NPR Process / Appeals / Reopenings

1. NPR Process / Appeals / Reopenings Jim Flowers DMA Audit Section November 9, 2006

2. NPR Process • DMA Audit Staff review Clifton Gunderson LLP audit work/work papers/cost report and have final acceptance • DMA review may result in • Acceptance • Additional Questions • Add / Delete / Revise Adjustments • Potential Additional Fieldwork

3. NPR Process • Once accepted DMA will issue the Notice of Program Reimbursement per 42 CFR 405.1803 • Version of DMA NPR’s • Hospital Outpatient Settlement • Inpatient Desk Review • Inpatient / Outpatient Field Audit

4. NPR Process Hospital Outpatient Settlement NPR • NC State Plan, Attachment 4.19-B, Section 2a • Prior to 10/01/2005 and State Plan Amendment 05-015, Non-State Owned Settled to 80% Allowable O/P Cost • Excludes UNC & PCMH Hospitals • Direct Settlement Impact • NPR • Appeal Rights Notification on Settlement • Not an Audit

7. NPR Process • State Owned / Operated Hospitals plus UNC Hospitals and PCMH and are settled to 100% allowable costs. • Effective 10/01/2005 and with SPA 05-015, Critical Access Hospitals are also settled to 100% allowable costs and will be field audited each year. • All State Owned / Operated Hospitals plus UNC Hospitals and PCMH are field audited each year on inpatient and outpatient services. • There is no separate NPR for Hospital Outpatient Settlement on State Owned Hospitals.

8. NPR Process Inpatient Desk Review • 42 CFR 447.253(g) • Periodic audits / reviews of Medicaid Hospital Providers • No Direct Settlement Impact • NPR • Appeal Rights Notification on Adjustments • May Require Outpatient Settlement Revision

10. NPR Process Inpatient/Outpatient Field Audit • 42 CFR 447.253(g) • Periodic audits / reviews of Medicaid Hospital Providers • Settlement Impact • NPR • Appeal Rights Notification on Adjustments • May Require Outpatient Settlement Revision

12. NPR Process • Attachment ‘A’ – included with applicable NPR’s • Primary document used by DMA to communicate with DHHS Controller’s Office for AP / AR on Cost Report Settlements. • Intended to reflect the current Net Payable / Net Receivable due to settlements and audits of cost reports. • DMA noted problems in age of historical provider payments when clearing OP Settlement Backlog FY1997 – FY2002.

15. NPR Process • Two levels of review • Primary review of audit and workpapers • Final review at signature of NPR and Attachment A. • DHHS Controller’s Office is forwarded a copy of the NPR and Attachment A when cost report / settlement is mailed to the provider.

16. NPR Process • All NPR’s mailed via certified USPS • Mailed to address on cost report • If in doubt or question on address, mailed to address registered with EDS as the Medicaid provider number accounting address

17. NPR Process • Terminated / Bankrupt Provider NPRs • Mailed to Medicaid provider number address of record for terminated cost report period • Settlements due DMA on bankrupt or terminated providers are referred to the DHHS Controller’s Office to follow cash management plan, including possible referral to NC Attorney General for collection efforts.

18. Appeal Process • Defined in the State Administrative Procedure Code 10A NCAC 22J.0102 • Will be cited in appropriate NPR • Provider may request a Reconsideration Review • Must be done within 30 days of receipt of NPR

23. Appeal Process • Calculation Errors or Cost Report Errors. • If a settlement or issued cost report contains a noted error or miscalculation, the DMA Audit Section will work with the provider to correct the error and reissue the cost report or settlement outside of the appeals process. • Examples of errors corrected outside of the appeals process: • Spreadsheet formula error • Prior payment by provider not shown on Attachment A.

24. Appeal Process • For issues which are not errors, the specific address and Hearings Officer point of contact are identified in the NPR Letter. • Requests must be in writing. • Requests received in excess of 30 days may be denied. • Requests without specific dissatisfactions (i.e. “blanket appeals”) noted will be denied.

25. Appeal Process • Hospital Outpatient Settlements are performed and issued as a settlement. These are not field audits and therefore have no Audit Adjustment Report. • For Outpatient Settlements, the schedules are recalculated and reissued based on the provider’s Medicaid cost report and updated paid claims information. • Hospital Outpatient Settlements may be appealed; however, the provider must state the specific issue with which they disagree (i.e. proper mapping of revenue codes) as there will not be a specific audit adjustment.

26. Appeal Process • Appeal received by the Hearings Officer are logged and a response is sent to the provider noting that their appeal has been accepted. • From this point the appeal rights have been reserved and DMA will attempt an informal resolution with members of the DMA Audit staff and/or Clifton Gunderson. • Significant number of appeals received and currently being worked. • Most appeals concern Long Term Care Providers

28. Appeal Process • Typically appeals fall into two main categories and these would warrant a written request to the Hearings Officer within 30 days to preserve the provider’s appeal rights: • Documentation • Interpretation

29. Appeal Process • Documentation Appeal • Missing documentation • Requested supporting documentation not received timely to complete audit • Incorrectly supplied documentation • Typically can be resolved outside of an Administrative Conference via provider submission and DMA review of applicable documentation

30. Appeal Process • Interpretation Appeal • Involves different interpretation of existing policy, regulations, or laws. • Involves interpretation of whether cost report data as filed by the provider meets existing policy, regulations, or laws. • Typically is not resolved outside of an Administrative Conference and positions will be presented to the Hearings Officer.

31. Appeal Process • DMA and/or Clifton Gunderson will issue correspondence to the provider stating the position, documentation, and applicable regulation on each contested adjustment. • If there are applicable workpapers the provider does not have or has requested, those will be enclosed. • DMA may reverse or revise an adjustment based on review of documentation submitted by the provider with the Appeal. If so, this will also be noted in the correspondence. • The provider will be given a reasonable time period to respond to the correspondence; however, DMA / CG and the provider may still disagree.

32. Appeal Process • If DMA / CG and the provider reach an impasse on one or more adjustments, DMA will communicate this impasse to the Hearings Officer and an Administrative Conference will be scheduled. • Conference date will be 30-60 days after an impasse has been communicated. Mutually agreeable time and date. • The Hearings Officer will typically request written positions and applicable documentation from DMA/CG and the provider on each of the contested issues and these are typically required no later than 14 days prior to the scheduled Conference date.

33. Appeal Process • The Administrative Conference is a non-legal proceeding; as such legal counsel is not required. However, if the provider intends to bring legal counsel to the Conference, they are required to inform the Hearings Officer in a timely manner. • Administrative Conferences are normally conducted in person; however, providers have the option to conduct the Administrative conference via teleconference.

34. Appeal Process • The Administrative Conference is an attempt for an independent DMA Hearings Officer to hear both sides of appealed issues and render the final informal agency decision for DMA. • The Hearings Officer Decision will be communicated to the provider in a Decision Letter, outlining the position and determination of each appealed issue.

35. Appeal Process • The Hearings Officer will issue one of four possible determinations on each appealed issue: • Sustain DMA Audit Section’s adjustment • Overturn DMA Audit Section’s adjustment • Allow provider to withdraw an appealed adjustment • Allow DMA and provider to reach a non-precedent compromise on the adjustment

36. Appeal Process • If the Hearings Officer overturns any adjustment or a compromise is reached at the Administrative Conference, the DMA Audit Section will revise and reissue the appropriate cost report or settlement under a new NPR (without appeal rights noted as appeal rights have already been exercised). • If the provider disagrees with the DMA Hearings Officer Decision, specific language and regulatory citation will be included in the Decision Letter instructing the provider on how to appeal the Decision to the Office of Administrative Hearings (OAH). • Any appeals to OAH must be done within 60 days of the Decision Letter.

38. Appeal Process • Appeals to the Office of Administrative Hearings will be represented by DMA Counsel at the NC Attorney Generals Office. • Recent courses of action on Appeals to OAH: • Hearing before Administrative Law Judge • Ordered Mediation

39. Reopening Process • 10A NCAC 22J.0102 identifies when the state agency’s actions become final in absence of an appeal or timely Petition for Reconsideration Review. (Appeal rights citation in provider’s NPR) • Reopenings will be reviewed in accordance with the Provider Reimbursement Manual (CMS 15-1) Sections 2931 and 2932 as appropriate.

40. Reopening Process • Timelines for reopening an Intermediary (DMA) decision will be within three years of the date of the NPR. • If a reopening of a cost report is pursued by a provider, the request should be addressed to the DMA Audit Section point of contact listed on the NPR.

41. Reopening Process • Reopening based upon Medicare Audit Findings. • Settlements, Desk Reviews, and Field Audits are initially conducted based upon parallel review with the As Filed Medicare cost report. • Desk Reviews & Field Audits request copies of audited Medicare cost reports if completed and will incorporate material adjustments into the Medicaid cost report. • Providers may request a reopening based on Medicare audit findings completed subsequent to Medicaid audit processes. A full copy of the audited Medicare cost report with all adjustments must be filed with the request to DMA.

42. Reopening Process • Limitations on Amended Cost Reports as identified in CMS 15-1, Section 2931.2 are applicable. • Material errors discovered subsequent to filing • Comply with health insurance policies / regulations • Reflect settlement of a contested liability • Notice of Refusal to Reopen or Correct, CMS 15-1, Section 2932.1

43. Reopening Process • Limitations on Amended Cost Reports as identified in CMS 15-1, Section 2931.2 are applicable. • Material errors discovered subsequent to filing • Comply with health insurance policies / regulations • Reflect settlement of a contested liability • Except to comply with health insurance policies / regulations, the “provider may not file an amended cost report to avail itself of an option it did not originally elect.”

44. Reopening Process • Notice of Refusal to Reopen or Correct, CMS 15-1, Section 2932.1 • Notice to be furnished on finding by DMA that a reopening is not warranted. • CMS 15-1, Section 2931.2 • “Final determinations will not be reopened simply because a different view is taken with respect to the import of evidence upon which a determination was made.”

45. NPR Process - Working Issues • Finalization of all FY1997 – FY2002 Hospital Outpatient Settlements incomplete from BCBS Common Audit Agreement. • Coordination with Clifton Gunderson of FY2003 and forward NPR Process on hospitals with Outpatient Settlements and also selected for Desk Review or Field Audit. • Coordination with DHHS Controller’s Office on historical AP and AR for the Attachment A’s.

46. Appeal Process - Working Issues • Appropriate Staff / Management in place at Clifton Gunderson LLP to adequately address cost report appeals • Coordination of documentation with providers • Full Recap of all adjustments • Timelines for documentation requests • PS&R Mapping Issues • Addressed timely by DMA / Contractor • CRNA appeals in progress