medicare will reimburse the patient for any of the cost. Likewise, few Medicare beneficiaries are likely to be willing to go through the process when other Medicare-enrolled O&P practitioners are available to serve them. CONCLUSION There are no easy ways for O&P practitioners to avoid Medicare audits and potential liability for overpayments entirely, but as discussed in this article series, there are tools that can be used in a variety of ways to soften the impact. Probably the best (though not foolproof) approach is not to accept assignment for Medicare claims. While this approach does not fully protect against audits and overpayments, it does provide some protection for now. As noted previously, audits of such claims appear to be nonexistent at this time. The Medicare Administrative Contractors (MACs), and presumably including the DME MACs, are prohibited from using targeted, provider-specific postpayment review on unassigned claims at this time. This prohibition does not prohibit prepayment review by the MACs and it does not stop the Recovery Auditors, Zone Program Integrity Contractors, Comprehensive Error Rate Testing contractor, or other Medicare contractors from auditing these claims (with the DME MACs enforcing any subsequent overpayment determinations). However, it does reduce the probability of some audits for now. In addition, the low level of auditing of unassigned claims (and the restriction on MAC audits) may change quickly if entire categories of healthcare providers begin filing claims on an unassigned basis. O&P practitioners should consider their options carefully, weighing the pros and cons of any steps taken to mitigate audit risk. Many of the approaches set forth in this article involve intricate aspects of Medicare law that must be taken into account and carefully implemented to be successful. As always, careful documentation and full compliance with coverage requirements are the best approaches to limiting liability under the Medicare program. In all instances where O&P providers and suppliers seek to mitigate audit risk through the use of mechanisms described, the authors encourage independent review of the facts and circumstances of each scenario by legal counsel. Peter W. Thomas, JD, is general counsel for the National Association for the Advancement of Orthotics and Prosthetics (NAAOP). Christina A. Hughes, JD, MPH, is an associate with Powers Pyles Sutter & Verville, Washington DC

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