HRSA Compliance Exposes Hospitals to Liability and Fines
By Greg Freeman
The federal government is auditing claims reimbursed under a special program to pay for the COVID-19-related care of uninsured patients. Providers who received funds should ensure they complied with program requirements.
- Noncompliance could lead to administrative and civil liability and criminal fines.
- The Health Resources and Services Administration has paid approximately $18 billion in claims for uninsured COVID-19 care.
- The Office of Inspector General and the Department of Justice are focusing on COVID-19-related fraud.
The Health Resources and Services Administration (HRSA) program that reimbursed providers for COVID-19-related treatment for uninsured patients was instrumental in helping hospitals survive the pandemic without excessive financial losses. But the federal government is looking at how that money was obtained and whether it was spent properly.
The COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured program came with many requirements to receive funding. Noncompliance could expose healthcare organizations to administrative and civil liability as well as criminal fines.
Any organization that participated in the program and submitted claims should take a close look at whether they complied with its terms, conditions, and program guidance, says Judith A. Waltz, JD, partner with Foley & Lardner in San Francisco. If noncompliance is found, the provider should investigate options for remediation.
HRSA has paid approximately $18 billion in claims for uninsured COVID-19 care, Waltz notes. That includes $11.4 billion for testing, $5.85 billion for treatment, and $1.6 billion for vaccines.1 HRSA recently stopped accepting claims for uninsured COVID-19 expenses.
Participants should expect enforcement action related to the program because the HHS Office of Inspector General is conducting an audit in fiscal year 2022. The Department of Justice also has made COVID-19 a high priority for enforcement.
“We have to assume that they are going to be exercising a high level of scrutiny, if for no other reason than it’s just such a huge amount of money. People are going to be asking if it paid for what it was intended to pay for,” Waltz says. “It’s like the elephant in the room. You can’t help looking at it.”
Where to Look for Potential Problems
Waltz says there are four areas in which program participants should be especially careful about confirming compliance:
• Were the claims for medically necessary services? The HRSA program paid for testing, vaccines, and related services.
Testing and vaccines are pretty straightforward, but Waltz says there may be more compliance risk with “related services.” These may include physician visits related to testing and vaccine administration.
“A lot of models, particularly early on, relied on a doctor or nurse practitioner visit either on site or by telehealth. Under some rules and guidance from CMS and AMA [American Medical Association], it was confusing what you could bill for,” Waltz explains. “There were questions about the complexity of the visit. In retrospect, it seems odd to even require a doctor visit for a test. But in those early days, it did require some medical input and judgment.”
Documentation also can be an issue when showing medical necessity. For example, pop-up sites providing testing may have been too overwhelmed to keep thorough records.
“There was a lot of chaos and confusion going on at that point. Some claims, in retrospect, may have said medically necessary when now we would look at them and think differently,” Waltz says.
HRSA reimburses for testing prompted by exposure, symptoms, or “other.” That last category is open to interpretation. HHS, the Department of Labor, and the Department of the Treasury indicated payers were not required to provide coverage for testing for employment. Waltz says it is possible that reasoning would apply to the HRSA uninsured program, meaning those tests are not medically necessary. Guidance to commercial payers also indicates they are not obligated to pay for testing required for travel.
“It’s unclear if there is going to be a focus on the diagnoses. That’s an open question at this point,” Waltz says. “If someone uses the diagnosis code for exposure, how much diligence are they going to expect in confirming that? Going to the grocery store could be considered exposure, but is that enough? Or, are they expecting that the provider should have investigated how and when the person was exposed?”
Also, Waltz notes there has been at least one settlement by a provider who received reimbursement for treatment provided to patients who did not have a primary diagnosis of COVID-19.
Ensure Patient Was Uninsured
• Was the patient uninsured? The program required providers to certify to the best of their knowledge the patient was uninsured at the time of treatment. How much the provider needed to investigate is not entirely clear, but failure to determine the insurance status could create liability for the provider.
“Just like the Medicare secondary payer [MSP] rules, I would expect the government to look at whether these people actually were uninsured, or that the providers did some sort of due diligence before just assuming they were uninsured,” Waltz notes. “I think simply asking if they have insurance buys a lot of protection because the MSP guidance says the provider can rely on what the beneficiary told them, even if it turns out to be wrong.”
If the patient said he or she carried insurance that might cover the COVID-19 expenses, then the provider was obligated to follow through and investigate.
“It’s a pretty low bar to just ask and accept what the patient says regarding insurance availability. As long as you asked and the patient said there was none, I don’t think you will be held liable if there was insurance that would cover these expenses,” Waltz says.
• Did the facility balance bill patients? The program prohibited balance billing or any type of cost-sharing for services reimbursed by the HRSA program. If uninsured patients were charged for COVID-19 services before the provider joined the program and received reimbursement, those payments must be refunded, Waltz notes.
• Did you receive HRSA reimbursement for costs reimbursed by others? When joining the program, participants had to agree they would not seek reimbursement for expenses other sources were obligated to pay.
Any healthcare organization that received reimbursement through HRSA would be prudent to audit those claims for compliance risks, Waltz says. Even if everyone involved acted with the best intentions at the time, it is possible mistakes were made and expectations were misunderstood.
HRSA reimbursement would be subject to False Claims Act prosecution. “Particularly if you received large amounts of HRSA money, it is a good idea to look at what you have in your files and the documentation you could provide to support those claims,” Waltz says. “I think this is going to catch a lot of people by surprise. I do think we’re going to see a lot of sad situations where people just messed up, couldn’t tell what to do in those confusing times, and in retrospect, they did it in a way the payer is not going to be happy with.”
- Judith A. Waltz, JD, Partner, Foley & Lardner, San Francisco. Phone: (415) 438-6412. Email: [email protected].
The Health Resources and Services Administration program that reimbursed providers for COVID-19-related treatment for uninsured patients was instrumental in helping hospitals survive the pandemic without excessive financial losses. But the federal government is looking at how that money was obtained and whether it was spent properly.
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