This transcript has been auto generated
00;00;00;00 - 00;00;23;02
Meg Pekarske
Hello and welcome to Hospice Insights: The Law and Beyond where we connect you to what matters in the ever-changing world of hospice and palliative care. Audit Updates: David Beats Goliath. Bryan and Emily. I'm so happy to be here.
Emily Solum
We're happy to be here with you.
00;00;23;03 - 00;00;24;12
Bryan Nowicki
Yeah, nice to be here. Of course.
00;00;24;13 - 00;00;54;01
Meg Pekarske
Well, I know when we were prepping Emily's like what is there to talk about? And it's like, I feel like. Yes. How many podcasts have we done on this? And for trivia for our listeners our very first podcast we did, it was February 26th, 2019, was extrapolation is back. And then we probably did 3 or 4 podcasts since then on extrapolation.
00;00;54;01 - 00;01;21;16
Meg Pekarske
But it's the big dollars that everyone's scared about. And I mean, not to bury the lead, but we have had, you know, historic is success and then just had some pretty gigantic wins, for folks. And so I think what we wanted to cover here is both these victories and sort of the CliffsNotes version of how we won those.
00;01;21;19 - 00;01;45;04
Meg Pekarske
And then also talk about some things we're seeing and home health and extrapolation on that front, and then just experience we've had on managed care audits because, you know, extrapolation can happen there and how that might impact hospice and home health providers. So we got a media agenda. Of course, we always say we will only take 15 minutes.
00;01;45;04 - 00;02;10;22
Meg Pekarske
So let's see if that actually works. But but Bryan, just for a brief historical context, we've been at this a long time and, great success early on, I guess. Take me back in the time machine here and is is it different than it was before we went in in different ways? Like, what does the past teach us about where we are now?
00;02;10;24 - 00;02;54;25
Bryan Nowicki
Yeah, and thinking about that title from February 2019, at that time it was extrapolation is back and it we had that was the title because years before that we had first encountered extrapolations and really had great success in overcoming that and just kind of giving people the context. Extrapolation is when an auditor might take 30 claims out of a two year period randomly selected, they'll say what your error rate is after reviewing those claims, let's say it's 30%, and they'll say from that, sample of 30 claims, we think 30% of all the thousands and thousands of claims you submitted during that two year period were also an error.
00;02;54;27 - 00;03;17;20
Bryan Nowicki
So all the although those 30 claims might be worth 100,000 or so, they'll turn that into 7 million, 20 million, 40 million or more. So it really is an eye opener. And we still get questions to this day from concerned providers. Is this audit that I have now going to lead to extrapolation? So we beat them back a while ago.
00;03;17;20 - 00;03;42;21
Bryan Nowicki
They reemerged in February 2019. And, and they're continuing to this day. And it seems like they're coming up with different strategies. I think they, they, they anticipate some of our arguments, but they also make different kinds of errors. And our strategies have evolved as well into how to push back against these extrapolations. And there's always been two ways to try to go at these.
00;03;42;21 - 00;04;10;23
Bryan Nowicki
One is try to attack that underlying error rate by appealing those individual claims. Let's win each one of the claims, get that error rate down, and hopefully you get it down to zero or so low that the science of statistics just doesn't work. Method number two is let's attack that statistical methodology where you have to hire a statistician or over the statistical data and find flaws in the system.
00;04;10;23 - 00;04;45;05
Bryan Nowicki
Did they include, claims in the universe that should have been excluded and bias the universe? Did they, lack the certain precision that some courts have said is is minimally required? So still, adopting those two approaches. But but since that first podcast, we've seen the you the you picks the OIG and as our clients have, have grown and as we've been involved in other areas, home health, clients of ours, have been getting, extrapolated audits.
00;04;45;07 - 00;04;50;21
Bryan Nowicki
Emily, you've had experience with managed care organizations and extrapolations, right?
00;04;50;23 - 00;05;20;07
Meg Pekarske
Yeah. Well, just just, I was working on the transition. Bryan, you got to trust me. I bet that's for for six years now. So, so before we get to managed care, though, I want to shift to you, Emily, because I think as we navigate clients through these issues, which we have oodles of experience on, I think I always try to be that steady hand.
00;05;20;07 - 00;05;46;01
Meg Pekarske
And I think the number one thing I try to remind people is the beginning is not the end. And there's a lot of twists and turns, but like the beginning, you're going to you could have this giant number, but that's not where we're going to end up at the end of the day. And I think, you know, a case you were really heavily involved in is just one of those.
00;05;46;01 - 00;05;57;23
Meg Pekarske
And it might be our our largest victory to date. But but walk me through that case and sort of where did it begin and then where did it end.
00;05;57;26 - 00;06;27;05
Emily Solum
Sure. So that case began back in 2021. And so now we're in 2025. And we just we just got the results of that. The beginning definitely wasn't the end. Of course, it's always very stressful for the time period that you're dealing with it, but once you get to that end, it can be a huge relief, at least when when we're involved, you know, that particular audit involved a higher level of hospice care, not your routine home care.
00;06;27;07 - 00;06;50;26
Emily Solum
And a lot of the claim denials that we originally saw were just sort of shocking. You wouldn't believe that anybody would think that these patients weren't eligible for that higher level of care. But you do start questioning your yourself when you see so many of those claim denials. But we stuck with it. We got some experts to evaluate the records, actually multiple experts.
00;06;50;28 - 00;07;23;27
Emily Solum
And, they all felt confident that many of those claims were appropriate. There were, of course, some claims that were conceded or not challenged like the rest of them. And so it's important to go into that process with, unbiased eyes and really put all your efforts towards the stronger claim denials. And when you do that and you work hard at it, you can overturn those claim denials that make up the error rate that Bryan was just talking about.
00;07;23;29 - 00;07;49;21
Emily Solum
And yeah, and that is the for this type of audit and this type of overpayment that is your best chance that getting a full victory because, we can chat about this for a long time, but Bryan and I will tell you that you do need to challenge the statistical process, the statistical sampling process and the way that that, is done.
00;07;49;23 - 00;08;04;29
Emily Solum
But any time there is a victory on that front, it ends up being an appealed decision and and dragged on for much longer. So, yeah, quite a lot of effort into challenging those individual claim denials.
00;08;05;02 - 00;08;33;26
Meg Pekarske
And I think that, the case that we're talking about, I remember reading those decisions and the initial decisions that we got, and I was like, I don't think it would be malpractice for a physician to practice medicine in the way that these claim denials were like the medical judgment, so to speak. That was reflected in those claim denials.
00;08;33;29 - 00;08;43;12
Meg Pekarske
And it was just pretty much blew my mind. Like if if not GP, then what? I mean.
00;08;43;15 - 00;08;55;18
Emily Solum
Yeah, they were textbook. They were textbook example. Straight out of the Medicare guidance. The examples that are in the, the materials, these patients fit the bill.
00;08;55;21 - 00;09;20;23
Meg Pekarske
Yeah. Like you're transitioning from the hospital potentially you'd like as a step down or, you know, you you tried all the stuff in the home and then, you know, it just you can't manage the symptoms. And so I mean, this isn't like 15 years ago where, you know, if people are like, wow, we're educating the family for three weeks or something or whatever.
00;09;20;23 - 00;09;40;24
Meg Pekarske
I mean, it's not that kind of stuff. So it was it was very disconcerting. And so this was whatever, how do you count that many? It was like nine figures. Is that. And then we got it down to a single. I mean, it was a huge, potential liability.
00;09;40;24 - 00;09;47;11
Emily Solum
So yeah, it went from, nine figures down to, $9.
00;09;47;14 - 00;10;16;19
Meg Pekarske
That's such a great, great happen. Well, you should just have we should rewrite the title for this, you know, nine, whatever that is. Nine, nine, nine. I can't even say it. There's so many, you know, comments there. But, yeah, significant. Significant. And so, you know, lots of experts involved in that because and it's not as though we're second guessing your own physicians.
00;10;16;19 - 00;10;55;16
Meg Pekarske
But I think having, the object, you know, objective view of an expert physician and then was obviously really helpful that multiple physicians are testifying and, you know, and there was a lot of hand-wringing throughout this whole process. And I think the challenge, too, is we're still getting all of this movement, mostly at ALJ. And so you have to make, you know, then some type of payment plan or if you have the money to pay that, which is a very large sum, and and that can put people out of business.
00;10;55;16 - 00;11;28;22
Meg Pekarske
And so, so it is, difficult situation to navigate, which is why I think it's, you know, it's never fun to deal with these situations, but I think we have so much experience behind us that I think we can really provide a level of, to leadership and to boards and other things. So, so, Bryan, I was having like, a flashback to a meeting with the board had some audits in the past.
00;11;28;25 - 00;11;52;12
Meg Pekarske
Because boards do get real jumpy about these kinds of things. Rightfully so. So, but but that's talk about another recent victory we had because these came in like quick succession. Because this is both winning. You know, the individual claim denials, but also winning on the statistics to.
00;11;52;14 - 00;12;22;02
Bryan Nowicki
Right. So I described those two pathways to do it. And we had a victory recently where we won on both pathways. The attacked each individual claim denial on clinical and technical issues and won all of those at the ALJ and at the LJ. We also had our statistical expert testify, against the, the auditors, statistical expert and the ALJ sided with us on the statistical issues.
00;12;22;02 - 00;12;43;02
Bryan Nowicki
So, really, it's a kind of good to win in both ways. If it went to the same result where the overpayment went from the millions to the tens of thousands, much more manageable. So that, yeah, that was a good victory. And right now we're in, the point in the process where a CMS can appeal these past the ALJ.
00;12;43;02 - 00;13;07;13
Bryan Nowicki
So, it remains to be seen, is CMS going to appeal as they they often appeal? Adverse statistical decisions? I think they like to try to protect their statistical methodology. So in some respects it it might be better to win on the individual claims than to win on the statistical issues, because CMS is more prone to appeal.
00;13;07;16 - 00;13;16;29
Bryan Nowicki
When we win on statistical issues. But yeah, that was a great victory for that client. They were undergoing some financial stress and hopefully that's going to all be alleviated.
00;13;17;00 - 00;13;31;10
Emily Solum
Yeah. You do want to raise the statistical arguments even though when there's, you know, one shorter path to success, you have to preserve those argument. And so you definitely need to do both and those hearings.
00;13;31;17 - 00;13;59;17
Meg Pekarske
And Bryan, that was a case that we got involved in. And the tail end of things. So and obviously we really made a difference in, in that case. And I remember, you know, jumping down in your office when we've got victories like this, breathless like I wasn't doing cartwheels because that's not in my, you know, my expertise anymore.
00;13;59;17 - 00;14;15;09
Meg Pekarske
But I was doing a lot of jumping and clapping and hooting because there I mean, as lawyers every day you don't get wins like this. So they, we should celebrate and and.
00;14;15;13 - 00;14;40;06
Bryan Nowicki
Extrapolations they can be. But what we call bet the company kind of issues when you're facing like our clients have you know, 3 million can be a huge imposition. But even for larger organizations, 24 million, 48 million, I mean, these are huge numbers. And so, yeah, we're ecstatic when we get those victories. And we've had a lot of victories on those lines, thankfully.
00;14;40;09 - 00;15;12;11
Meg Pekarske
Yeah. Well, and I think that something I've learned throughout the years is that I may be jumping up and down, but I think clients are to feel like, well, this never should have happened to begin with. And so it feels a little bittersweet to them because it's like, okay, great. But, you know, and this is the the general flaws in the audit process where the beginning is so different than the and, you know, why did we have to go through all of that flaws in the system.
00;15;12;11 - 00;15;26;08
Meg Pekarske
But bigger policy changes need to be applied there. But but Emily, as we wrap up here, tell me what you're seeing on home health and managed care in terms of extrapolation, because hospice isn't alone. There.
00;15;26;11 - 00;15;49;19
Emily Solum
Sure. So at least on the managed care print, I can tell you that some of the managed care organizations just aren't as sophisticated as DMs is. On the extrapolation front, and they do have more discretion, I think, than some of the contractors that are working on behalf of CMS. And so those are the silver linings when we're talking about extrapolation and the managed care space.
00;15;49;21 - 00;16;14;09
Emily Solum
So you may see, to the extent hospice gets carved in or you have other service lines hospices may experience and those other service lines extrapolated audits on the managed care front. But it's, it's it's important to do the same things that you would do in a CMS type audit. Challenge the process, and hopefully you'll have some success there.
00;16;14;11 - 00;16;27;03
Emily Solum
Because of that discretion that managed care organizations have on the on the home health front. So home health agencies have the review choice demonstration program with CMS.
00;16;27;05 - 00;16;30;29
Meg Pekarske
So tell me a little bit about that, Emily. What what is that.
00;16;31;01 - 00;16;58;06
Emily Solum
Yeah. So, CMS came up with this demonstration to reduce the impact that claimants were having on home health agencies. And so depending on how well a home health agency does and a review conducted under that demonstration, it will, affect how they are reviewed in the future. One of the options on the review choice demonstration is the elective post payment review.
00;16;58;09 - 00;17;24;05
Emily Solum
And what we're seeing now is that, the Medicare administrative contractors are actually pulling a statistically valid random sample to evaluate whether the provider is doing well in those audits. And, we make this argument on our on our hospice audit, that the sample size should be sufficient to give an accurate picture of the error rate, or the errors in those claims.
00;17;24;07 - 00;17;47;16
Emily Solum
And, be careful what you asked for, because a statistically valid random sample in this selective post payment review can be quite a bit. We have seen them as high as 15% of claims submitted during a six month window, which for some providers, if you're a high volume, that is a huge number of aiders. And so, extrapolation definitely has not gone away.
00;17;47;19 - 00;17;53;14
Emily Solum
And it's definitely, entering into the picture with other types of audits now. Yeah.
00;17;53;21 - 00;17;55;14
Meg Pekarske
Well, Bryan, any closing thoughts?
00;17;55;20 - 00;18;27;18
Bryan Nowicki
Well, yeah, I think, just to touch upon I think we've been talking a lot about Medicare, but it also can, arise in Medicaid audits. So we're dealing with a number of, federal you pick audits of Medicaid payments. And they're referring to extrapolation. And sometimes it appears to me that they're referring to it, but I don't I can't understand how they could conceivably do it, because, they're taking a sample from a number of different hospices.
00;18;27;20 - 00;18;50;13
Bryan Nowicki
So we're trying to work through what is it that they're getting at with that extrapolation? Is it each hospice is extrapolated or, is there a bigger picture out there? But also we we're working on a case now that was a state initiated Medicaid audit that they said there they are extrapolating, the information they provided regarding that extrapolation.
00;18;50;13 - 00;19;12;06
Bryan Nowicki
And just the way they describe it, it seems like this is this cannot be an extrapolation because they're talking about, a nonrandom sample. They're not divulging information. So just be mindful that states can also on the Medicaid side, if their regulations allow, they can extrapolate. So it's not just a Medicare thing. It's not just the hospice thing.
00;19;12;06 - 00;19;22;21
Bryan Nowicki
It's multiple providers, different payer sources. Be aware of what you're getting into. Because if it's an extrapolation, it really affects the strategy going forward.
00;19;22;24 - 00;19;37;28
Emily Solum
I'll add to that too, real quick. There is a big difference between Medicare and Medicaid to the Medicaid extrapolations are going to be governed by state law. So it's very important to understand the distinction between those because you may have more arguments available to you.
00;19;38;00 - 00;20;10;27
Meg Pekarske
Yeah. And I remember when there used to be called mix when you had Z picks and mix before they became unified under, you pick the the Medicaid manual or the manual for mix said that they didn't have authority to extrapolate. But, you know, times change. And I think, you know, looking at, and these Medicaid audits are always very complicated because in some ways you can align yourself with the state, right?
00;20;10;27 - 00;20;38;09
Meg Pekarske
Because it's like the federal contractor UPIC is looking at what claims the state paid. So they're also looking at the state's work in addition to our work. And so that also goes into, as you say, Emily, sort of different strategy that, you know, you can use when you're dealing with Medicaid audits. And because states oftentimes don't understand hospice very well.
00;20;38;09 - 00;20;54;06
Meg Pekarske
So we see sometimes, a real need for education there. So anyway, well, maybe, maybe in two years we'll have another extrapolation still going.
00;20;54;09 - 00;21;00;19
Bryan Nowicki
I wait for the extrapolation is dead podcast. But I'm not holding my breath.
00;21;00;21 - 00;21;31;08
Meg Pekarske
Yeah, well, we did have a little reprieve there sometime between whatever before 2019. Because it was it’s back because they they be redid the amp pin and changed some guidance. So who knows, who knows. But, great job, you guys. And there are really, really exciting victories and, you know, hard earned. And it took years of time and effort.
00;21;31;09 - 00;21;33;19
Meg Pekarske
So congratulations. Great news.
00;21;33;21 - 00;21;35;04
Bryan Nowicki
Thanks, Meg.
Emily Solum
Thank you.
00;21;35;06 - 00;21;41;18
Meg Pekarske
Awesome. Until next time.
00;21;41;20 - 00;22;01;29
Meg Pekarske
Well that's it for today's episode of Hospice Insights: The Law and Beyond. Thank you for joining the conversation. To subscribe to our podcast, visit our website at huschblackwell.com or sign up wherever you get your podcasts. Until next time, may the wind be at your back.