Challenging Medicaid Prepayment Review

When the North Carolina Division of Medical Assistance (“DMA”) decides to place a Medicaid provider on prepayment review, it can be the equivalent of a death sentence for a small business.  The primary problem is that there are few avenues to appeal the decision to be placed on prepayment review, even when there is little or even no justification for DMA’s decision.  Prepayment review then becomes a waiting game reducing cash flow and overwhelming providers with a paper chase gotcha game. Although the initial decision to place a provider on prepayment review cannot be challenged, this does not mean that a Medicaid provider has no options to challenge the prepayment review process.

Recently, a number of home care providers received notices from the Carolinas Center for Medical Excellence (“CCME”), DMA’s prepayment review contractor.  These notices included a list of documents that CCME required the provider to send to CCME in order for its claims to be reviewed for payment.   It was our opinion that providing some of the documents requested by CCME would require providers to break the law.  In other instances, CCME requested documents that the provider was not required keep in their files or documents that had no bearing on whether the Medicaid claim should be paid by DMA.

After initially filing a contested case challenging the request for records, DMA withdrew its notice and indicated it would be reviewing CCME’s documentation request.  This does not mean that the future possibility of prepayment reviews for these providers has been removed, but these successful challenges will at least reduce the provider’s administrative burden for providing records in order to be paid and ultimately will increase a provider’s chance of being paid for the services they have provided.

If you receive a prepayment review notice, you should carefully review it to determine if CCME’s documentation request contains similar problems. Providers already involved in prepayment review should also give a closer look at CCME’s documentation request to determine if the request violates the law or requires the production of documents that are not related to Medicaid policy or payment requirements.  If  an issue is discovered, it is likely that a similar challenge can be made.

Challenging CCME’s documentation request is one way to fight a prepayment review decision.  But providers should also be aware that, once CCME begins to review claims (and reject them), the provider has a right to challenge CCME’s denials at the Office of Administrative Hearing. Taking advantage of such a right could help stave off the death by a thousand cuts syndrome that seems to follow the prepayment review process and may allow the provider the ability be more quickly removed from the prepayment review process.

Any provider on prepayment review should also make sure that CCME is complying with the mandated timeframes to complete their review.  If CCME is delinquent in its review, a provider has a right to challenge this too.

Prepayment review can threaten a provider’s existence.  If providers are proactive and assertive in their approaching to getting off prepayment review, providers can survive and continue providing services to Medicaid recipients.

Varsha Gadani

Varsha Gadani

Varsha Gadani focuses her practice on the health care industry. Her clients include hospitals, physicians, behavioral health care providers, long-term care facilities, and other providers. Prior to joining Parker Poe, Ms. Gadani served as Assistant Counsel at the North Carolina Medical Society (NCMS). In this role, she performed a variety of legal functions for the NCMS. She monitored and analyzed emerging state and federal health law issues and advised physicians on health policy matters.

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