Radiology Coding Alert

Identify overpayment, check time frame, and return if you received surplus.

CMS has shifted the responsibility of identifying payment errors on providers and suppliers. Are you regularly checking your payments for errors? If not, now is the time to intervene.

CMS rule: Earlier this year, the Centers for Medicare and Medicaid Services (CMS) has published a final rule clarifying the requirements overpayments under Medicare Parts A and B. The rule adequately describes:

• What overpayment identification requires
• What is the look-back period is for identifying overpayments, and
• How providers and practices can report and return the overpayment to CMS.

According to CMS, “Providers and suppliers have a clear duty to undertake proactive activities to determine if they have received an overpayment or risk potential liability for retaining such overpayment.” You can read more the rule at: http://federalregister.gov/a/2016-02789.

Providers lend themselves to penalties and exclusion from federal health care programs for any noncompliance with the CMS requirements for overpayment.

Make Sure You Can Identify Overpayment

Irrespective of the provider liability, the following are considered as overpayment:

• Increased reimbursement due to errors
• Inclusion of non-reimbursable expenditures in cost reports
• Duplicate payments
• Medicare payments for non-covered services
• Medicare payments in excess of the allowable amount for an identified covered service
• Receipt of Medicare payment when another payer had the primary responsibility for payment.

The rule specifies that someone has “identified” an overpayment when a provider of services, supplier, Medicaid Managed Care Organization (MCO), Medicare Advantage (MA) organization, or Prescription Drug Plan (PDP) sponsor “has or should have, through the exercise of reasonable diligence, determined that the [entity] has received an overpayment and quantified the amount of the overpayment.”

Time Frame and Look-Back Period is Key

According to CMS, money should be refunded 60 days after the overpayment was identified or on the date when the cost report, if any, is due. Providers and suppliers are responsible for spotting overpayments within six years from the date they were received. This is a revision from the 10 year rule that existed earlier.

Return if You Received Extra

To return any identified overpayment, your provider can submit a self-reported refund or resort to one of the familiar established options claims adjustment and credit balance. The deadline for repayment (principal plus interest) may be extended if overpayments are reported through the Self-Referral Disclosure Protocol (CMS) or the Self-Disclosure Protocol (OIG).

Course of action: To keep up diligence, make room for proactive actions ensuring compliance. Review payment errors in detail. Plan regular audits. Regular evaluation of your EOBs (Explanation Of Benefits) is important to identify both overpayments and underpayments.