Mass. provider wins: Must pay $14,000 not $247,000

Friday, January 31, 2003

SANDWICH, Mass. - It cost Mark Sheehan roughly $80,000 to fight and successfully refute a charge that he owed Medicaid $247,000 due to faulty billing practices. And if the owner of Cape Medical Supply had to do it all over again, he would.

“It was worth every penny,” Sheehan said. “I wouldn’t have been able to sleep at night if I’d walked away. They were blatantly wrong.”

In December, State Division of Medical Assistance Commissioner Wendy Warring signed off on a review board’s findings that Cape Medical overbilled Medicaid $1,580 - not $21,000. (HME News 5/2002). Extrapolated out, that means Cape owes the state $14,220 - not $247,000.

But even in victory, Sheehan had to fight. It took Warring nine months to concur with the review board’s decision. And once she did sign off, as the commissioner usually does on review board recommendations, Medicaid said Cape Medical owed $6,104 on top of the $20,343 that it had already recouped.

“The state’s attorney said there had been a change in the formula used in the extrapolation,” Sheehan said. “I went through the roof. I said, ‘You guys got to be kidding me. Get out of here.’”

Medicaid apparently got the message.

On Dec. 24, Sheehan received a letter from Medicaid stating that the department would “release” $6,104 to Cape Medical.

Cape Medical’s fight with Medicaid goes back several years. Based on a random audit of 25 of Cape Medical’s Medicaid claims between Sept. 1, 1998, and Aug. 31, 1999, auditors said the company collected $21,000 in overpayments and extrapolated that out to $247,000. Sheehan refuted all the charges but one. In that instance, the patient had died and Cape couldn’t collect retroactively the necessary signature on the delivery ticket, Sheehan said.

The $80,000 Sheehan spent fighting the charges includes $45,000 in legal expenses, the $14,220 overpayment and staff time spent gathering the necessary paperwork.

So now it’s over, or at least “I think so,” Sheehan said. “I haven’t got the check yet.”

And what did he learn?

“They audit everyone and go about it the same way,” Sheehan said. “They start with a big number, scare you and try to get a settlement. But if you fight them, you win.” HME