RAC Defenses in the SSA

Worried businessman

Three provider defenses reside within the SSA.

To defend against Recovery Audit Contractor (RAC), Medicare Administrative Contractor (MAC), or Targeted Probe-and-Educate (TPE) audits, we always fight claim by claim. We show that the clinical records support the service billed, despite what an auditor says. But there are other, more broad defenses that apply to providers found in the Social Security Act (SSA), even if the clinical arguments are weak.

Within the SSA, we have three strong provider defenses:

  1. Waiver of liability;
  2. Providers without fault; and
  3. Treating physician rule.

The “waiver of liability” defense provides that even if payment for claims is deemed not reasonable and necessary, payment may be rendered if the provider did not know and could not have been reasonably expected to know that payment would not be made. SSA, § 1879(a); 42 U.S.C. §1395pp; see also Medicare Claims Processing Manual (CMS-Pub. 100-04), Chapter 30, §20. =

Section 1870 of the SSA states that payment will be made to a provider if the provider was without “fault” with regard to the billing and accepting payment for disputed services. As a general rule, a provider would be considered without fault if it exercised reasonable care in billing for and accepting payment; i.e., the provider complied with all pertinent regulations, made full disclosure of all material facts, and on the basis of the information available, had a reasonable basis for assuming that the payment was correct. Here, there is no allegation of fraud; medically necessary services were rendered. The doctors performed a medically necessary service and should be paid for the service, despite nominal documentation nitpicking. The SSA does not require Medicare documents to be perfect; there is no requirement of documentation to be error-free.

It is well-settled law that the treating physician’s medical judgment as to the medical necessity of the services provided should prevail, absent substantial contradictory evidence. This means that the doctor who actually physically or virtually treated the consumer has a better vantage point than any desk review audit. Therefore, substantial deference should be given to the treating physician. This is especially important in proving medical necessity.

Lastly, even though this is not in the SSA, question the expertise of your auditors. If you are an MD and provide bariatric services, the auditor should be similarly qualified.

Programming Note:

Listen to Knicole Emanuel’s live RAC Report every Monday on Monitor Mondays, 10 Eastern.

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Knicole C. Emanuel Esq.

For more than 20 years, Knicole has maintained a health care litigation practice, concentrating on Medicare and Medicaid litigation, health care regulatory compliance, administrative law and regulatory law. Knicole has tried over 2,000 administrative cases in over 30 states and has appeared before multiple states’ medical boards. She has successfully obtained federal injunctions in numerous states, which allowed health care providers to remain in business despite the state or federal laws allegations of health care fraud, abhorrent billings, and data mining. Across the country, Knicole frequently lectures on health care law, the impact of the Affordable Care Act and regulatory compliance for providers, including physicians, home health and hospice, dentists, chiropractors, hospitals and durable medical equipment providers. Knicole is partner at Nelson Mullins and a member of the RACmonitor editorial board and a popular panelist on Monitor Monday.

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