What is an MAC Audit?
Experienced Medicare Administrative Contractor Audit Defense Attorneys
The Centers for Medicare and Medicaid Services (CMS) refer to Medicare Administrative Contractors (MACs) as the “hub” of CMS’s fee-for-service audit program. This program, established under the Medicare Modernization Act of 2003, is one of the federal government’s primary tools for fighting Medicare fraud and abuse, and it involves engaging the services of private contractors to identify Medicare overpayments and seek recoupments from participating providers who have submitted false and fraudulent claims for Medicare reimbursement.
MACs have several roles within CMS’s fee-for-service audit program. One of these roles is to audit certain types of providers suspected of engaging in Medicare fraud and abuse. This includes:
- Providers who bill for Medicare Part A and B reimbursements;
- Home health and hospice service providers; and,
- Durable medical equipment (DME), orthotics, and prosthetics companies.
If your business or practice has been contacted by a Medicare Administrative Contractor, there is a lot you need to know. There are also several steps you should begin taking immediately in order to help protect against the risk of an inaccurate or unjust audit determination. The following is a brief overview of some of the key information for health care providers facing MAC audits. For legal advice, you can contact our firm to arrange a confidential initial consultation.
Identifying the Medicare Administrative Contractors (MACs)
As summarized on CMS’s website, an MAC is, “a private health care insurer that has been awarded a geographic jurisdiction to process Medicare Part A and Part B (A/B) medical claims or Durable Medical Equipment (DME) claims for Medicare Fee-For-Service (FFS) beneficiaries.” MACs work with CMS on a contract basis. Currently, the federal MAC contracts are awarded to the following entities:
MACs with Jurisdiction over DME, Orthotics and Prosthetics Companies
- CGS Administrators, LLC – Alabama, Arkansas, Colorado, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, New Mexico, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia, Wisconsin
- Noridian Healthcare Solutions, LLC – Alaska, Arizona, California, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Maryland, Massachusetts, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, Wyoming
MACs with Jurisdiction Over Home Health and Hospice Providers
- CGS Administrators, LLC – Delaware, District of Columbia, Colorado, Iowa, Kansas, Maryland, Missouri, Montana, Nebraska, North Dakota, Pennsylvania, South Dakota, Utah, Virginia, West Virginia, Wyoming
- National Government Services, Inc. – Alaska, Arizona, California, Connecticut, Hawaii, Idaho, Maine, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont
- Palmetto GBA, LLC – Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas
MACS with Jurisdiction Over all Other Medicare Part A and B Providers
- Cahaba Government Benefit Administrators, LLC – Alabama, Georgia, Tennessee
- CGS Administrators, LLC – Kentucky, Ohio
- First Coast Service Options, Inc. – Florida
- National Government Services, Inc. – Connecticut, Illinois, Minnesota, New York, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, Wisconsin
- Noridian Healthcare Solutions, LLC – Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming
- Novitas Solutions, Inc. – Arkansas, Colorado, Delaware, District of Columbia, Maryland, New Jersey, New Mexico, Oklahoma, Pennsylvania, Texas, Louisiana, Mississippi
- Palmetto GBA, LLC – North Carolina, South Carolina, Virginia, West Virginia
- Wisconsin Physicians Service Insurance Corporation – Indiana, Iowa, Kansas, Michigan, Missouri, Nebraska
Facing an MAC Audit: Preparations
When confronted with the prospect of an MAC audit, DME companies, home health agencies, hospices, and other health care providers need to do as much as they can to prepare for the process. MAC audits can be invasive and time-consuming ordeals, and providers cannot simply assume that MAC auditors will reach accurate conclusions about the legitimacy of their billing practices. Upon learning that an audit is in process, providers should:
- Establish clear communication protocols, including designating internal points of contact for communications with auditors and the company’s legal counsel.
- Take appropriate steps to preserve records that may be relevant to the audit.
- Conduct an internal assessment to determine whether any incorrect billings may have been erroneously submitted for Medicare reimbursement.
- Proactively address any potential deficiencies in billing processes or procedures identified during the internal assessment, including self-reporting overpayments to CMS as required by law.
- Seek to engage legal counsel promptly in order to implement effective compliance protocols and intervene in the audit with the goal of mitigating liability due to MAC auditor errors and mistakes.
Facing an MAC Audit: Intervention
The concept of intervention in an MAC audit is critical. Medicare Administrative Contractors are incentivized to identify overpayments (under the fee-for-service recovery program, MACs and other Medicare contractors are compensated on a contingency fee basis), and this means that they will often go to great lengths to find sufficient grounds to allege that overpayments have been made. However, there are limits on MACs’ authority during audits, and hiring experienced legal counsel is essential to ensuring that providers do not unknowingly share information they are not legally-obligated to disclose.
Another critical aspect of intervention in MAC audits is challenging auditors’ mistakes and erroneous conclusions. Unfortunately, mistakes are common, and providers frequently face recoupment requests based upon unjustified audit determinations. An experienced health care fraud defense attorney will be able to proactively address issues such as:
- Seeking recoupments based upon technical issues (such as missing dates or signatures) that are beyond MACs’ scope of authority;
- Seeking recoupments based on outdated Medicare billing regulations that did not apply when reimbursement requests were submitted;
- Seeking recoupments based on current Medicare billing regulations that do not apply to previously-submitted claims;
- Seeking recoupments based upon improper interpretation and application of relevant Medicare billing regulations; and,
- Seeking recoupments based upon other errors that are common during MAC audits of home health agencies, hospices, DMEs, and other health care providers.
Facing an MAC Audit: Consequences
1. Direct Consequences of MAC Audit Determinations
For providers in all segments of the health care industry, the consequences of an unfavorable MAC audit determination can be substantial. Most immediately, MACs can demand repayment of allegedly-overbilled amounts on behalf of the government. Failure to pay can lead to interest and penalties, and this is true regardless of the validity of the MAC’s conclusions. In order to prevent recoupments from coming due, health care providers must quickly file an appeal (assuming they have grounds to do so), which in itself can be a costly and time-consuming process.
Equally costly – if not more so – for many providers is MACs’ authority to initiate prepayment review of Medicare reimbursement claims. If an MAC finds grounds to allege overpayments, it can initiate prepayment review in order to prevent reimbursement of future improper requests. The prepayment review process can delay payments significantly, in some cases as long as six months. This can obviously have dramatic consequences for your facility’s ongoing cash flow requirements.
2. Consequences Stemming from Federal Health Care Fraud Investigations
In addition to these (and other) MAC-imposed consequences, health care providers who receive unfavorable MAC audit determinations can potentially face a number of other negative ramifications as well. These ramifications stem from federal investigations triggered by allegations of health care fraud made during MAC audits.
If an MAC uncovers billing records that it considers to be evidence of health care fraud, it can refer providers to CMS, the U.S. Department of Justice (DOJ), and other federal authorities for civil or criminal prosecution. While civil cases are most common, the DOJ frequently pursues criminal health care fraud cases as well. It is also possible for an audit to trigger a civil investigation, only for additional evidence to be uncovered during the investigation that leads to criminal charges.
This is perhaps the greatest concern for providers facing MAC audits. While very few health care providers expect to be prosecuted by the federal government, when facing an audit, it is important to acknowledge and accept that this is a very real possibility. Due to the wide variance in MAC audit outcomes, even providers that believe they have nothing to worry about need to be cognizant that an unfavorable audit determination – even one that is misguided – could lead to a federal investigation. While the investigation may end without charges being filed (and, when we represent clients under investigation, this is always our primary focus), facing a federal investigation in and of itself is a matter that can have wide-reaching business and professional implications. For example, physicians and other licensed professionals may have a duty to disclose the investigation to a state licensing board; and, even if the federal government chooses not to prosecute, a licensing board could still choose to take remedial action.
If an investigation leads to federal charges, the penalties for health care fraud can include:
- Treble (triple) damages
- Substantial fines
- Fees and costs
- Loss of federal program eligibility (program exclusion)
- Federal incarceration
Schedule a Confidential Initial Consultation at Oberheiden, P.C.
To speak with the MAC audit defense law attorneys at Oberheiden, P.C., please call (214) 692-2171, or request an appointment online. We serve health care providers across the county; and, once you contact us, we will make arrangements for you to speak with one of our attorneys as soon as possible.