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Washington’s New Medicaid
Audit Regulations: No More Mr. Nice Guy
By
Roger
L. Jansson and Robert
G. Homchick
[July 2007]
The Washington Health and Recovery Services Administration
(HRSA) has completely overhauled the Medicaid audit and appeals
process. HRSA issued the new rules governing audits which went
into effect June 1, 2007. (See http://apps.leg.wa.gov/WAC/default.aspx?cite=388-502A.)
In general, the new rules significantly restrict providers’
rights. For example, the new rules:
- Reduce advance notification for on-site audits from 20 working
days to 10 working days (with the exception of a 30-calendar-days
notice for hospitals).
- Allow HRSA to bypass the dispute conference and issue a
final audit report when certain conditions are met. For instance,
HRSA reserves the right to bypass the dispute conference if
a provider “fails to participate or comply with the
department’s audit process or unduly delays the department’s
audit process.”
- Reference existing documentation requirements and “clarify”
that a provider’s bill for services, appointment books,
accounting records, or other similar documents alone may not
constitute appropriate documentation of services.
- Provide that billing adjustments to paid claims do not
affect the original audit universe, even if the provider properly
rebills claims for an adjustment.
- Require the interest on overpayments to be extrapolated,
despite the fact that the statutory basis for imposing interest
does not contemplate extrapolation of interest on overpayments
and the statistical validity of extrapolating interest is
questionable.
- Assert HRSA’s authority to initiate unlimited reaudits
of the same audit period.
- Eliminate revised draft reports. HRSA previously issued
such reports to reflect any areas of agreement with providers
prior to the dispute conference.
- Authorize HRSA to issue subpoenas for records pursuant to
RCW 43.20A.605, including depositions or testimony taken under
oath.
- Remove protective language requiring HRSA to destroy records
at the end of the audit and to not remove original records
from the provider’s office. HRSA claims it will continue
to follow these practices but is unwilling to be bound by
regulations.
- Confirm that HRSA does not reimburse administrative fees
associated with an audit, even if the provider prevails.
- Expand the scope of audits to include the clinical determinations
of whether the services were “medically necessary”
and “provided at the appropriate level of care.”
- Reduce the time period for the provider to dispute draft
audit findings from 45 days to 30.
- Require the provider to personally attend the dispute conference
in Olympia, regardless of the inconvenience, and regardless
of whether the provider has engaged counsel to handle the
appeal.
- Require the provider to schedule the dispute conference
within 60 days of the date the provider receives written acceptance
of the dispute, regardless of the complexity of the appeal
or the time required to prepare.
- Eliminate the ability to request an extension of the deadline
for requesting a dispute conference. Historically extensions
were freely granted.
The new regulations governing Medicaid audits contain a host
of traps for the unwary. Providers should exercise caution in
responding to audits and initiating the appeal process under
these new rules. Should you have any questions about the new
rules or the audit process, please feel free to contact Roger
Jansson, Bob Homchick or your usual Davis Wright Tremaine attorney.
For more information,
please contact:
This advisory is a publication of the Health Law Group of Davis
Wright Tremaine LLP. Our purpose in publishing this advisory
is to inform our clients and friends of recent legal developments.
It is not intended, nor should it be used, as a substitute for
specific legal advice as legal counsel may only be given in
response to inquiries regarding particular situations.
Copyright 2007, Davis Wright Tremaine
LLP.
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