I retired from practice about three years ago and sold the practice. Now the DME MAC (CGS) agency is auditing me, saying I owe a substantial amount of money back for AFOs, CAM Boots and surgical dressings. Most of this has to do with I’s not being dotted and T’s not being crossed. I do have proof of delivery for all but one claim. I have access to the records from the new owner, but I am wondering if I need to respond to this and pay back any money.
One would think that once you retire, you can go off into the sunset and not have to worry about the long arm of the insurance industry. Unfortunately, this is not the case.
Your scenario is unfortunately all too familiar and presents several issues needing immediate attention. This column is assuming this is a routine post payment audit being conducted by the DME MAC, CERT or RAC and not a criminal investigation being conducted by the UPIC, HHS, OIG, etc.
Unlike when you were in practice, you may be on your own to hire legal counsel, an expert witness and an accountant because your tail coverage likely will not cover Administrative Defense Coverage during retirement. Step one is to check with your former professional liability carrier. If you are like most retirees, you may have to self-fund your defense. Don’t pull the trigger to refund the carrier as they may then see you as “easy pickings” for extrapolation and the refunds and legal challenges could get increasingly costly.
- According to many attorneys, your former practice tax structure is critical in determining liability. If you were in solo unincorporated practice or your PC or LLC is still active on the tax role, then you or the corporation “may” still be responsible for paying the money back. If, however, you were in incorporated practice and the corporation no longer exists, that is it has been taken off the IRS roles and is defunct, it is possible that the auditing agency is powerless to take any funds back. The reason being that the entity paid no longer exists. You, the individual, despite being the owner (assuming >5% ownership) are a separate entity. If the recoupment is not based on criminal charges, it is possible that recoupment may be beyond the reach of the DMEPOS contractor. Only your attorney and accountant can advise you on your personal liability.
- The time factors are critical as to when you should have known you should not have been paid. The three-year statute of limitations is not simply based on the date of service, or when you were paid, but also a few months post when you “should” have known you should not have been paid. Most legal scholars will tell you that the statute of limitations can often be successfully challenged. Hence don’t hang your hat on a hard stop 3 years after the date of service or even your retirement date.
The two first steps are to contact your tail coverage company and both your accountant and your attorney. In most cases you will be on your own. In the rare circumstance that your tail covering company will provide you with free ADC, they will handle things for you and hire an attorney, an accountant and expert witness if necessary.
If you are on your own and your attorney and accountant determine that you are not personally liable, have both your accountant and attorney provide the necessary information to the DMEPOS and continue to enjoy your hard-earned retirement.
If it turns out that you are personally liable, no matter the tax structure, have your attorney, not you, contact the DMEPOS auditing agency. Hire an expert witness to review the charts and have your legal team attempt to mitigate the recoupment.
Having been personally involved as an expert in many such cases, most attorneys have been able to successfully reduce the total recoupment amount at an increased payback time with little if any interest.
If your charts are good to excellent, it is possible that the expert witness and your attorney may be able to get the carrier to totally back off or settle for a “slap on the wrist”. In one such case, this resulted in a $200 payback on an original demand of tens of thousands of dollars and a promise of no further extrapolation or audits.
To challenge missing proof of deliveries, patients’ statements years later attesting they previously obtained a device can successfully be used to challenge a claw back. Alternatively, charts showing that the patient was compliant with the device can often be used to challenge a deficiency in written proof of delivery.
Unlike with professional liability (malpractice) ultimately it is you (or your corporation) that will need to recoup any payments to the carrier.
Remember, the third-party payer also has costs associated with these audits. They too want to mitigate their costs. Hence settlements in these cases often result in the carrier settling for less than 25 cents on the dollar.
Last, these audits occur way more often in the non-DME world as well!
