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From Health Law Daily, June 2, 2016

Order forms for supplies inadequate documentation of services; recoupment upheld

By Kayla R. Bryant, J.D.

A state Medicaid agency is authorized to recoup payments made for services on the basis of inadequate documentation, even without finding that the services were not actually provided. The Washington State Court of Appeals upheld the Washington Health Care Authority’s (HCA) decision to require an optometrist to repay $224,114 to the state Medicaid program after extrapolating its audit findings. The court found that order forms for glasses and contact lenses alone were not sufficient documentation to support claims for services (Bircumshaw v. State of Washington Health Care Authority, June 1, 2016, Bjorgen, T.).

Audit. The Washington Department of Social and Health Services (DSHS) conducted an audit of the optometrist’s claims submitted between June 2003 and May 2006. After auditing 25 of his highest-paying claims, it audited a representative sample of 348 claims and then extrapolated findings across 9,506 claims. The agency found that his documentation was limited and that the optometrist relied heavily on pre-printed order forms provided by the exclusive Medicaid vendor for glasses and contact lenses that do not include information about optometry services provided. After DSHS’ audit and recoupment authority was transferred to HCA, it concluded based on the audit and extrapolation that a large number of claims constituted overpayments, and ordered repayment.

Authority. The optometrist argued that the HCA could not order repayment without finding that he did not provide the services billed. The court disagreed, noting that, at the time the services were rendered, state Medicaid regulations provided that DSHS would reimburse for services that were within the scope of care, medically necessary, properly authorized, and billed according to certain rules (WAC 388-502-0100(1)(a)) This includes recordkeeping requirements, which were specified at length. The court found that the optometrist failed to submit records fully justifying billed services, which was a requirement of payment procedures and, therefore, a violation of payment regulations. This violation justified recovery of funds.

The optometrist argued that even if HCA had recoupment authority, his documentation was not inadequate. He stated that his order forms were enough to justify billing because they establish that he provided medically necessary services. The court disagreed, noting that the order forms are only proof of ordering items, and nothing more. The state agency could not rely on the order forms for proof of fitting and dispensing contact lenses and glasses, eyeglass repairs, or other procedures. The lack of documentation also caused the agency to reject billing for fittings performed too soon after previous fittings without obtaining the required prior authorization. The court believed that allowing order forms to be considered sufficient documentation would place the Medicaid program at great risk and upheld the recoupment.

The case is No. 45923-0-II.

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