©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Caliber Virginia Audit Preparation Seminar Colin McCarthy Hancock, Daniel, Johnson & Nagle, PC February 12, 2016

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Disclaimer: This presentation is offered for discussion purposes only and shall not constitute legal advice. Audit Process Appeal Process Preparations Questions 2

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com DMAS Program Integrity Division –Provider Review Unit –Mental Health –Hospital HMS –Hospital DRG –Mental Health –Medicaid RAC Xerox –Pharmacy & DME Myers & Stauffer –Physicians & Waiver Services Audit Process Who are the Auditors? 3

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Audit Process FY2014 Overpayments Identified by DMAS Audits 4

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Audit Process FY2015 Overpayments Identified by DMAS Audits DMAS PID mental health audits doubled between FY2014 and FY

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Payment Suspension –DMAS has authority under federal regulations to suspend payments to a provider based on a “credible allegation of fraud.” –“DMAS has worked with the MFCU to identify credible fraud allegations and implemented processes to block payment to those providers in the DMAS claims payment system.” Provider Scorecarding –Automated system to assign risk scores to a number of metrics that are associated with the provider ranking providers based on fraud, waste, and abuse vulnerabilities. Audit Process More from FY2015 Report 6

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Predicting Retractions –HMS working on an advanced claims selection process that will use past audit results to predict retractions. –Allows the contractor to focus on claims that are likely to contain the largest amount of recoverable overpayments. –Utilizing this approach for the FY2015 DRG reviews resulted in a 12.6 percent average increase in identified recoveries per review, for a total estimated impact of more than $720,000 in increased recoveries for that contract. Audit Process More from FY2015 Report 7

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com HMS and DMAS auditors have focused on a number of issues in recent audits, including: –Client Eligibility –QMHP, LMHP and QPPMH Qualifications –Progress Note Documentation –Services are Therapeutic in Nature –Services Provided Outside the Home –Services Provided to Other Family Members –Incomplete Assessments, Reassessments, or Individualized Service Plans Audit Targets 8

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Intensive In-Home Services (IIH) Mental Health Skill Building Services (MHSS) Therapeutic Day Treatment Crisis Intervention Crisis Stabilization Any service is at risk for audit Audit Targets 9

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com HMS or DMAS will typically come on site to request, review, and copy client records. –Some providers have reported receiving a list of clients files that will be reviewed ahead of time, but providers are not entitled to prior notice. –The audit team may be on site for several days. The auditors will take several weeks to review the documentation and issue a preliminary findings report. The provider will be given an opportunity to respond to the preliminary report and provide additional documentation before the final audit report is issued. Audit Process 10

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com 11

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Posted on Nov. 12, 2015 DMAS states: During the audit and appeal processes, DMAS shall only consider documentation submitted by the provider during the course of the audit and prior to the deadline stated in the preliminary findings letter. Providers may challenge the legality of this policy, but for now, it is important to include ALL documentary evidence during the audit or in response to the preliminary findings letter. Audit Process Medicaid Memo on 1st Stop Health Services v. DMAS Link: 12

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Audit Process Appeal Process Preparations Questions 13

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Reconsideration/Response to Preliminary Findings Final Audit Report Informal Appeal Formal Appeal Circuit Court Appeal Process Steps 14

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Once the auditors have issued a preliminary audit report, the provider will have 30 days to file an optional request for reconsideration directly with the contractor. –This request should assert arguments for any disputed allegations and should include supporting documentation, when applicable. –Include ALL supporting documentation to be considered in the audit, or you may be precluded from relying on it in the appeal. Once the auditor receives and reviews the request for reconsideration, the auditor will issue its final audit report. The final audit report will identify each denied claim, the reason(s) for denial, the alleged overpayment amount, and will contain information about the administrative appeals process. Appeal Process Reconsideration/Response to Preliminary Findings 15

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Governed by 12 VAC to -560 – –Section 500: Definitions –Section 520: General Provisions –Section 540: Informal Appeals –Section 560: Formal Appeals DMAS Emergency Regulations – Appeal Process 16

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com "Administrative dismissal" means a dismissal that requires only the issuance of a decision with appeal rights but that does not require the submission of a case summary or any further proceedings. "Day" means a calendar day unless otherwise stated. "Transmit" means send by means of the U.S. Postal Service, courier or other hand delivery, facsimile, electronic mail, or electronic submission. Appeal Process Definitions: 12 VAC

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Whenever DMAS or a provider is required to file a document, the document shall be considered filed when it is date stamped by the DMAS Appeals Division in Richmond, Virginia. Whenever the last day specified for the filing of any document or the performance of any other act falls on a day on which DMAS is officially closed, for the full or partial day, the time period shall be extended to the next day on which DMAS is officially open. Whenever DMAS or a provider is required to attend a conference or hearing, failure by one of the parties to attend the conference or hearing shall result in dismissal of the appeal in favor of the other party. Documents that are filed with the DMAS Appeals Division or the hearing officer after 5 p.m. eastern time on the due date shall be untimely. It is presumed that providers receive items mailed sent by U.S mail to their last known address within three days after DMAS mails sends the item by U.S. mail. It is presumed that providers receive items sent by or facsimile, to their last known address or facsimile number, on the date sent. Appeal Process General Provisions: 12 VAC

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com DMAS shall reimburse a provider for reasonable and necessary attorneys' fees and costs associated with an informal or formal administrative appeal if the provider substantially prevails on the merits of the appeal and DMAS' position is not substantially justified, unless special circumstances would make an award unjust. In order to substantially prevail on the merits of the appeal, the provider must be successful on more than 50% of the dollar amount involved in the issues identified in the provider's notice of appeal. Appeal Process Attorneys’ Fees: 12 VAC

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Provider must file written notice of informal appeal within 30 days of receipt of the DMAS decision (final audit report). The notice of informal appeal must identify the issues being appealed. Failure to file a written notice of informal appeal that identifies the issues being appealed within 30 days of receipt of the decision shall result in an administrative dismissal of the appeal. Appeal Process Informal Appeal: 12 VAC ; 20

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com DMAS shall file a written case summary with the DMAS Appeals Division within 30 days of the filing of the provider's notice of informal appeal. DMAS’ case summary must address each disputed adjustment, patient, service date, or other appealable issue identified by the provider in its notice of informal appeal and shall state DMAS' position for each disputed adjustment, patient, service date, or other issue identified by the provider. The case summary shall contain the factual basis for each disputed adjustment, patient, service date, or other appealable issue identified by the provider and any other information, authority, or documentation DMAS relied upon in taking its action or making its decision. Failure to file a written case summary with the DMAS Appeals Division in the detail specified within 30 days of the filing of the provider's notice of informal appeal shall result in dismissal in favor of the provider on those appealable issues not addressed in the detail specified. Appeal Process Informal Appeal: 12 VAC ; 21

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com The informal appeals agent shall conduct the conference within 90 days from the filing of the notice of informal appeal. If DMAS and the provider and the informal appeals agent agree, the conference may be conducted by way of written submissions. If the conference is conducted by way of written submissions, the informal appeals agent shall specify the time within which the provider may file written submissions, not to exceed 90 days from the filing of the notice of informal appeal. Only written submissions filed within the time specified by the informal appeals agent shall be considered. Appeal Process Informal Appeal: 12 VAC ; 22

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Upon completion of the conference, the informal appeals agent shall specify the time within which the provider may file additional documentation or information, if any, not to exceed 30 days. Only documentation or information filed within the time specified by the informal appeals agent shall be considered. The informal appeal decision shall be issued within 180 days of receipt of the notice of informal appeal. Appeal Process Informal Appeal: 12 VAC ; 23

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Conducted by a neutral hearing officer appointed by the Supreme Court of Virginia. DMAS has objected to providers representing their organizations without legal counsel—may be precluded from making legal arguments. Appeal Process Formal Appeal: 12 VAC

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com A provider appealing a DMAS informal appeal decision must file a written notice of formal appeal with the DMAS Appeals Division within 30 days of the provider's receipt of the informal appeal decision. DMAS and the provider exchange all documentary evidence within 21 days of the filing of the provider’s notice of formal appeal. –Both sides can object to documentary evidence within 7 days of exchange. Appeal Process Formal Appeal: 12 VAC

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com The hearing officer shall conduct the hearing within 45 days from the filing of the notice of formal appeal, unless the hearing officer, DMAS, and the provider all mutually agree to extend the time for conducting the hearing. The hearing is held at DMAS’ HQ in Richmond. After the hearing, parties agree to a briefing schedule. Typically, 30 days to file an opening brief, followed by 10 days to file a reply brief. Appeal Process Formal Appeal: 12 VAC

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com The hearing officer shall submit a recommended decision to the DMAS director with a copy to the provider within 120 days of receipt of the formal appeal request. The parties can file exceptions to the recommended decision within 14 days. The DMAS director issues the final agency decision within 60 days of receipt of the hearing officer's recommended decision. Appeal Process Formal Appeal: 12 VAC

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com If a provider is dissatisfied with the DMAS Director’s final case decision, the provider may appeal the decision to the appropriate Virginia Circuit Court. The provider must file a notice of appeal within 30 days of the DMAS Director’s final case decision. If the provider is unsuccessful at the Circuit Court level, the provider may continue its appeal through the Virginia court system. Appeal Process Circuit Court Appeal 28

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Audit Process Appeal Process Preparations Questions 29

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Understand the process Understand the deadlines Have good documentation practices –With the 1st Stop memo, DMAS will challenge any documentation that was not provided to the auditor during the initial audit or response to preliminary findings. –Imperative to have all relevant documentation available to the auditors or provide it in response to preliminary findings letter. Audit Preparation 30

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Complete medical records for all services billed Authorizations Patient eligibility Staff qualifications (resumes, applications, etc.) Policies and procedures Background checks Audit Preparation Documentation 31

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Self-audits –If documentation missing, gives you an opportunity to find it (if lost), or add addendum or explanatory documentation (dated appropriately) that would be available during an audit. –Staff qualifications:  Make sure resumes and applications show compliance with applicable standards.  Obtain letters from previous employers, transcripts, or other documentation to make sure all requirements are documented. –If the provider identified a billing error during a self-audit (e.g., services billed incorrectly when no services were provided on a certain day), the provider has a legal obligation to self-report and repay any identified overpayments to DMAS. Audit Preparation 32

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com The most successful appeals are based on the merits of the claim: –The services provided were medically necessary; –The services were adequately documented and supported in the medical record; and –The services were provided in compliance with all applicable Medicare regulations and guidance. Providers may prove the merits of the claim through the use of experts, medical summaries, highlighted record documentation and other evidence that is “user friendly” for the decision maker Keys to Successful Appeals 33

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Be Organized—Track all denials, appeal deadlines, appeal outcomes and repayments in a centralized tracking tool. –Set internal working deadlines to ensure appeal deadlines are met. Submit Organized Appeals—Organize the submission to make it easy for the fact-finder to follow your case. –Highlight important documentation; –Include a cover memo; –Organize the record submission by date or other relevant structure; –Include written statements from clinical or utilization review staff, where appropriate; and –Number pages for easy reference. Keys to Successful Appeals 34

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Keep Costs Low—Put policies and procedures in place now to streamline the appeals process. –Obtain assistance from available in-house resources; and –Obtain assistance from affordable outside resources (legal counsel/consultants). Challenge Determinations— –Check to be sure the auditors correctly applied the Medicaid regulations and guidance documents. –Verify that the regulations and guidance applied are applicable to your claim (the document in place at the time services were rendered). Keys to Successful Appeals 35

©2015 Hancock, Daniel, Johnson & Nagle, PC hdjn.com Keep a Copy of all Communications and Documentation— Make sure you can support the timely delivery and complete submission of required documentation. –Submit all appellate documentation via a traceable format (e.g. certified U.S. Mail, Federal Express). –Keep a copy of all submissions for later reference. Keys to Successful Appeals 36

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