March 22, 2018
Recently, my team has experienced a wave of audit defense cases crashing through our door. Our clients are numerous private, specialty practices across the country that believed they were honoring our veterans and sharing their talents by agreeing to participate in one of the U.S. Department of Veterans Affairs (VA) Veterans Choice Programs a number of years ago. Although some facts vary between each practice, the universal elements are that these practices were approached by the VA with a request to treat veterans that needed specialty services (e.g. cancer treatment) that the local VA facilities were unable to provide. The programs presented by the VA were simple: (a) the practices did not have to be formally contracted as a VA provider; (b) the VA would send the practice preauthorized courses of treatment; (c) the practices would complete the services and send evidence of the same; and (d) the practices would bill the VA to be reimbursed for the services and expenses incurred. One significant error was made by the VA – a fee schedule was never presented to the practices prior to participating. The practices simply billed their customary rates for services with the industry standard expectation to be reimbursed at whatever rate the VA determined was allowable under the program.
Here's the point of real concern – for the past six years, the VA paid these practices industry standard amounts for services, despite the fact that, within the last couple of years, the VA notified newly joining participants that they would only be reimbursed at Medicare rates. Furthermore, it appears that the VA continued to pay practices more than the program allowed without giving notice of the error for several years.
Now, the VA has hired CGI Federal to audit all participating practices and recoup the difference between the Medicare rates and what was paid. As one can imagine, this has resulted in tremendous financial burden on the private, specialty practices that serviced veterans. Almost every practice caught in the path of the CGI steamroller is staffed exceptional providers who have defied the odds. They’ve built and maintained an independent practice, oftentimes holding multiple board certifications in order to maintain their specialty, and provide high quality care to their patients. CGI is a multi-million dollar, contracted auditing company that is paid based on the volume of work performed (how many problems they can find) and the amount of money they recover for the program (irrespective of who the recovery impacts), that won the contract because they were the lowest cost bidder (how hard they can pressure their own people into generating federally-backed debts against these providers).
In CGI’s audit process, they never ask if the services were clinically appropriate for the diagnoses, in accordance with VA medical guidelines, or about the beneficial impact of the care provided to the patients. CGI just wants the money back, whether the services cost more to provide than Medicare would have paid or not. The hard reality is that the six years’ worth of reimbursements paid by the VA have long been distributed downstream to pay for midlevels, administrative staff, office space, medications and mortgages. For most of my clients currently caught in this audit, CGI is asking for at least 50% of what the VA paid over the past five to six years, with some alleged overpayments climbing into the millions (more than all net profits on the services provided). To make matters worse, CGI is splitting out and denying claims individually, which makes it an administrative impossibility for the practices to keep up with the appeals process.
Here’s what we’re doing to stop this steamroller, which has worked well in the past. Currently, numerous practices across the country caught in this mess are agreeing to be part of a joint representation that is seeking to have the VA halt CGI. As we are working with individual practices to batch appeals and streamline the process to stop recoupment and ensure no rights are lost due to failure to exhaust administrative remedies in the appeal process, the joint representation is pushing for a collaborative solution, specifically, a solution that is outside the arduous appeals process that often takes years to provide a just remedy. We are working with many practices’ local counsel, as well as directly representing many others. When handling matters like this in the past, the combined force of numbers has led to our greatest success. I invite all practices caught in this audit to reach out and join us in the fight to sustain these necessary services for our veterans and protect the providers who have been unknowingly trapped.
Stephen Bittinger, Esq. is a Member of Nexsen Pruet based in Charleston, South Carolina. Stephen is admitted in North Carolina, Ohio and the District of Columbia. He is not licensed to practice law in South Carolina. Stephen has a unique, national practice in health care reimbursement defense and litigation