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From Health Law Daily, July 30, 2015

Court says Medicare determination of chiropractic overpayment was out of alignment

By Bryant Storm, J.D.

A district court granted judgment in favor of a chiropractor challenging an HHS determination that the chiropractor owed Medicare $575,000 due to improper documentation. The court reasoned that the Medicare Appeals Council (Council) improperly interpreted Local Coverage Determination (LCD) requirements as applied to the chiropractor’s services. As a result, the Council may have improperly denied reimbursement for some of the claims in dispute and the court remanded the case back to the Council for further consideration (Albert v. Burwell, July 24, 2015, Block, F.).

Reimbursement. Medicare covers chiropractic services under Part B when the treatment is reasonable and necessary. Additionally, under 42 C.F.R. Sec. 411.15 and Sec. 410.21(b)(1), coverage for those services is limited to treatment of the spine by manual manipulation to correct certain structural misalignments of the joints. To actually obtain reimbursement, chiropractic providers must furnish adequate information to allow a determination of the amount due. A chiropractor’s documentation obligations are determined by the Medicare Benefit Policy Manual and LCDs for Chiropractor Services. Part B reimbursement is administered by Medicare Administrative Contractors (MACs). Although MACs typically authorize immediate payment of claims, post payment audits by MACs and independent auditors can lead to payment recoupment if irregularities are discovered.

Audit. Warren Albert is a licensed chiropractor who provided chiropractic treatment to elderly patients in nursing homes around the New York metropolitan area. In 2010, an independent Medicare auditor, SafeGuard Services (SGS) conducted a review of Albert’s records related to 57 patients, representing 1,233 claims, arising from services provided between 2007 and 2009. For 21 of the patients, Albert had used a fill-in-the-blank form which limited his ability to indicate information regarding a patient’s history, condition, and treatment plan. For the remaining 36 patients, Albert used narrative paragraphs to account for such information. In 2011, SGS notified that all of the 57 reviewed claims were denied. SGS concluded that, as a result, Albert was overpaid and owed Medicare $578,107.91. Albert sought a redetermination by SGS and reconsideration by a Qualified Independent Contractor (QIC). Both SGS and the QIC affirmed the overpayment finding.

ALJ. Albert then appealed the decision to an Administrative Law Judge (ALJ). The ALJ determined that Albert was entitled to Medicare reimbursement for only a small portion of the 1,233 claims. The ALJ reasoned that while the narrative paragraphs satisfied the documentation requirements, the fill-in-the-blank forms were inadequate for initial visits because they left out information regarding patient history, descriptions of a physical exam, and information regarding a treatment plan. The ALJ found that the documentation was “substantially compliant” for subsequent visits, and that Albert was not required to maintain strict adherence to the LCDs for chiropractic services because it “would be against good consciousness [sic] and equity.” CMS then referred the ALJ’s decision to the Council, asserting that the ALJ erred by applying a “substantial compliance” standard regarding the LCDs because the LCDs were specific in their requirements for information regarding things like an eight-part medical history. Additionally, CMS argued that the LCD holding was inappropriate because the issue was a question of law, not good conscience or equity.

Council. The Council agreed with CMS and denied reimbursement for each of the 1,233 claims. The Council explained that the LCDs were explicit and consistent with the limited availability of Medicare coverage limitations for chiropractic services. Additionally, the narrative paragraphs were deemed to be insufficient documentation for their failure to satisfy the eight-part history required by the LCDs. The Council noted other documentation faults with the narrative paragraphs, including failures to identify the precise level of structural misalignment or the expectation of objective clinical improvement.

District Court. On appeal before a federal court, Albert conceded that the fill-in-the-blank forms were insufficient documentation for the 21 initial visits, which were therefore not reimbursable. However, Albert asserted that the rest of the claims were reimbursable and that the Council impermissibly applied the LCDs retroactively and improperly interpreted the LCDs. The court disagreed with the retroactivity argument, explaining that, while the LCDs went into effect in 2008, they merely restated requirements that had been in effect since 2003. Regarding the Council’s interpretation of the LCD, the court reasoned that even under a deferential standard of review, the Council’s interpretation of the LCDs—specifically the LCD’s medical history requirement—was unpersuasive.

Medical history. The court explained that while the LCDs stated that initial and subsequent visits “must include” a patient’ medical history. The LCDs only stated that the medical history “should include” the eight factors that the Council found to be missing. The court criticized the Council’s failure to see the difference between “must” and “should.” Accordingly the court held that it was error to render Albert’s documentation inadequate due to his failure to conclude aspects of the eight-part medical history that were not mandatory. Additionally, the court noted that Albert’s documentation consistently included several of the eight-factor history requirements.

Remand. In other words, the Council was “wrong to reject claims simply for failure to include all eight elements, without considering whether the elements he did submit, when read in conjunction with the remainder of his treatment notes, fully supported the medical necessity for chiropractic services.” The court reasoned that the Council’s error on the medical history issue likely effected the disposition of Albert’s appeal. The court remanded the case so that the Council could again consider whether Albert’s services were reimbursable in light of a correct interpretation of the relevant documentation guidelines.

The case is No. 1:13-cv-04542-FB-RML.

Attorneys: Jason His (Garfunkel Wild PC) for Warren Albert, DC and NY Chiropractic Care, PC. Kathleen Anne Mahoney, U.S. Attorneys Office, for Sylvia Burwell and U.S. Department of Health and Human Services.

Companies: SafeGuard Services; NY Chiropractic Care, PC; U.S. Department of Health and Human Services

MainStory: TopStory PaymentNews AuditNews PartBNews MedicareContractorNews BillingNews CMSNews NewYorkNews

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