Conducting Successful Appeals: Six Steps to Success

The Centers for Medicare and Medicaid Services in cooperation with the DOJ and OIG have made reducing the amount of wasteful spending a number one priority. Through the Program Safeguard Contractors, RACs, ZPICs, MICS, and other government contractors, audits and investigations are at an all time high. What can you do to Cover Your Assets? How does a compliance program play into minimizing exposure and what steps should be taken when "The Letter" arrives?

There is a difference between Fraud and Abuse.

Medicare Fraud: The word "misrepresentation" defines Medicare fraud in terms of how a fraudulent practice is carried out. In one form or another, a misrepresentation of services provided, the patient treated or the number of services provided defines the actual billing activity. Medicare fraud most often takes the form of false claims filed by healthcare providers and insurance companies. False claims can involve billing for services that were never rendered, for people using false identities, or for unnecessary services. Medicare fraud also occurs in cases where a criminal obtains a Medicare number from a living or deceased person and bills for services using the stolen number.

Medicare Abuse: Medicare abuse practices occur when providers bill for unnecessary treatments or supplies. This can appear as an unusually large number of laboratory tests done by a provider or within a certain population group. Doctors in particular follow certain procedural standards that dictate when a particular test or treatment is needed. In effect, practitioners who abuse Medicare violate these standards of practice. Medicare abuse can also occur when providers accept kickbacks for recommending certain medications or treatments. As a result, providers are encouraged to recommend certain treatments and products to patients.

Over the past month we have received no less than 25 clients in different specialties and from different regions reaching out to us regarding the receipt of a letter from Program Safeguard Contractors and Recovery Audit Contractors informing practices they had been identified as a practice with an aberrant coding pattern compared to their peers within their region and specialty. Some of the providers were identified as billing more than 1,300 levels of specific Evaluation and Management Services more than their peers. The RACS continue to use their "Data Mining" process to notify practices of their over-utilization of services or inappropriate billing of services.

So, what is a practice to do with all of these threats looming? Not to mention the fact that you are still fighting to get paid appropriately for the services you provide your patients, the beneficiaries of these insurance payors. Here is the good news... Take a deep breath, hold it, and now exhale.

With more than 18 years of helping clients through these types of situations with a 98 percent success rate, I am going to be your personal coach on how to stand up to the insurance companies and prevent them from taking advantage of your practice and scaring you into making large refunds. The process is not easy and it is going to require you to really put in the effort, but if you do, I assure you, you will come out on top every time. Consider this your new audit appeal play book!

Step 1: The dreaded letter is received: This is the day all providers and practice managers dread. However, it is no longer a matter of if you get audited, it's a matter of when. When the letter is received, make sure a copy is provided to the physician(s), the compliance officer, and the business office manager. If you have legal counsel, make sure a letter gets to them as well. If you are working with a consulting firm, send a copy to them. Once all parties involved have had a chance to review the letter and discuss a plan of action, a letter should be drafted back to the requesting agency informing them that you are in receipt of the letter. This letter should specify that the organization is going to comply with the requests made by the agency but the requested timeframe to respond is not reasonable and as such, an extension for an additional 90 days is being requested. This gives the practice time to conduct an independent review of the dates of services documentation requested to identify any deficiencies or issues prior to sending for the review by the agency.

In most cases, the first letter you will receive only alerts you to the fact that they are going to be taking a closer look or that after a closer look there has been a determination of an overpayment situation and then future correspondence will follow. If issues are identified, keep in mind that you cannot fudge the original record but addendums can be made to add clarity or more insight to the original documentation. Remember, the addendum must be dated for the date it is made. The thing that I have found that bothers me about most addendums made is that the original note is so bare with information and then a year later when the addendum is made, it is pages of information. That is not considered reasonable and it is the fastest way to alert the reviewer that something is not right. Addendums can be made to allow for a provider to attest to services provided or to add more specifics to a particular portion of the original note and that is really it. The addendum should not be the actual note.

Step 2: Copying the Records: This is a vital part of the process for it is here an audit can either be won or lost. My late brother always used to tell me, "Give them everything they ask for and nothing they dont." We never want to give them something they can use against us. Keep in mind that a request for documentation for Evaluation and Management Services isnt always just for the E/M as there are usually other things that take place during the course of the encounter that for one reason or another the provider fails to document. These can include: Diagnostic Services, Therapeutic Services, Minor Procedures, Labs, etc. Make sure to comb through the patients chart and send all supporting documentation that would help the reviewer understand how the provider landed on the level of service selected. Keep in mind that we send the supporting documentation more often than not as something was ordered is not easily inferred and requires a further explanation.

When you are making the copies of the records, you want to make multiple copies. One should go to the consultant working on the independent review, one to your legal counsel, one to the requesting agency, and then one for the practice to keep on hand for internal discussions with the consultant or the attorney.

Step 3: The Results are In: More often than not, audits do not go the way of the provider. There is a simple explanation for this& The majority of reviewers at the payors are non-clinicians or if they are clinicians they are not always familiar with the actual specialty they are auditing, which leads them to make assumptions they should not. Keep in mind that insurance companies are in the business of making money for their share holders. They have something you want (money), you have something they need (services), but when they feel funds are getting a bit low or they have to trim some of the fat, they turn to their revenue generating departments such as the special investigative units to go out and stir the pot and see what they can uncover. Its unethical at best but it is how they conduct business more often than not. I know there are payors out there who will read this article and take offense to it but as my grandfather taught me, "Those who take offense to the truth are usually hiding something," and with my background of working with and against some of the biggest payors over the years, I could not agree more with my grandfather.

The good news is this: If the audit does not go your way, there are steps to appeal the findings. Typically, the lower levels of appeals will favor the payor. It is not until you start reaching the Medical Director Level Appeals or for The CMS Administrative Law Judge Hearings where things actually begin to go the way of the providers. Appeals can get costly but more often than not, the costs associated with fighting are significantly lower than what the request for refund is and then there is also the principle of the matter. One thing to keep in mind is this: The more you appeal your claims, the less likely they are to harass you in the future.

Step 4: The Appeal: Depending on whether this appeal is made to CMS, ZPICs, RACs, CERT, or commercial payors will determine the number of levels to the appeal, the forms required for filing, and the amounts in dispute required for reaching each level. For example, if it is a ZPIC, there are 7 levels for an appeal, with RACs they follow CMS appeal guidelines, but there are some special conditions such as when you have to make the refund, the open discussion period, or other quirky little items. CMS has 5 levels of appeal and each one has a certain dollar threshold required to be able to take it to the next level of appeal. There is also the ability to file for expedited appeals if the appellant feels its necessary to file for.

There are great resources available all over the World Wide Web. You can always begin with and search for CMS appeals process.

When preparing for the various levels of appeal for CMS as an example (e.g. Administrative Law Judge/ALJ), understand that you have to submit the documentation (evidence for review) in advance or it will not be considered at the time of the hearing. As I tell my clients, the devil is in the details. Make sure you understand what the requirements are for each level and do not try to "wing-it" as I have had clients in the past tell me they were going to do because they were just too busy to deal with this matter.

If the results of your appeal are not to your liking, remember you have multiple levels to which you can appeal; the thing to keep in mind is this: With each level, the requirements become more stringent and your timelines to file get shorter. There is a high-level of complexity as well as an art to handling appeals and the more you do, the more you pick-up and can use at the next appeal.

Step 5: Provider Behavior: Remember, attitude is everything at an appeal, especially when you are either in front of the ALJ, MAC, or in Federal Court. The last thing you want to do is to be insulting or disrespectful. Most of the appeals a provider can make do not require an attorney and lots of times having an attorney can make the case more difficult for the judge to follow. This is why most attorneys turn their hearings for ALJs over to a consultant such as me. Because I understand the law as it was what my formal training was in, and I also come from a clinical background, I am able to take medical and legal jargon and put it into layman terms so that anyone hearing the case can understand. So, my advice here is to use the KISS principle when presenting facts and evidence during a hearing to ensure the person hearing your appeal or reviewing it if it is a written appeal can easily understand your point. Use the "more is less" principle when making appeals. Keep the emotion out of it and concentrate on the facts.

Step 6: The Final Verdict: At the end of the day, all you can do is your best. If you have exhausted all of your avenues for the appeal and you have not found a resolution to your liking, youll at some point have to accept the outcome as much as it might hurt to do so. No one wins every argument but having the tools and some experience under your belt allows you to find those little tricks to keep you ahead of the competition or in your case, the payor you are appealing to.

If an appeal is not successful, you still have options which include negotiating a settlement with the payor. I often have clients ask me where I begin my negotiations with a payor and my response is, "It depends on what the overpayment was based on and how much money is involved." There is no one right process for all appeals; sometimes it is a combination of techniques. It is always my goal to ensure my clients pay back nothing if that is possible and in a worst case scenario, we negotiate to 10 cents on the dollar.

Using the tips and techniques provided throughout should help to make the process a bit easier for you. As always, should you have questions or concerns or require assistance above and beyond what is in this document, feel free to contact me.

Sean M. Weiss is Vice President and Chief Compliance Officer for DoctorsManagement, LLC, a full-scale medical consultancy. As a practice management consultant, Sean specializes in the formation of medical practices, merger and acquisitions, divestitures, exit strategy planning, strategic planning (S.W.O.T.), and workflow analysis. Sean is used by clients across the country as a turn-around expert based on his proven track record of success in the industry during the past 18 years. Sean has a significant background and heavy concentration in audit and appeal representation for large and small healthcare practices that have been targeted by federal (Medicare), state (Medicaid), and commercial insurance payors. Sean delivers measurable financial results for healthcare facilities and helps physicians deliver quality care without sacrificing government compliance. You can contact Sean at or 800-635-4040.