Medicaid and
Managed Care Presentation
Durable Medical Equipment
Useful Tools for a Compliant Medicaid Practice
December 15, 2016
Disclaimer
The information contained within this presentation is provided for general
information only and does not constitute legal or regulatory advice. Any views
or opinions presented are solely those of the presenter(s) and do not represent
those of UnitedHealth Group, Horizon NJ Health, etc. (collectively referred to
as Medicaid). UnitedHealth Group, Horizon NJ Health, etc. its officers,
employees, and agents do not intend that anyone should rely on any
information contained within this presentation in any manner. UnitedHealth
Group, Horizon NJ Health, etc. and its officers, employees, and agents do not
assume, and hereby expressly disclaim, liability for use of or reliance on the
information contained within this presentation, and specifically disclaim any
guarantee, warranty, or representation that implementation may have.
The information contained herein may not apply to any specific factual or legal
circumstances, nor should the description of any specific case or set of facts or
circumstances be construed as a prediction that a similar outcome could be
expected if the case or facts occurred again. The outcome of every case is
dependent upon the facts and circumstances surrounding that particular case
and will differ from case to case. This information is not intended to substitute
for obtaining legal advice from an attorney and no person should act or rely on
any information from this presentation without seeking the advice of an
attorney.
Presentations are intended for educational purposes only and do not replace
independent professional judgment.
2
Goals For Today
To help you better understand:
The State agency and MCO structure
The Medicaid regulatory framework
Medicaid documentation requirements
Third Party Liability (TPL) requirements
Fraud, waste and abuse obligations
Consequences for non-compliance
Your obligations as a DME provider
3
What is Medicaid?
Medicaid is a joint Federal and State program that helps pay
medical costs if individuals have limited income and resources or
meet other requirements.
Medicaid is a voluntary program. If you want to participate, you
must know, accept and abide by the rules and regulations.
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Administration & Oversight
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Medicaid Managed Care Contract
The New Jersey Department of Human Services, DMAHS, has a
contract with the following MCOs:
Aetna Better Health of New Jersey
Amerigroup New Jersey, Inc.
Horizon NJ Health
UnitedHealthcare Community Plan
WellCare Health Plans of NJ, Inc.
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Durable Medical Equipment (DME)
§ 10:59-1.2 Definitions
"Durable medical equipment" (DME) as defined for this subchapter, means an
item or apparatus, other than hearing aids and certain prosthetic and orthotic
devices, including customized DME, modified DME and standard DME, which has
all of the following characteristics:
1. Is primarily and customarily prescribed to serve a medical purpose and is
medically necessary for the beneficiary for whom requested;
2. Is generally not useful to a beneficiary in the absence of a disease, illness,
injury, or disability; and
3. Is capable of withstanding repeated use (durable) and is nonexpendable; for
example, hospital bed, oxygen equipment, wheelchair, walker, suction
equipment, and the like.
7
Medical Supplies (MS)
§ 10:59-1.2 Definitions
"Medical supplies" means item(s) which are:
1. Consumable, expendable, disposable or non-durable;
2. Prescribed by a practitioner; and
3. Medically necessary for use by an eligible beneficiary.
8
How are DME, MS claims categorized?
Claim Source
Fee
-For-
Service
(FFS)
Encounter (ENC)
Category
of
Service
Medical Supplies:
• 30
DME:
• 31
Medical Supplies:
• MSB (Pharmacy),
• MSH (Home Health),
• MSO (Outpatient, Not ER),
• MSR (MS)
DME:
• MEB (Pharmacy),
• MEH (Home Health),
• MEO (Outpatient, Not ER),
• MEQ (DME)
Provider
Type 40
9
Medicaid Exposure for DME,
Medical Supplies
2009 to 2011 average
$80.8 million per year
2012 to 2015 average
$100.8 million per year
2016 – Jan. to Oct.
$-
$20,000,000.00
$40,000,000.00
$60,000,000.00
$80,000,000.00
$100,000,000.00
$120,000,000.00
2009 2010 2011 2012 2013 2014 2015 2016
FFS
ENC
10
$-
$10,000,000.00
$20,000,000.00
$30,000,000.00
$40,000,000.00
$50,000,000.00
$60,000,000.00
$70,000,000.00
$80,000,000.00
2009 2010 2011 2012 2013 2014 2015 2016
SUPPLIES, DME
40
FFS
ENC
Medicaid Exposure by Provider Type
11
Fraud, Waste and
Abuse
Meghan Ellerman
MCO Program Specific Requirements
Each MCO may have its own unique requirements:
Medical policies
Prior authorization
Reimbursement policies
Claims submission process
When in doubt, consult your MCO-specific resources:
Provider contract
Provider manual
Provider portal
Provider representative
MCO website
Newsletters and provider alerts
It is your responsibility to know these requirements.
13
Fraud
Fraud - an intentional deception or misrepresentation
made by any person with the knowledge that the
deception could result in some unauthorized benefit to
that person or another person, including any act that
constitutes fraud under applicable federal or State law.
N.J. Stat. § 30:4D-55
14
Waste
Waste is not defined in the rules, but is generally understood to
encompass overutilization, underutilization or misuse of
resources.
Waste is not usually a criminal or intentional act.
CMS’s Fraud, Waste and Abuse Toolkit
https://www.cms.gov/Medicare-Medicaid-Coordination/Fraud-
Prevention/Medicaid-Integrity-Education/Downloads/fwa-overview-
booklet.pdf
15
Abuse
Abuse - provider practices that are inconsistent with sound
fiscal, business or medical practices and result in unnecessary
costs to Medicaid or in reimbursement for services that are not
medically necessary or that fail to meet professionally
recognized standards for health care.
The term also includes recipient practices that result in
unnecessary costs to Medicaid.
N.J. Stat. § 30:4D-55
16
Third Party Liability
Christine Cheetham
Medicaid Fraud Division
17
Third Party Liability
…exists when any party is or may be liable to pay all or part of
the cost of medical assistance payable by the Medicaid or NJ
Family Care program.
N.J.A.C. 10:49-7.3
18
Third Party Liability
Medicaid and NJ Family Care (NJFC) benefits are last
payment benefits. All Third Party Liability (TPL) must be used
first and to the fullest extent in meeting the costs of the
medical needs of a beneficiary.
A TPL’s potential liability to pay for services cannot prevent
a Medicaid beneficiary from receiving covered services.
N.J.A.C 10:49-7.3
19
Third Party Liability (exceptions)
Medicaid and NJ Family Care beneficiaries may not be billed for any
amount, except…
1. For services, goods or supplies not covered or authorized by the
NJ Medical Assistance and Health Services Act or by the Division of
Medical Assistance and Health Services…
AND if the beneficiary has been informed in writing before the
service, etc. is rendered that the service, etc. is not covered…
AND if the beneficiary voluntarily agrees in writing before the
service, etc. is rendered to pay for all or part of the provider’s fee.
AND the provider has received no program payments from DMAHS or
the Medicaid MCO for the service.
N.J.A.C 10:74-8.7
20
Third Party Liability (exceptions)
Medicaid and NJ Family Care beneficiaries may not be billed
for any amount, except…
2. The provider does not participate in Medicaid and NJFC
either generally or for that service…
AND if the beneficiary has been informed in writing before the
service, etc. is rendered that the service, etc. is not covered…
AND if the beneficiary voluntarily agrees in writing before the
service, etc. is rendered to pay for all or part of the provider’s
fee.
AND the provider has received no program payments from
DMAHS or the Medicaid MCO for the service.
N.J.A.C. 10:74-8.7
21
Third Party Liability (exceptions)
Medicaid and NJ Family Care beneficiaries may not be billed for any
amount, except…
3. For payments made to the beneficiary by a third party on claims
submitted to the third party by the provider.
4 . For NJFC Plan C enrollee’s contribution to care responsibility and for
NJFC Plan D enrollee’s required copayment.
N.J.A.C. 10:49-7.3
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10 Minute Break? Keep going?
23
Veronica Scott
DME Documentation Guidelines
DME Documentation Requirements
Prior authorization, if applicable
Physician Order
Certificate of Medical Necessity from prescribing
provider
Proof of delivery
25
Physician Documentation Requirements
Medical records – The recipient must have had a face-to-face
visit with provider 6 months prior to DME physician order for
DME.
The face-to-face examination - must document that the
beneficiary was evaluated and/or treated for a condition that
supports the need for the item(s) of DME ordered.
Prior Authorization - if Applicable for certain DME supplies.
26
Physician Documentation Requirements
Written order– written order for the DME must not be prior to the
face-to-face encounter. Encounter must document the recipient
was treated for the issue related to the DME equipment it
recommended. Written order must include the following at a
minimum:
Physicians name
Item of DME ordered
Prescribing provider’s NPI
Signature of the ordering practitioner
Date of the physician order
Certificate of Medical Necessity (CMN)
27
Supplier Documentation Requirements
New Jersey Medicaid Supplier Manual
§ 10:59-1.5 Policy for providing medical supplies for DME.
(a) Medical supplies and equipment require a legible, dated
prescription or a Certificate of Medical Necessity (CMN) personally
signed by the prescribing practitioner. Either document shall contain
the following information:
The beneficiary's name, address and Medicaid/NJ FamilyCare
eligibility identification number; and
A description of the specific supplies and/or equipment prescribed;
For example, the phrase "wheelchair" or "patient needs wheelchair" is
insufficient. The order shall describe the type and style of the wheelchair.
The order shall describe the type and style of the wheelchair.
28
Supplier Documentation Requirements
New Jersey Medicaid Supplier Manual
The length of time the medical equipment items or supplies are
required;
A diagnosis and summary of the patient's physical condition to
support the need for the item(s) prescribed; and
The prescriber's name, address and signature.
(b) Other information in addition to (a) above may be
required for specific items and services, and is described in
other sections of this chapter which are related to coverage
of the specific item or service.
(c) The documentation required in (a) and (b) above shall be
maintained on file for a minimum of five years from the date
the service was rendered.
29
Certificate of Medical Necessity
30
Certificate of Medical Necessity
31
DME Risk Category: HIGH
The MFD and DMAHS assigned DME to the high risk category
High Dollars Spent
High Risk for Fraud, Waste and Abuse
32
Red Flags
Mathew Lawrie, AHFI
Horizon NJ Health
Red Flags
• High Quantity/High Frequency on orders
• Billing for more expensive items such as customized wheelchairs
or custom shoe inserts than were provided
• No proof of delivery on auto shipments
• Billing beyond the rental period
• Rentals that exceed the purchase price of the item
• Circumventing an MCO’s preauthorization process by billing below
the dollar threshold
• Use of DME miscellaneous codes
• Phantom DME suppliers
34
Red Flags
• Recruiting physicians to act as prescribing physicians
• Offers of free equipment or services to members in exchange for
their insurance information.
35
Medicaid Fraud Division Audits &
Investigations
Review Period
N.J. Stat. § 2A:14-1.2 (2016)
10 year statute of limitation
MFD has the capability to review records as far back as 2006
N.J. Stat. § 30:4D-12 (2016)
Records must be retained for at least 5 years from the date the service
was rendered
Records must include:
o Name of the recipient
o Date of service
o Nature and extent of each service
o Any additional information that may be required by regulation
36
Medicaid Fraud Division Audits &
Investigations
Relevant Statutes
N.J.A.C. 10:49-9.8 (2016)
All providers shall certify that the information furnished on the claims
is true, accurate, and complete.
Providers must keep such records as are necessary to disclose fully the
extent of services provided
o Ex. Invoices serve as one form of proof that you purchased
and supplied a Medicaid beneficiary with DME or Medical
Supplies
All employees, contractors, or subcontractors shall meet all the
requirements of the Medicaid or NJ FamilyCare programs
Must ensure all individuals or entities have current/ valid licenses and
certifications (also includes equipment and vehicles)
37
Medicaid Fraud Division Audits &
Investigations
Relevant Statutes Continued
N.J.A.C. 10:49-5.5 (2016)
Services not covered by Medicaid if
o No medical necessity
o No prior authorization
o Records inadequate and illegible
o Prescribing Physician excluded from participation in Medicaid
NOTE: This is not the complete list of non-covered services. The full
list consists of 18 items and can be found in the Administrative Code
section listed above.
38
Consequences
Lt. Joseph Jaruszewski
609-633-2228
Lt. Louis Renshaw
973-599-5954
Medicaid Insurance Fraud
is a Serious Crime
The MFCU in the Office of the Insurance Fraud Prosecutor (OIFP)
investigates and prosecutes Medicaid Fraud.
The MFCU utilizes Attorneys, Investigators, Nurses, Auditors and other
support staff to police the Medicaid system.
40
Medicaid Fraud (N.J.S.A. 30:4D-17)
It is illegal to knowingly and willfully make or cause to be made any
false statement in a claim.
It is illegal to over bill Medicaid for services provided or services
that were not received.
It is illegal to participate in a scheme to offer or receive kickbacks
or bribes in connection with the furnishing of items or services that
are billable to Medicaid.
41
Medicaid Fraud Consequences
Punishable by up to 5 years in state prison
Mandatory penalty up to $25,000 for each violation
Civil judgments and liens
Exclusion from the Medicaid/Medicare programs
Suspension or loss of professional licenses
Restitution/Recovery of overpayments
42
Health Care Claims Fraud
(N.J.S.A. 2C:21-4.3)
It is illegal to submit a false claim to the Medicaid program or an
insurance company in order to be paid for health care services which
were not received or provided.
Punishable by up to 10 years in state prison
In addition to all other criminal penalties allowed by law, a violator may
be subject to a fine up to five times the amount of any false claims.
Suspension or debarment from government funded healthcare programs
Forfeiture of professional license
43
Did you know…
If you are a practitioner and hold a professional license, you
only need to submit one false claim to be convicted.
Willful ignorance of the truth or falsity of a claim is not a
defense.
You can be found guilty of Health Care Claims Fraud even if
your claims were not intentionally fraudulent.
44
Whistleblower/Qui Tam
Empowers people to file civil suit against individuals and
companies that defraud the federal, state or local government.
A person filing suit might be eligible for up to a 30 percent
share of the recovery.
A person filing suit might be protected from being fired or
retaliated against by their employer for reporting fraud and
abuse to authorities.
45
Sample Cases
True Crime
Comfort Health
Submitted claims for non-orthopedic shoes and fake invoices to
substantiate false claims
Two owners each sentenced to 3 years in State Prison
Ordered to pay $150,000 in restitution and a $150,000 penalty
Debarred from Medicaid
46
False Claims Act
CareFusion
Settled a False Claims Act case alleging that CareFusion used
unlawful marketing practices and paid illegal kickbacks to promote
the use of surgical preparation solution Chloraprep
$40 million settlement paid to the Federal Government and various
States
Whistleblower paid approximately $3.26 million as part of the
settlement.
47
“Ignorance of the law excuses no one.”
48
Conclusion
Josh Lichtblau
Medicaid Fraud Division
MFD Brings us Together Regularly to
Discuss FW&A Issues
50
Affordable Care Act
42 CFR §455.450 contains the screening requirements for providers
who wish to enroll in the Medicaid program
51
Debarred Providers
A debarred provider is a person or an organization that has been
excluded from participation in Federal or State funded health
care programs
Any products or services that a debarred provider directly or
indirectly furnishes, orders or prescribes are not eligible for
payment under those programs
It is incumbent upon providers to perform Exclusion Checks, upon
hire and monthly thereafter
52
Self-Disclosure
Providers who find problems within their own organizations,
must reveal those issues to MFD and return inappropriate
payments.
Affordable Care Act §6402 and N.J.A.C. §10:49-1.5 (b)(1), (7)
require overpayments to Medicaid and/or Medicare be returned
within 60 days of identifying that they have been received
Failure to return an overpayment makes you liable to the
imposition of penalties of $5,500 to $11,000 per claim
53
Self-Disclosure
MFD’s self-disclosure policy is more liberal than OIG’s policy
If MFD agrees with your analysis, we do not impose interest or
penalties
MFD’s Self-Disclosure policy can be found on our website,
www.nj.gov/comptroller/divisions/medicaid/disclosure
54
MCO/MFD Recovery Actions
Once an overpayment has been identified as a result of an
investigation, actions to initiate recoupment of the funds
will take place
MCO will send a letter to the provider with the
overpayment amount
MFD will send a Notice of Estimated Overpayment or
Notice of Intent and, if necessary, a Notice of Claim
MFD may add false claim penalties between $5,500 and
$11,000
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What You Learned Today
All of the state agencies and MCOs that have oversight of your
contracts and billing
What the Medicaid Regulatory Framework looks like
How the Medicaid requirements apply to you
Your obligation to comply with rules and regulations for
documentation and billing in order to avoid allegations of fraud,
waste and abuse
What can happen to you if you are not compliant
56
Who to Contact
57
Questions
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