We Got Audited - DoctorsManagement We Got Audited - DoctorsManagement

We Got Audited

“The Result Was Devastating”

by Sean Weiss,Partner & VP of Compliance

I love my work for several reasons. First, I have 9 amazing Partners who always have each other’s back. Second, within our company I get to work with some of the most talented Auditors, Compliance Professionals, Administrative Personnel, Statisticians, Accountants/CPAs and Attorneys. Third, I have access to the most brilliant minds on a daily basis regarding health law including Robert Liles, Amanda Waesch, Thomas Force, Amy Fouts, David Glaser, Ron Chapman II, and the associates at their firms. But, the main reason I love what I do is I get challenged every single day with something new or something so complex that I get to spend my day researching and writing reports that provide the attorneys the necessary information to structure a solid defense for their clients.

There is no doubt that not only the government and their auditors have become super aggressive in their approach to auditing and investigations but so have the commercial payers. Day after day, I receive emails and calls from potential clients and/or their attorneys regarding an audit performed and a refund demanded that is so egregious that I have learned to never be surprised at anything I hear. My job, and that of the team I work with and for, is to ensure Due Process and a level playing field for our clients, which is not necessarily the goal of the government, their contractors, or the commercial payer SIUs. Over the past couple of years the flagrant disregard for the facts and more important the truth is bothersome.

For obvious reasons, I cannot share the names of clients with you but I have an example of what happens during an audit that turned into a governmental referral that I want to share with you… keep in mind, this is not the exception but now what has become the norm. Let me set the scene for you: This is a solo provider rendering services in rural areas for elderly patients in nursing homes who have dementia and other psychological or behavioral issues. Because of their complexity, no one really wants to treat the patients, which in and of itself is a crime, but this provider understood his oath to treat all who require his service without passion or prejudice and that is exactly what he has done for 20+ years. Over the past five (5) years I have represented him in three (3) ZPIC (now UPIC) Audits performed by a CMS contractor that shall remain anonymous and two (2) Commercial SIU Audits. Out of the five (5) audits, four (4) of them were either overturned at the QIC Level (2nd level of appeal for Medicare) or during a call with the auditor and supervisor at the SIU discussing the audit results. However, this last audit conducted by the ZPIC/UPIC turned into a complete disaster and proved to me just how broken some people’s moral compass really is!

Short part to this story… we submitted the claims within 45-days to the contractor who denied all 30 of the claims as not “Medically Necessary.” We appealed to the QIC who overturned 28 out of the 30 claims which is a 93.3% error rate on the part of the contractor! Now, I am providing below a significant portion of my initial letter to the ZPIC/UPIC. They knew they were cooked for failure to or an inability to comply with CMS Regulations in multiple areas. Once the results from the QIC were provided, the contractor opted to refer my client to the OIG for investigation and initiated a 180-day suspension of Medicare payments, which at the time after 23 years of doing this type of work I had never seen or experienced. When I contacted the person I was working with for this audit, they informed me they had nothing to do with the referral nor the payment suspension. However, when I spoke to the investigator at OIG and the Deputy Director at CMS Central, they both confirmed that the person at the contractor who denied knowledge of the referral and the request to initiate the suspension of payments was indeed the person I was speaking with. Talk about unethical. Think about this – my client who has a 6.7% error rate is now being punished and the contractor with a 93.3% error rate continues to reap the rewards of their multi-million dollar CMS contract funded by your and my tax dollars while a hard-working honest provider is slowly being squeezed and put out of business thus putting human life in danger by blocking patients’ ability to receive the care they require and cause the expenditure of limited human capital and financial resources simply out of spite.

Here is an excerpt from my initial communication to the contractor:


“In your letter, you have indicated there is “Good Cause”. “The re-opening is based on credible evidence regarding data analysis findings.” As _____________ is well aware, I have represented dozens of client cases in the past year and your letter of July __________ is a form letter that contains identical language seen in almost every client letter I have reviewed. Therefore, it is my opinion you have failed to establish “Good Cause” in this matter as this is simply another fishing expedition on the part of ___________.

Subsection 10.11 – Good Cause for Reopening (Rev. 3568, Issued: 07-29-16, Effective: 09-30-16, Implementation: 09- 30-16): a contractor may reopen an initial determination or redetermination within 4 years from the date of the initial determination or redetermination when good cause exists. Under 42 CFR 405.986, good cause exists when:

  • There is new and material evidence that was not available or known at the time of the determination or decision and may result in a different conclusion; or
  • The evidence that was considered in making the determination or decision clearly shows on its face that an obvious error was made at the time of the determination or decision.

Subsection 10.11 also goes on to state that “Third party payer error in making a primary payment determination does not constitute good cause for the purposes of reopening an initial determination or redetermination when Medicare processed the claim in accordance with the information in its system of records or on the claim form. Contractors may only reopen for third party payer error under the “within one year for any reason” standard. This is true for both contractor initiated reopenings as well as reopenings requested by a party. All providers and suppliers have a legal obligation to determine the correct primary payer when billing Medicare. Failure to do so, regardless of third party payer error, does not constitute “good cause” that will permit reopening beyond one year. Information regarding such error does not constitute “new and material evidence.”

Additionally, _________ has violated Chapter 3 of the Medicare Program Integrity Manual; specifically – Time – Frames for Submission (Rev. 628, Issued: 12-04-15, Effective: 11- 16-15, Implementation: 01-06-16). In your letter dated July 14, 2017, you indicate that our client must submit all of the documentation requested within 15 days to the address in ________, _________. However, the guidelines in Section state “UPIC shall notify providers that requested documents are to be submitted within 30 calendar days of the request.” Based upon your request of more than 30 specific items each consisting of multiple components, we are unable to comply with the 30-days afforded us under Section and therefore request an additional 30-days to gather all of the necessary information to submit. Section goes on to state that “Because there are no statutory provisions requiring that post payment review of the documentation be completed within a certain timeframe, MACs, CERT,UPICs and ZPICs have the discretion to grant extensions to providers who need more time to comply with the request.”

As part of our diligence, we are requesting pursuant to subsection 4.3 – Medical Review for Program Integrity Purposes (Rev. 675, Issued: 09-0916, Effective: 12-12-16) Section D, Quality Assurance documentation to demonstrate that each aspect of this review is being performed consistently and accurately throughout the ZPIC’s MR for PI program; specifically item #4: The UPIC shall have an objective process to assign staff to review projects, ensuring that the correct level of expertise is available. For example, situations dealing with therapy issues may include review by an appropriate therapist or use of a therapist as a consultant to develop internal guidelines. Situations with complicated or questionable medical issues, or where no policy exists, may require a physician consultant (medical director or outside consultant).

Under Section of the Medicare Program Integrity Manual, “Requires that coverage determinations be made only by RNs, LPNs or physicians, unless the task can be delegated to another licensed health care professionals. 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. 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,” which we are requesting at this point to ensure that only those proficient and holding certification/credentials and actual experience in Geriatric Psychiatry for those in Skilled Nursing Homes, Nursing Homes, and/or Domiciliary Rest Homes are reviewing our documentation.

In summary, we do not believe “Good Cause” has been established by ___________ to reopen and conduct a post payment review. However, we are going to comply with the request but ask that __________ comply with Section and grant us 30 additional days beyond the 30 we are entitled to under the aforementioned section to ensure we are able to generate all of the items requested for this review, which would put our submission of records at September ____________.

As you will notice, I have once again included Secretary Tom Price and Members of The United States Senate Committee on Finance and various members of Congress involved with healthcare oversight, requesting their intervention on what can only be perceived as a witch hunt considering ______________ is hinging their post payment review on data analysis on claims that have already been paid appropriately by The Centers for Medicare and Medicaid Services. Our client has been audited multiple times by Medicaid and Medicare with greater than 96% of his claims found to be documented and coded appropriately.

I would like to sincerely thank you in advance for your time and assistance in finding a workable resolution to this matter.


Sean M. Weiss

DoctorsManagement, LLC Partner and Vice President of Compliance

cc: Tom Price, M.D. / Secretary of Health and Human Services

The Honorable Orrin G. Hatch, Chairman, Committee on Finance,

United States Senate The Honorable Ron Wyden, Ranking Member, Committee on Finance, United States Senate Senator Cory Gardner (R-CO)

Congressman Chris Smith (R-NJ)

Congressman Mike Quigley (D-IL)



You may be wondering why I would cc: members of the Senate and House of Representatives as well as the Secretary of HHS. First, because I have access to these public officials who’s responsibility lies with their constituents and the law abiding, taxpaying citizens of this country. Second, because even the Inspector General of HHS issued a scathing report about the unethical behavior of these CMS contractors who continue to think it is the Wild, Wild West! Here is part of the report, “According to a 2015 OIG Report to Congress… “Often the ZPIC contractors have had no experience in the areas of fraud and abuse for which they should be accountable. The result is a loss to CMS of fraud and abuse funds and providers, many of which are small – medium sized businesses, are forced to spend thousands of dollars to address unfounded audits and investigations. This was evidenced when CMS lost $80 million of the $120 million paid to contractors in 2011, due to poor data when investigating fraud and abuse.” The OIG Report continued with the following: “The significant lack of oversight of ZPIC contractors, who were awarded contracts averaging $81.9 million, is evidenced by the extreme and ill-founded actions taken by some ZPICs in unwarranted efforts to show CMS a return on investment. Contractors often employed significant, aggressive, and over-zealous audits, claims reviews and investigations against legitimate, not fraudulent, providers of healthcare services. The broad brush actions cost legitimate providers huge amounts of time, money and energy – inhibiting their ability to provide care to beneficiaries. Some are forced to leave Medicare, if not health care services all together. ZPICs are large and powerful corporations with the backing of the federal government. They apply heavy handed processes in a punitive manner to many legitimate providers over minor document infractions. Further exacerbating the problems are the individuals employed by CMS to oversee these contractors, who are often young and inexperienced and do not have healthcare or fraud investigation experience.”

I could not have said it better myself…

So, where are things now with this client? Two of the most recognized and power law firms in the country are engaged on behalf of this provider and, unfortunately, CMS extended their suspension of payments for another 180-days and the OIG continues its investigation. While we are confident that our client will be made whole, in the end the reputational damage in addition to the financial damage suffered will be insurmountable. However, our client remains optimistic it will all sort out in the end and he can get back to doing what it is that he loves most!

Stay Tuned!

For audit appeal assistance or to speak with Sean regarding the establishment or updating of your compliance program email him at sweiss@drsmgmt.com or contact us by phone at 800-635-4040.

What to do next…

  1. If you need help with an audit appeal or regulatory compliance concern, contact us at (800) 635-4040 or via email at info@drsmgmt.com.
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