Looking for the silver linings

Wednesday, December 31, 2003

WASHINGTON -  While the new Medicare Prescription Drug Act contains plenty of reimbursement cuts, it is not without a few silver linings for DME providers.

The bill’s good news comes in the form of new provisions for appeals and overpayments, said Tim Webster, a healthcare attorney with Brown & Fortunato in Amarillo, Texas.

1. The law limits extrapolation. It says the DMERCs can’t use extrapolation to determine the amount of an overpayment unless: (i)There is a sustained or high level of payment error; or (ii) They have already tried educational efforts with the provider and it hasn’t worked. In the past, as long as the DMERC officials performed a statistically valid random sample of claims - typically, a small number of claims, usually 30 - they could extrapolate to their heart’s content. On the downside, providers can’t appeal a decision that there has been a sustained or high level of payment error. That decision is final.

2. When a carrier conducts an audit, it must give a fuller explanation of the findings then in the past. That’s good because frequently the DMERCs provide only cryptic explanations of why claims have been denied. That makes the denial difficult to appeal, Webster said.

3. If an overpayment is more than 10% of what Medicare has paid the provider in the previous calendar year, that automatically qualifies as financial hardship. In that case, the provider can get an extended repayment plan of six months and possibly up to three years. In the past, providers could request an extended repayment plan, but the carrier was not required to grant it.