Blog, Chirosecure Live Event September 6, 2022

The importance of Negotiating a Settlement in a Post-Payment Audit

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Miscoe Health Law bringing you yet another installment of ChiroSecure’s Growth Without Risk series. And today we’re gonna talk about post-payment audits, but what happens at the end, in, in most cases interestingly enough is not litigation. It’s not arbitration, although it can but in, in 90.

8% 99% of cases post payment audits that are brought forward by commercial payer against a provider are resolved in some form of settlement. Now the reason I talk about this is if there is a negotiated settlement, that’s how they usually end and that’s fine. The concern comes up and I had a case recently where The appeal resulted in a huge move in the actual overpayment amount rescission of the statistical sampling the projected portion of the overpayment leading a rather minimal payment amount.

At the end and the doc of course, was thrilled and ready to write a check and get out of this thing. Nonetheless we continued to push towards not only rejection of some of the things that remained wrong in the actual overpayment amount. We did so not because of the money, but for the value of having a new negotiated settlement at the end of the as a way of terminating or concluding the case.

Now, if the doc would’ve wrote the check certainly. The liability and the issue as it related to the specific claims that were at issue in the audit would’ve been resolved, however, it would’ve resolved nothing else. And it would have left. There was a requirement to sign a very generic corrective action plan which the doctor could have done.

But looking forward to how that might have turned out in a subsequent audit and how that would’ve been interpreted lease some question and lease some liability that you don’t want to go forward with those issues being unanswered. So in that particular case, as I would, in any case we’re gonna continue to drive towards an actual settlement amount with a settlement agreement that contains some necessary terms that, that will protect the provider going forward now.

The value of an agreement is just like your provider agreement. This is an agreement between you and the payer to resolve issues regarding this particular audit. Now the every settlement agreement there’s no admission of liability, even if you’re gonna make a payment. The non-mission of any liability by any party is critical.

If you just write the check and pay them back then there’s a presumption. That you are wrong. The beauty of a settlement agreement is we disclaim any agreement as to the accuracy of the substantive findings by the payer in the audit, there may be some stuff for purposes of settlement that we will concede subject to the federal rule of evidence 4 0 8.

Which means if we conceded in settlement, they can’t use that concession later, should this settlement not occur and we proceed to an arbitration. They can’t say, oh you conceded this. Or you conceded that. When you concede subject to the rule they cannot bring those concessions up.

Should the settlement. Negotiations fail. So one of the bonuses of a settlement agreement is it gives you the ability to negotiate in good faith, make concessions for purposes of reaching an amount that you can both agree to without ever having to admit that you actually ever did anything wrong.

And it’s, you’ve probably heard this, but a good settlement. Angers, both parties equally, meaning that neither party gets what it wants. The doctor pays more than he or she thinks she, they should, the payer gets less. Than what they think they’re entitled to. And in some cases way less and depending on the issues and the, both the legal and the substantive issues that are raised in the appeal, as well as the doctor’s attitude towards corrective action, things that you do during the pendency of the audit to, to address some of the areas of more of larger concern.

All of those things factor into the ultimate settlement amount, which we’re not here really to talk about, but it leads us to the position where we’re gonna create a new bargain, meaning we’re gonna make an agreement about what each side is gonna do. And one of the things that, that the provider’s gonna have to do is probably cut loose with some money.

And as I mentioned, it may be more than what they technically owe or that than what’s proven. It’ll be, it should be an amount that’s at least equitable under the circumstances. In most cases where there’s audits for a reason usually there’s a billing pattern or something that indicates that the provider was paid for something that, that.

Should not have been paid for. And if that is objectively true then certainly the value of those services subject to look back limitations and things of that nature are gonna come into play in terms of valuing the settlement, but we’re gonna have a defined amount. So we don’t have the uncertainty of what it’s gonna cost to get out of the issue and and there’s benefit to.

Usually it is an amount that it may sting a little bit, but the doctor can afford it. And where there’s significant liability, it usually represents the limit of what they can afford when the amount is small and the amount really isn’t at issue. That becomes a lesser concern in the settlement agreement, but we still want an agreed amount because it becomes the linchpin for some other things that we want to put in the agreement to protect the doctor.

And one of those things beyond the repayment amount is the mutual covenants, if you will. So there’s covenants regarding, non-disclosure. So the payer. Neither the payer, nor the provider can disclose the details of the settlement agreement, except potentially to like attorneys, accountants, things of that nature that are necessary for their business operations.

If it’s the blues, they may need to disclose to OPM consistent with any legal obligations, they have the disclose. You cannot shield disclosure from the government but you can. Preclude the payer from volunteering. So it would have to come based upon a demand for that information from the government.

And usually it would be from somebody like the officer personnel management who administer a federal employee health benefits act where there are Feba claims. Or Feba plans at issue. They’re certainly gonna be involved in that process and have to know about the settlement beyond confidentiality.

The big piece is mutual releases. And as I mentioned, when the amount is small and you write the check, it’s only gonna be about the claims that were in the sample of claims that they audit. It’s not gonna be about anything else. And usually a doc wants to end one of these situations with the knowledge that’s all there’s gonna be for that timeframe.

So whatever the data service range was for the audit and certainly potentially whatever codes were at issue. The doctor doesn’t want them coming back and dipping into that same bucket again. So what we draft in the agreement is what are called mutual releases. So if the doctor has any claims that are in that timeframe, the doctor is giving up any right to go collect on that.

Reprocess claims, resubmit, whatever. So the doctors boxed out of that entire period. But then, so again is the payer. So what we want to do is we want to limit our liability for any issue for the claims in a particular date range or whatever the date range was of the audit. The amount that we’re gonna settle for.

So the doctor’s giving up any unpaid claims that he or she has in that period. Similarly, the payer is giving up any claims they may have on any other issue. Now I try to write those releases somewhat broad. All claims within the date range, under the premise that the payer had the ability to look at whatever they wanted in that date range, that they chose only certain codes that, that wasn’t our that wasn’t a limitation that we imposed.

And therefore, I try to get them to agree that all claims all codes, anything within that date range is within the scope of the release. Sometimes they push back And sometimes explaining to them. Look, do you really anticipate going back there or, are you just being picky about the language and if you don’t really anticipate going back there what is it, what do you.

You’re not giving up anything. So from that perspective that becomes a very important provision. The last thing that I think is important is the corrective action be very cautious, because sometimes payers will send a document. Indicating corrective action that the provider has to agree to, when you’re paying back the money.

And sometimes it, those are not as precisely drafted as they should be. If we’re gonna submit a corrective action plan, usually we are only gonna submit corrective action for things that were actual violations of the existing agreement and, or incorporated medical policies, unfortunately in post.

Review payers have a habit of imposing requirements post Hoag, meaning after the fact in that an auditor citing the what I like to call the everybody knows statute that not everybody knows about and no one can actually find it. But their perception of what records should look. What records should have, and those things are external to the actual policy manual.

And that usually would be part of our appeal, of course pushing back that those didn’t justify over payments, even if they did, or even if they were wrong. They didn’t justify repayments cuz it’s not a condition of payment. Instead. It’s a condition of participation. Leading up to the settlement.

Those are the arguments that we make to diminish their expectation in the solidity of their position. Nonetheless, when it comes to The corrective action plan. They like to bury that stuff in there and you need to be careful for two reasons. One, the question arises does the corrective action plan operate to modify your provider agreement and or their medical policies.

And in theory, It could especially if it was perceived that way. It was written after the medical policy. It was after an audit where the policies were at issue and the payer is clarifying. You may be the only doc stuck to that interpretation of the medical policies and therefore you have to be careful of the language in a proposed corrective action plan.

To verify that it doesn’t actually modify your obligations under the contract or any incorporated medical reimbursement or coding policies. The second thing is that You wanna limit the corrective action to only the things that were actually wrong. Whether, the beauty of settlement is that we don’t agree that anything was wrong, but nonetheless giving the payer their due, for the things that we conceded for purposes of settlement, it would be appropriate to write corrective action there, but make sure that it’s something you’re actually gonna implement and do the worst thing in the world.

Because providers don’t believe this will happen, but it does. It can end. It does is that they do a settlement. They Dodge a big bullet. Mike, you’re the greatest lawyer in the world and we do this corrective action and then they don’t implement the corrective action and you try to follow up and say, Hey, let’s look at some charts and did it.

The doc’s too busy. And they think that they’ve dodged the bullet and that bullet isn’t gonna come around and smack ’em in head. And then six, eight months later than the. Actually Either pull some records randomly to validate the corrective action or they see the billing profile moving back in a direction that caused the audit in the first place.

And when you get audited the second time, and you did not implement the corrective action that you said you would that second audit and the settlement and the resolution of that second audit is not gonna go as well as the first. So be mindful of that that you. Assistance drafting that making sure you understand what you’re obligated to do, and you actually diligently implement that stuff going forward.

So that you don’t run into that scenario. But for reasons of. Mutual releases, confidentiality and control over the corrective action plan. You should always seek to resolve any post payment issue where they’ve audited charts. And they’re asking for money back with a settlement agreement, to the extent that you don’t.

You’re not forced into arbitration or something like that. And then the arbitrators, or if it’s into court that the court’s gonna handle it and it’s gonna be a right or wrong issue. But for cases that resolve or the amount goes down to something you think it’s just easier to write, to check.

Think twice because yes, it may be easier to write the check, but you may not have the protection that you want on the backside of that. So therefore sometimes, and I don’t say this in, out of self-interest in that, it gives me more to do cuz I don’t need anymore to do. But, and most attorneys don’t either.

But it’s really out of a desire to get that agreement in place. So that you’re protected going. I hope that’s helpful next week. Dr. Sam Collins is gonna be up talking about some fascinating stuff. I am sure. And until I see you next time, everybody have a great rest of your day.