Medicare Compliance & Reimbursement

Watch out: Medicaid claims may face greater scrutiny in the coming year.

Are you hanging on to a Medicaid overpayment and maintaining it as a credit balance? The OIG may want to chat with you in 2012.

The HHS Office of Inspector General (OIG) has some big plans next year for reviewing your Medicaid claims, and they span the whole spectrum of issues, according to the OIG's 2012 Work Plan, released on Oct. 5. Get to know these hot buttons before you press them with the following information on where the OIG will be focusing its efforts next year.

When you receive an overpayment from Medicaid, you are expected to send it back -- the amount of time you can spend before you refund the money varies from state to state, but if you are aware of an overpayment, you must pay it back. And the OIG is looking for practices that haven't been holding up their end of that deal.

"We will review patient accounts of providers to determine whether there are Medicaid overpayments in the accounts with credit balances," the Work Plan indicates. "Previous OIG work found Medicaid overpayments in patients' accounts with credit balances. Medicaid is the payer of last resort and providers are able to identify and refund overpayments received."

Translation: All other available payers "must meet their legal obligation to pay claims before the Medicaid program pays for the care of an individual eligible for Medicaid," CMS says in its "Third Party Liability Overview." Therefore, if you erroneously bill Medicaid first, and then another payer reimburses you for what Medicaid has already paid you, you must repay Medicaid that amount.

Expect your Medicaid program to be more diligent than ever about denying claims based on National Correct Coding Initiative (NCCI) edits. The OIG's 2012 Work Plan identifies this as an area it intends to scrutinize in the coming year.

"Federal law requires states to incorporate compatible methodologies of the NCCI for Medicaid claims filed on or after Oct. 1, 2012," the document notes. "States were permitted to deactivate some or all NCCI edits because of conflicts with state laws, regulations, administrative rules, payment policies, and/or the states' levels of operational readiness. As of April 1, 2011, lack of operational readiness was no longer a permissible basis for deactivation of the edits."

Translation: States that have been following a lax NCCI edit schedule will be asked to improve their compliance with the edits. This will most likely mean more denials if you've been reporting edit pairs together that the NCCI restricts. Keep an eye on your NCCI files and ensure that you are only separating NCCI bundle pairs when medically necessary and when the bundle allows you to use a modifier (such as 59, Distinct procedural service) to do so.

To read the complete OIG Work Plan, visit http://go.usa.gov/93X.