• Big Win for Small Physician Group Practice Against Medicare Audit
  • May 21, 2010
  • Law Firm: Burr Forman LLP - Birmingham Office
  • This matter originated on November 1, 2006, when representatives from the Medicare Program Safeguard Contractor, AdvanceMed Corporation, presented an audit review notice to the physician group during an unannounced, on-site visit at the practice’s office in Tennessee.

    On February 26, 2008 — 483 days after AdvanceMed’s on-site visit — the physician group was notified that an extrapolated overpayment of $3,966,500.00 was being assessed against the practice based on AdvanceMed’s evaluation of the audited claims. An actual overpayment of approximately $27,000 was extrapolated to $3.96M because AdvanceMed found a “high” error rate.

    In accordance with Medicare regulations, the physician group filed an appeal asking that the Medicare Carrier undertake a Redetermination of the audit findings on the basis that the majority of AdvanceMed’s audited claim denials were improper and that AdvanceMed failed to conduct its post-payment review activities in a timely manner thereby causing the practice undue prejudice and hardship.

    On December 5, 2008 — 247 days after receiving the request for Redetermination — the Medicare Carrier issued a partially-favorable Redetermination decision, which was subsequently followed by an overpayment demand letter which reduced the original $3,966,500.00 overpayment amount to $2,508,866.60 — broken down into $2,278,630.00 in extrapolated principal and $230,236.60 in interest. However, in calculating the $230,236.60 in interest, the Medicare Carrier failed to exclude the additional 187 days it exceeded the permitted 60 day timeframe to issue its Redetermination decision.

    In accordance with Medicare regulations, the physician group filed a request for reconsideration with Q²Administrators, LLC, the assigned QIC. On April 28, 2009, the QIC rendered a “partially favorable” reconsideration decision, which was followed by a revised overpayment demand for $1,749,053.12.

    After a two day evidentiary hearing before an administrative law judge, a favorable decision was issued on September 29, 2009, finding that AdvanceMed had improperly denied most of the audited claims and that such claims were covered by the Medicare program.

    Following the conclusion of the appeal to the Advisory Board, on April 16, 2010 (approximately 3 1/2 years after the initial on-site audit) a final overpayment demand was issued to the physician group in the amount of $2,809 plus $312 in interest, for a total overpayment of $3,121. As a result, Medicare recently refunded to the physician group, without interest, close to $600,000 in payments the physician group was forced to make based on the erroneous audit findings.