Tag Archives: MIC Audit

Avoiding RAC/MIC Appeal Extrapolation Mistakes

In previous blogs we have explained the importance of using Statistical Extrapolation  to win your RAC or MIC appeals.

Here are the top five things to avoid in order to overturn the statistical extrapolation.

DO NOT Base your extrapolation argument on a sample size that is too small

Although it is true that in most cases, the sample size used is too small, this argument alone generally will not prevail in the appeal.

  • What often happens is that the trier of fact will simply verify if the  evidence that the statistical methodology used was generally consistent with the Medicare Program Integrity Manual (MPIM).
  • There is an unfortunate passage in the MPIM which states that any sample size can be valid as long as the underlying methodology is sound.

And the unfortunate result is that the widespread use of poor and inadequate samples in the extrapolation often leads to results not in your favor.

DO NOT Accept print-outs instead of real electronic spreadsheets

It’s common for contractors to send print-outs with tables of data to back up their statistical work.   Don’t accept them for the extrapolation.

  • Try to get the original electronic spreadsheet because this allows you to verify the statistical work, and to see the details of how it was done.
  • It also will allow you to run various tests to determine the quality of the work.

Always use the “best business record” rule to argue for the original sheets.

DO NOT Neglect to obtain the full universe file

Audit Contractors generally select a “frame” from the larger universe of all of your claims.  From this “frame”, they will select their sample for analysis.

  • Without the entire universe file containing all claims you have filed, it’s impossible for you to run several important statistical tests that will help uncover any flaws in the contractor’s statistical work.

DO NOT Accept the argument that poor precision works in your favor for the extrapolation

Poor precision in statistics  is a sign of bad work.   It is often argued that poor precision works in favor of the provider because the lower side of the confidence interval is chosen for the over payment demand number.

  • Using a confidence interval to adjust for poor precision is not good statistics practice.
  • Insist that the contractor meet the Federal precision standards that were published in the Federal Register.

DO NOT Ignore all aspects of the extrapolation’s statistical methodology

The statistical work is much more than simply the sample taking and calculation of the extrapolation.   ALL of it has to be checked.

  • In addition, there are a number of PIM rules that must be complied with.   Check what was done against each and every one of the PIM rules and that they were followed in every detail.

Breaking a single PIM rule is often is overlooked, but if there are a substantial number of violations, then it helps build the case that the statistical work is not to be trusted and the appeal will be decided in your favor.


Winning Medicaid Audit Appeals

Winning Medicaid audit appeals (or MIC audits), often depends on the statistical extrapolation which determines how much you will owe in claims.

Medicaid Audit Appeals are very similar to the process in Medicare, but with some important differences explained here.

As with a Medicare Appeal,  one of the most important parts of the review process is the Medicaid Audit Statistical Extrapolation, which based on the review of a small number of billing claims, is applied to all of your claims for a number of years.

It’s the extrapolation of the error rate of the claims that pushes the amounts so high.

Barraclough’s Litigation Strategy is to show that the extrapolation is incorrect. We disprove the validity of the statistics in your favor, so the amount you owe is either nothing or significantly less than originally asked for.

Please read our previous blog, Winning Medicare Audit Appeals for information on Medicare Appeals and the Barraclough Litigation process.

Medicaid vs. Medicare Audits

Here’s a  comparison between Medicare and Medicaid Audits. It’s important to note that since each State has different regulations, a health care provider may have a better chance of winning an appeal in the Medicaid area than in the Medicare process.

Medicaid and Medicare Audit Differences

Medicaid Chart-JFA Revised 2

The Barraclough Advantage for Winning Medicaid Appeals

Credentials matter in MIC audit appeals because rules apply to expert witnesses, and it is in Medicaid audits that  statistics can really make a difference. Barraclough’s expert team of statisticians is a significant asset in all appeals, but this is particularly true in MIC audit appeals.

Statistical examinations are different for the 50 States. Some States have very specific rules about how the statistics work. Barraclough will meet all of these State statistical requirements.

Local expertise is important since rules differ from State to State the rules regarding statistics and how the audits are done.  Barraclough has worked in many States and has the local knowledge, including the knowledge from previous cases

A strong discovery process is a key in winning a MIC audit appeal. With each State, discovery can be used as a tool to defeat the audit results.

Medicaid Audit Process Background

Medicaid Integrity Contract (MIC) audits are  conducted by private companies under contract to the Medicaid Integrity Group (MIG) of CMS.

MIC audits are contracted by CMS and paid under that contract. This is unlike Medicare RACs which are paid based on the amount of money in improper payments they identify.

Like the Medicare RACs, the  MIC audit utilize sampling and extrapolation. MIC audit sampling and extrapolation decisions take into account the circumstances of the particular audit and the laws and regulations of the State to which the provider submitted its Medicaid claims. Audit look backs are allowed for up to five years.

The MIC audit will use a variety of data during the audit process, including, but not limited to, Medicaid claims data, recipient medical records, and other provider records.

The States are responsible for collecting over payments from providers.

The MIC Audit Process

  • MIC auditors perform field audits and desk audits.
  • The MIC auditor prepares a draft audit report, which is first shared with the State and  then with the provider.
  • The State and the provider each have an opportunity to review and comment on the draft report’s findings. CMS will consider these comments and prepare a revised draft report.
  • CMS allows the State to review the revised draft report and make additional comments. CMS then finalizes the audit report, specifies any identifies overpayment, and sends the final report to the State.

The State will then pursue the collection of any overpayment in accordance with State law. Providers have full appeal rights under State law.

MIC auditors can examine:

  • Provider financial records
  • Client medical records
  • Employee records
  • Provider appointment books
  • Any other applicable records related to services billed to the Department

MIC audits may review claims looking back up to 5 years.

For More Information