In a November 2016 member advisory, we discussed StrategicHealthSolutions, LLC (Strategic), the CMS Supplemental Medical Review Contractor (SMRC). The SMRC is tasked by CMS to perform a variety of tasks aimed at lowering the improper payment rates and increasing the efficiencies of the medical review functions of the Medicare and Medicaid programs. In other words, the Strategic is yet another audit contractor.

In our earlier member advisory, we indicated that the Strategic had sent letters to a number of ambulance suppliers requesting medical records for certain ambulance transports. Those letters indicated that the Strategic was tasked with performing postpayment reviews of “Part B therapy claims for providers with a high percentage of patients receiving therapy beyond the threshold as compared to their peers.”

At this point, you are probably asking what the physical therapy cap threshold has to do with claims for ambulance services. If so, you are not alone.

On behalf of the AAA, our firm contacted Strategic to request further clarification. Specifically, we asked whether the intent was to limit its review to physical therapy providers, or whether the intent was to audit ambulance suppliers. Strategic responded by indicating that it intended to limit its review to physical therapy services, and that these letters were sent to ambulance suppliers in error. To its credit, Strategic did contact the affected ambulance suppliers by telephone to notify them of its error. Strategic also sent letters to the affected ambulance suppliers formally rescinding the record request.

Score one for the good guys, right? Think again.

Over the past few days, we have been notified by numerous AAA members that they have received a letter from Strategic requesting records for certain ambulance transports. These letters indicate that these postpayment reviews are being directed by CMS, and are based on an analysis of national claims data.

The audit notification letters cite the HHS Office of the Inspector General’s 2015 report on question billing practices as the establishing “good cause” for reopening the claims being audited. That report identified 7 billing practices that the OIG considered “questionable.”  Among the OIG findings being cited by Strategic are: (1) that CMS paid $17 million during the first half of 2012 for ambulance transports to and from a physician’s office and (2) that CMS paid $30 million over that same period for transports where there existed no record of the patient receiving covered Medicare services at either the pickup or drop-off locations on that date of service.

So, having cited two examples of improper payments from the industry as a whole as the basis to audit specific ambulance providers, one would naturally expect that the claims being audited would be limited to those instances, right? Unfortunately, when CMS and its contractors are involved, it is rarely that that simple.

Instead, Strategic appears to be consistently asking for samples of 40 or so claims. While it is difficult to discern a pattern from the handful of audit letters I have seen, one point of emphasis does appear to be ALS emergency claims, which typically represent more than half the sample being requested. However, in each case, the remaining claims come from each of the various base rates. In other words, it is possible that the claims being selected are truly random.

It is premature to speculate on how these audits turn out. However, the initial misstep by Strategic does not inspire confidence.

If you receive a letter from Strategic, it is important that you respond within the time frames set forth in your letter. If you are unable to meet that deadline, I would strongly recommend that you contact Strategic to ask for an extension. Typically, the contractor will grant an extension of 30 days as a courtesy. I would also use that time to obtain supporting documentation from the hospitals and SNFs. Given the scrutiny currently being paid to the patient signature requirement, I would review each claim to ensure that the requirement has been met. To the extent you are relying upon a facility signature, I would verify that the signature is legible (or accompanied by the signer’s printed name). If it is not, I would suggest obtaining a signature attestation from the individual that signed.

Please keep in mind that the best way to avoid a potential recoupment is to convince the contractor that the claim was properly paid in the first place. Maximum effort prior to your initial response is likely to pay big dividends down the road.

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.