CMS sought recovery of an alleged overpayment in excess of $730,000 from a diagnostic laboratory, upon the conclusion and recommendation of Safeguard Services (SGS) to deny all claims submitted for 3,006 Medicare beneficiaries. Mr. Gaitan and Mr. Suarez, of our health care practice group, appealed the overpayment claim through the reconsideration (second level appeal), where they filed an appeal with the qualified independent contractor (QIC) establishing that all billed services were provided pursuant to physician orders, as documented by the medical records.
SGS, the Zone-7 Program Integrity Contractor (ZPIC), first conducted an onsite inspection of the diagnostic laboratory on March 28, 2012 and September 5, 2012. During the March visit, an SGS inspector presented the office manager with a list of approximately 400 physician names and/or referring providers and asked him to identify every provider who had referred patients to lab between 2008 and 2012, prohibiting him from referring to his business records. As can be expected, the office manager could not recollect every referring physician’s name, resulting in the post-payment denial of all claims from six (6) referring physicians not recognized by the office manager. The sum of which was $736,305.93.
In the reconsideration appeal, Mr. Gaitan affirmatively established through law and fact that all services at issue were rendered by the provider pursuant to a valid order from the referring physician. With the appeal letter, Mr. Gaitan also submitted sworn affidavits from the office manager and medical records to support payment of the claims. Mr. Gaitan worked closely with the QIC clinical reviewer to highlight specific evidence within the medical records that conclusively established that claims were medically reasonable and necessary.
On July 19, 2013, QIC issued a partially favorable determination, finding that the grand majority of claims were payable. The final overpayment amount was $6,826 – less that 1% of the original overpayment.
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