Payment Parity and More Funding Equals More Medicare Audits

Many states are implementing payment parity on a permanent basis.

Every time a regulation is revised, Medicare and Medicaid audits are altered…sometimes in the providers’ favor, but most times not. Since COVID, payment parity has created a large discrepancy in reimbursement rates for Medicare across the country.

Payment parity is a state-specific, governor-driven decision, depending on whether your state is red or blue.

Payment parity laws require that healthcare providers are reimbursed the same amount for telehealth visits as in-person visits. During the ongoing pandemic, or public health emergency (PHE), many states implemented temporary payment parity through the end of the PHE. Now, many states are implementing payment parity on a permanent basis. As portrayed in Figure 1, as of August 2021, a total of 18 states have implemented policies requiring payment parity; five states have payment parity in place with caveats; and 27 states have no payment parity.

On the federal level, H.R. 4748: Helping Every American Link To Healthcare Act of 2021, was introduced on July 28. HR 4748 allows providers to furnish telehealth services using any non-public-facing audio or video communication product during the seven-year period beginning the last day of the PHE. Yay. But that doesn’t help parity payments.

For example, New York is one of the states that has passed no parity regulation, temporary or permanent. However, the Governor signed an executive order mandating parity between telehealth and physical services. Much to the chagrin of the providers, the managed long-term care organizations reduced the Medicare and Medicaid reimbursements for social adult day care centers drastically, claiming that the overhead cost of rendering virtual services is so much lower (which is really not even accurate). You have to ensure that your consumers all have access to technology, sometimes buying computers for consumers. About 4 in 10 adults with lower incomes do not have home broadband services (43 percent), or a desktop or laptop computer (41 percent). And a majority of Americans with lower incomes are not tablet owners.

Amid all this confusion on reimbursement rates, last week the U.S. Department of Health and Human Services (HHS) released $25.5 billion in provider relief funds, and promised increased audits. Smaller providers will be reimbursed at a higher rate than larger ones, the Department said.

The first deadline for providers to report how they used grants they have already received is coming up at the end of September, but HHS on Friday announced a two-month grace period. HHS has hired several firms to conduct audits of the program.

Remember, on June 3, 2021, the Centers for Medicare & Medicaid Services (CMS) announced that Medicare Administrative Contractors (MACs) could begin conducting post-payment reviews for dates of service on or after March 1, 2020. Essentially, auditors can review any date of service, with or without PHE exceptions applicable, but the PHE exceptions (i.e., waivers and flexibilities) continue, as the PHE was extended another 90 days (and likely will be again, through the end of this year).

I’m currently defending an audit spanning a four-month period of June 2020-September 2020. Interestingly, even during that short period, some exceptions apply to half the claims, while others apply to all the claims. It can get tricky fast. Now imagine the auditors feebly trying to remain up-to-speed with the latest policy changes or COVID exceptions.

Here, in North Carolina, there was a short period of time during which physician signatures may not even be required for many services.

In addition to the MAC and Supplemental Medical Review Contractor (SMRC) audits, the Recovery Audit Contractors (RACs) have shown an increase in audit activities, as have the Unified Program Integrity Contractors (UPICs) and most state Medicaid plans. Commercial plan audits have also been on the rise, though they were under no directive to cease or slow audit functions at any time during the PHE.

Lastly, audit contractors have increasingly hinted to the use of six-year lookback audits as a means for providers that have received improper payments to refund overpayments due. This is the maximum lookback period unless fraud is alleged.

Programming Note: Listen to Knicole Emanuel’s RAC Report Mondays, on Monitor Mondays, 10 Eastern.