Primary Care Coding Alert

Voluntary disclosure rules best followed by proactive practices, say experts.

Your office conducts an internal audit that reveals Medicare has overpaid your practice thousands of dollars for services that you have incorrectly billed. A letter from Medicare claims that your practice owes a substantial amount of money for reimbursements that they have overpaid.

These are nightmare situations that no primary care practice wants to encounter. But what do you do if the unthinkable happens to you?

We posed that question to our experts, and here’s what they had to say.

Background

Both the Fraud Enforcement Recovery Act of 2009 and the Affordable Care Act (ACA) of 2010 make it very clear that a provider is liable for any overpayments received, whether they be as a result of 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.

You Find You’ve Received an Overpayment. What Now?

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

1. Return the money. The ACA requires providers to voluntarily disclose and repay all monies within a 60-day period after the suspected error has been found. 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.’”

2. Conduct an internal audit to determine the cause of the problem. Once the practice has returned the initial overpayment, it has 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. Report and return any other monies found in the audit. Practices then have an additional two-month period to repay other overpayments that the audit may have uncovered. 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.”

So, Moore says, if your practice does find evidence of overpayments, “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, can help demonstrate the positive intent of the practice and show that the practice is a responsible part of the health plan’s network.”

What Happens if You Don’t Comply?

Not only will you have to return the money, but “failure to satisfy the obligation is a violation of the False Claims Act,” explains Miscoe, that can result in “damages and punitive sanctions” and “expose the provider to substantially more liability over and above the overpayment amount.”

Additionally, failing to satisfy the obligation can also result in an investigation by the Office of the Inspector General (OIG). Not only can the OIG can seek further civil monetary penalties, but it also has the authority to exclude an individual or entity from participating in a federal health care program, either for a period of time or indefinitely.

“This is why we have to have compliance,” argues Miscoe. “While formal compliance programs are still not required for most provider types,” Miscoe says, effective compliance efforts will help practices “avoid the accusation of failing to exercise reasonable diligence in the identification of overpayment. The costs,” Miscoe concludes, “are too great otherwise.”

(For further information on the Centers for Medicare and Medicaid Services Self-Referral Disclosure Protocol (SRDP), go to https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Self_Referral_Disclosure_Protocol.html).