A Medicare Contractor Advocating Medicare Fraud?

I know you are wondering, so I am happy to report that I just went a whole week without watching a webinar. But luckily, I have many friends out there who share their stories with me, so I do have someone else to critique this week.

This time it is one of the Medicare Administrative Contractors (MACs), with a story shared with me by Kim. For those who may be new to this work, the MACs are the ones who process claims for Medicare and recoup money when a denial is processed. They also perform claim audits and educate providers on rules. If you are not subscribed to your MAC’s web mailing list, you should be.

Here is the story.

A very elderly patient was brought to the hospital in late 2023 by family for progressive weakness and falls. She was living in the independent part of a facility that offered all levels of care, from assisted living to long-term care to Medicare-certified skilled care.

She was receiving Medicare-covered home care services in her apartment. The ED evaluation was, as is often the case, negative. But, as is often done, the patient was placed in outpatient status with observation services in order to monitor her, rule out an infection or other acute issue, and to arrange safe discharge. When the facility agreed to accept her to the nursing-home part of the facility as self-pay, the family pushed back, as is often the case. The physician let her stay an additional day as outpatient, but then she was discharged to the nursing home. Her total stay was five days.

Months later, the daughter filed a formal appeal with Medicare, stating that her mother should have had her nursing home care covered by Medicare. The MAC for that jurisdiction reviewed the appeal and notified the daughter that the appeal was denied because the hospital filed an outpatient claim, and her mother was never admitted to the hospital as inpatient. That was, of course, correct. Without a qualifying inpatient admission of three or more consecutive days, Part A Skilled Nursing Facility (SNF) coverage is not available.

And then things got strange. The MAC then stated, “you will need to contact the hospital to see if they will change the claim from an observation to an inpatient stay and resubmit it.” What? They are not asking the daughter to check with the hospital to confirm that the correct status was billed; they are asking the daughter to request that the hospital submit a false claim.

Now, lest you wonder, if the patient had been admitted as inpatient and then had their status changed to outpatient via the Condition Code 44 process, then they would be able to use the new retrospective appeal process for certain Medicare patients, since her stay was over three midnights – but she was never an inpatient, and hence, there are no formal appeal rights.

To make this appeal decision worse, the MAC also brought up the fact that the patient was receiving home care services prior to hospitalization. But once again, their comment made no sense. The MAC stated, “the appeal was also denied because at the time of her hospital visit, she was still in a home care facility.” Yes, those are their exact words – “a home care facility.” What is that?

Now, I know Medicare regulations are complex, but these contractors are well-paid to be the experts. Just last week, the Centers for Medicare & Medicaid Services (CMS) cancelled most pending Open Door Forums. And as we may be losing our ability to ask questions and pose comments on new rules, we will need to trust these contactors more for accurate information. Let’s hope they can do better.

Programming note: Listen live every Monday morning when Dr. Ronald Hirsch does his Monday Rounds on Monitor Mondays with Chuck Buck, 10 Eastern and sponsored by R1-Physician Advisory Services