Practice Management Alert

There’s no such thing as a Medicare windfall, so send any overcompensation back pronto.

One of the scariest realizations is a long-running mistake, especially where billing and payments are concerned. If you aren’t in the habit of imagining nightmare scenarios, consider this: Your practice does its due diligence with an internal audit and someone on staff realizes that you’ve been overpaid for services you incorrectly billed. And the too-generous payer’s identity? Medicare.

If you ever find yourself battling overpayment obstacles, you’ll need to act quickly, so strategize now so you’re prepared for that worst-case scenario.

Context: In 2016, CMS mandated the timeline associated with Medicare overpayments, using language and guidance from both the Fraud Enforcement Recovery Act of 2009 and the Affordable Care Act (ACA) of 2010. The payback rules outlined by the agency indicate that the liability falls on the provider, whether the overpayments resulted from intentional fraud or an honest mistake.

“This is true even if there is only suspicion of the error,” said Michael D. Miscoe, JD, CPC, CPCO, CPMA, CASCC, CCPC, CUC, president of Practice Masters Inc. and founding partner of Miscoe Health Law in Central City, Pennsylvania, during his presentation at AAPC’s HealthCon in April. Even a general letter from the government about problem codes being used incorrectly across specialties, which might not mention any specific practice by name, is suspicion enough, Miscoe notes, and should prompt practices to audit their records and repay any obligations.

Use These Guidelines if You Discover Overpayment

Miscoe outlines three steps that every practice needs to go through in order to become compliant when it is overpaid for services:

1. Reimburse the extra money — ASAP. CMS rules stipulate a 60-day limit on returning overpayments to federal agencies. And while the rule might seem simple, you’ll want to ensure you comply since compliance failure could lead to huge penalties.

As Miscoe puts it, regardless of fault, and regardless of whether the overpayment was full (in the case of claims that were not medically necessary or covered) or partial (in the case of upcoding or an incident-to reporting error), the practice must return the money immediately. “Medicare’s default position,” in Miscoe’s estimation, “is, ‘we want our money back.’”

Understand why: The 60-day rule is designed to keep practices honest and on top of their auditing and accounting. While many practices may have occasional overpayment issues, everyone should have safeguards in place (like regular auditing) to make sure the issue does not become routine within your practice.

2. Trace the issue back to its roots. Once your practice has returned the initial overpayment, you have a six-month window to conduct “reasonable diligence to determine whether there are more overpayments on the same issue,” according to Miscoe. This will involve going back six years in the case of an internal audit, though contractors are only obliged to go back five years.

3. Be honest in your accounting and return any additional overpayments that are uncovered. After you perform a comprehensive audit of your billing practices, any overpayments you discover should then be refunded to CMS within the 60-day window. In addition, CMS goes with the assumption that you will fix any and all underlying problems to avoid future overpayments.

Important:  The clock starts ticking on the date the issue is discovered, not the date of service or payment.

Additionally, Miscoe recommends that practices report “how the overpayments were identified and quantified, and what corrective measures they have implemented” to correct the issue.

In Miscoe’s estimation, it is this last step that will show that your practice is acting in good faith. “If you have a culture of compliance and errors are found,” Miscoe explains, “evidence of the culture — the continuous process of risk analysis, evaluation, and re-evaluation through internal audits — will be in your favor.”

It’s a position that Kent Moore, senior strategist for physician payment at the American Academy of Family Physicians, wholeheartedly endorses. “Ideally,” Moore argues, “periodic internal self-audits involving a sample of claims should be standard operating procedure within the practice, not just a result or consequence after a problem is identified.”

Hint: If your practice does find evidence of overpayments, Moore advises that you have “some explanation of how the practice identified the overpayment and, if applicable, what steps the practice is taking to avoid such overpayments in the future. This can help demonstrate the positive intent of the practice and show that the practice is a responsible part of the health plan’s network.”

Dealing with any overpayments quickly is important because you could be looking at penalties related to the False Claims Act (FCA) or the Civil Monetary Penalties Law (CMPL) if federal agencies discover that you knew about overpayments and failed to repay them promptly.

Worst case scenario: Your practice could be excluded from all federal healthcare programs if the evidence shows you didn’t follow through and repay the extra cash.

Discovering overpayment could be a very scary moment, and realizing that your practice has had routine overpayments from Medicare may seem insurmountable. However, this is the kind of issue that would only get worse if ignored, so set your accounts to right as quickly as possible.

Resource: Check out the MLN booklet on Medicare overpayments at www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/OverpaymentBrochure508-09.pdf.