CMS Instructs Florida RAC to Cease and Desist

March 26, 2008

Recovery Audit Contractors (“RAC’s”) have now been expanded by CMS to begin audits beyond the initial three test states in which they started to all 50 states. I have previously reported that the RAC in Florida, HealthData Insights (“HDI”), had sent demand letters to scores of pain physicians in Florida, demanding return of all reimbursement for any pain procedure done where no fluoroscopy was performed. I had defended a number of physicians in the HDI audits, and in the process, learned that the RAC had based its reimbursement demands on an old Federal Register publication where pain physicians were lobbying for certain procedures to be included in the ASC setting arguing that fluoroscopy was required for pain procedures, and thus, those procedures should be added to the approved ASC list of payable procedures.

The RAC took the Federal Register language out of context and demanded reimbursement for all such procedures where no fluoro was paid. That was clearly improper since the Federal Register language was merely an argument by pain physicians to secure more ASC reimbursement, not a rule or promulgation by CMS. In a stunning about face, as a result of the work of the Florida Medical Society (“FMA”) and the Florida Society of Interventional Pain Physicians, CMS has recently advised the FMA’s legal counsel, Fred Whitson, that it has instructed HDI to cease attempts to collect on the basis that no fluoroscopy was used with pain procedures. I spoke to FMA’s counsel, Fred Whitson, this morning, and he confirmed that he had indeed received an email from his contact at CMS advising that CMS has determined the RAC overstepped its bounds.

While Florida Medicare has recently adopted a LCD on facet blocks which states that fluoro is required for facet blocks, that LCD only became effective in October 2007, and thus, was not retroactive prior to that time, contrary to the RAC’s interpretation. I remain concerned about RAC’s because they are hired guns; they retain one-third of whatever they recover from you. They are incentivized to stretch the envelope in their interpretations of Medicare rules, because they are the beneficiary of that “stretch.” If you receive an audit request by a RAC or a demand for repayment, keep in mind that the battle is not over, but just beginning, as evidenced by the CMS cease and desist decision in Florida. Special thanks to client Deborah Tracy, M.D. in Florida and her colleague Lora Brown, M.D., President of the Florida Society of Interventional Pain Physicians, for their help in this regard.