How and when to report overpayments
How and when to report overpayments
Given the complexity of Medicare regulations and the sheer number of claims providers submit, overpayments are virtually inevitable, warns Steve Ortquist, director of corporate compliance at Rush-Presbyterian St. Luke’s Medical Center in Chicago. "From time to time, errors are going to occur that we have to deal with," he says. The question is what to do about those overpayments.
Risk assessments, auditing, and monitoring aimed at uncovering errors alone are not the answer, Ortquist warns. If those systems are working effectively and overpayments are uncovered, providers then must determine whether they can make a routine return of the overpayment or make a voluntary disclosure.
"People think that simply because they are holding an overpayment, they have to go to Office of Inspector General [OIG] or Department of Justice [DOJ], when in fact it may be entirely appropriate to make those refunds directly to the intermediary or carrier," Ortquist argues.
Ryan Meade, a health care attorney with Katten Muchin in Chicago, says the legal obligation can be boiled down to a simple principle, which is that a provider must return money that is not owed to it. "But most first-blush’ simple legal principles tend to be anything but simple when you really start looking at them," he warns.
Meade points out that the term "overpayment" by itself doesn’t mean much, because overpayments can result from anything from simple technical errors to intentional fraud. "In some respects, the obligation to return the money does not have much to do with how you got the money," he says. However, a provider’s response may carry its own administrative, civil, or criminal liability. In short, providers can turn civil liabilities into criminal penalties by not returning the money, he explains.
Ortquist notes that the OIG’s Provider Self-Disclosure Protocol covers situations that potentially violate criminal, civil, or administrative law and distinguishes those from situations involving overpayments and errors, which can simply be returned to fiscal intermediaries (FIs) and carriers. But he says that document primarily deals with non-routine matters. Unfortunately, there is little guidance beyond that, he adds.
Worse yet, Ortquist says that a recent review of five large FI web sites turned up no specific guidance on how to handle overpayments. "That sets up a situation where providers are forced to engage counsel," he says.
Ortquist says providers should be aware of HCFA’s "Procedures for the Benefit Integrity and Medical Review Units on Unsolicited/Voluntary Refund Checks," which instructs FIs not to return repayments to providers and outlines the procedures FIs must follow.
Another relevant guidance is the Health Care Financing Administration’s (HCFA’s) Overpayment Refund Form. But Ortquist cautions that there is considerable discussion among outside counsel on whether providers should use this form in making repayments.
Nevertheless, providers contemplating the return of an overpayment should look at these documents, he argues. "I can tell you from experience that when an intermediary receives an overpayment return, they do look to this guidance, and they expect providers to be able to provide the information discussed in these program memorandum," he says.
Meade warns that providers must be aware that, in addition to general criminal laws that obligate them to return government funds not owed to them, there are specific health care laws that address this issue. "There are no easy guidelines for determining when to return overpayments directly to intermediaries and carriers as opposed to making a voluntary self-disclosure to the OIG or DOJ," he says.
While general laws do not explicitly refer to an obligation to return overpayments, the statute does prohibit providers from concealing or failing to disclose the fact that they submitted claims for reimbursement they were not owed, or otherwise "converting" those funds to private use.
Providers often forget they also have an obligation to return money to commercial plans, adds Meade. The "Theft or Embezzlement in Connection with Health Care" statute effectively expands the concept from government-funded health care programs to all health care benefit plans, he explains.
Finally, providers should not forget about state fraud laws along with a growing number that have their own qui tam provisions on the books. Meade says that most states have adopted laws criminalizing health insurance fraud and have criminal conversion laws consistent with the federal conversion prohibition.
In general, Meade says it is best for providers to return directly to intermediaries and carriers any overpayments that can be identified as small and isolated and do not appear to be the result of errors carrying false claims liability. "But such an identification is rarely simple," he cautions.
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