Handling Potential Overpayment and "Voluntary" Refund Situations

Transcription

1 Handling Potential Overpayment and "Voluntary" Refund Situations Timothy P. Blanchard, MHA, JD American Academy of Professional Coders 2011 National Conference April 4, Blanchard Manning LLP. Session Objectives Handling potential overpayments has become more challenging with recent changes in federal health care and false claims law. This session will address: Recent changes in the law Evaluating provider refund obligations Audit design considerations Sampling/extrapolation vs. claim-by-claim Documenting compliance reviews Working with counsel and consultants 1

2 Legislative Changes Fraud Enforcement and Recovery Act (2009) Expanded False Claims Act (FCA) liability to knowingly and improperly avoid[ing] or decreas[ing] an obligation to pay or transmit money to property to the Government Obligation is defined to include an established duty arising from the retention of any overpayment PPACA (March 23, 2010) Amends Social Security Act New Medicare and Medicaid requirement 42 U.S.C. 1320a-7k(d), 1320a 7a(a)(10) PPACA Amendment Requires Providers to: (A) report and return the overpayment to the Secretary, the State, an intermediary, a carrier, or a contractor, as appropriate, at the correct address; and (B) notify the Secretary, State, intermediary, carrier, or contractor to whom the overpayment was returned in writing of the reason for the overpayment. Deadline for reporting/returning g is the later of (A) the date which is 60 days after the date on which the overpayment was identified; or (B) the date any corresponding cost report is due, if applicable. 2

3 PPACA Amendments - Key Terms Overpayment means any funds that a person receives or retains under title XVIII [Medicare] or XIX [Medicaid] to which the person, after applicable reconciliation, is not entitled Person means a provider of services, supplier, Medicaid managed care organization, Medicare Advantage organization, or PDP sponsor, but not a beneficiary Knowing/knowingly includes reckless disregard Identified is NOT further defined Enforcement of PPACA Refunds Any overpayment retained by a person after the deadline for reporting and returning the overpayment... is an obligation [under FCA] False Claims Act exposure OIG sanctions against anyone who: knows of an overpayment (as defined ) and does not report and return the overpayment in accordance with the PPACA amendments Civil Money Penalties Permissive Program Exclusion 3

4 Mandatory Voluntary Refunds By voluntary, we mean not in response to a government overpayment demand letter Under PPACA, refunds are now mandatory Not refund OR report (as under prior law) Report and Return and Notify (of reason) All within 60 days of identification Failure to meet the deadline renders the overpayment an obligation under the FCA East Tennessee Heart Consultants Settlement Physician Group Practice first enforcement action against a physician group for failing to repay overpayments (January 2007) Alleged to have retained overpayments unless specifically asked by a payer or patient Criminal charges (Health Care Fraud) Pretrial diversion agreement (PDA) $2.9 million in civil penalties and restitution $1 million refunded to 11,220 patients $200,000 refunded to private health plans 8 4

5 Evaluating Potential Overpayments Is there really an overpayment? Not all billing/documentation errors cause overpayments Was the overpayment the result of mistake, error, or fraud, or reckless disregard? Does the provider have a valid appeal position regarding the potential overpayment issue(s)? Were there both under- and overpayments? Can the problem resolved through corrected or amended claims (adjustment bills)? Is provider under a CIA or CCA with OIG? Audit Design Considerations Applicable payment policy issues and implications Nature of the billing errors, documentation deficiencies or other noncompliance Claim-by-claim vs. sampling/extrapolation Sample size / stratification Auditing capacity (internal or consultant) Technical qualifications Independence Timeliness Expert advice/opinions (e.g., physician reviewer) 5

6 Calculating Amount Overpaid Consider alternate theories/approaches Ensure quality of data and accuracy of calculation Calculation of overpayment/refund amount Individual claims or extrapolation Net Financial Error Rate (NFER) Statistical issues and arguments No extrapolation if NFER under 5% (based on CIA provisions) Use OIG s RAT-STATS software Sample size to yield adequate precision for refunding based on the lower bound of a 90% confidence interval 11 Sampling and Extrapolation Probe samples Net Financial Error Rate under 5% Sampling unit (e.g., g claim, provider, admission) OIG RAT-STATS program Sample size and stratification determinations Defining the universe and period of review Stratification considerations Confidence intervals (90%, 95%) Refunding the lower bound vs. point estimate Level of precision 6

7 Period of Review Particular facts and circumstances What the provider knows or should know? Reopening period implications Regulations define the period Medicare can review for overpayment recovery of claims Within 4 years for good cause Any time if determination was procured by fraud or similar fault Evaluate cause -- mistake, error, fraud, reckless disregard Statute of limitations (6 years, 28 U.S.C. 2415) Additional Period of Review Considerations Consider state law limitations regarding private insurance and health plan claims For example: California Insurance Code (b) Overpayment requests must be made within 365 days of the date of payment on the overpaid claim Unless the overpayment was caused in whole or in part by fraud or misrepresentation on the part of the provider 28 Cal. Code of Regulations (b)(5) 14 7

8 Documentation and Disclosure Issues Identification of the potential overpayment Follow-up regarding the reported issue Audit and internal investigation findings Legal advice regarding conclusions Quantification calculations Sampling and extrapolation (if any) Communication w/ payers/contractors/patients p Corrective action(s) to prevent reoccurrence Policy and procedure changes Discipline of responsible personnel Cover Letter Transmittal Identification of provider(s) Provider Numbers, NPI Nature of the issue Summary of the investigation undertaken Summary of calculation methodology Overpayment Refund Form information Individual claims vs. extrapolations Additional corrective action by provider Future commitments (?) 16 8

9 Working with Counsel / Consultants Protecting attorney-client privilege regarding review of potential overpayments Confirming overpayment conclusions Confirming provider s rights/responsibilities Use of outside billing/coding consultants Appropriate roles and responsibilities Sampling and review or review only Review of consultant t findings Physician consultants Internal or outside resources Qualifications and independence Evolving Voluntary Refund Issues Effect of prior voluntary refunds on RAC audits Individually refunded claims Extrapolated repayments Impact of voluntary refunds on FCA cases Pending under seal Unfiled cases Co-payments and deductibles (?) Individual claims vs. extrapolations 18 9

10 Case Studies Evaluation & Management services Place of Service coding Units errors DRG validation Medical necessity issues Patient status (inpatient, outpatient, observation) Stark Law and Anti-kickback violations Excluded individuals Quality of care / Conditions of Participation Case Study: E&M Levels Case Study Multi-specialty group practice 150 physicians and NPPs Biller reports a spike in high-level services by a particular physician Monitoring of E&M services through physician profiles by specialty and individual provider Spike noted in high-level services for certain providers in certain specialty areas: Cardiology Neurology Urology 10

11 Case Study: Place of Service A billing audit reveals that all of a group s physician services are billed with POS 11 Coder recognizes that some documentation is from the outpatient department of a local hospital Clinic visits and diagnostic interpretation services Further review reveals Nurse Practitioner services furnished in the hospital outpatient department have been billed by the group Case Study: Units Errors Review of Neulasta (J2505): Claims in hospital outpatient department reveals billing by the number of milligrams administered Watch minimum billing increment requirements For J unit = 6mgs See Medicare Claims Processing Manual, Transmittal 949 (May 12, 2006) Review of blood transfusions: Billing records review for some patients reveals that multiple units of blood transfusions have been billed on the same date of service See Medicare Claims Processing Manual, Ch. 4,

12 Case Study: MS-DRG Validation RACs doing DRG coding validations to confirm: Principal diagnosis Secondary diagnoses Procedures That diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician i description and the information contained in the beneficiary's medical record. Case Study: Medical Necessity Whistleblower asserts that Dr. Cutsalot does unnecessary surgeries on a regular basis Suppose you work for: Cutsalot-Ohrnot PC, a medical practice Community General Hospital where Dr. Cutsalot and Dr. Ohrnot have privileges and an active surgical practice Surgery-on-the-Go, a local ASC, where Dr. Cutsalot also frequently does procedures 12

13 Case Study: Patient Status Inpatient vs. Outpatient /Observation Benefit Policy Manual, Ch. 1, 10: Complex Medical Decision Program Integrity Manual, Ch. 6, 6.5 signs and/or symptoms severe enough to warrant the need for medical care... of such intensity that they can be furnished safely and effectively only on an inpatient basis beneficiary's medical condition, safety, or health would be significantly and directly threatened if care were provided in a less intensive setting inconvenience to beneficiary or family does not, by itself, justify inpatient admission Proper use of screening criteria (e.g., InterQual ) 25 Case Study: Stark Law Overpayments According to 42 C.F.R (d): An entity that collects payment for a designated health service that was performed pursuant to a prohibited referral must refund all collected amounts on a timely basis 42 U.S.C. 1395nn(g)(2) provides: If a person collects any amounts that were billed in violation of [the Stark Law], the person... shall refund on a timely basis to the individual, id any amounts so collected (emphasis added) Note: Unlike Stark, anti-kickback violations do not result in overpayments under current law

14 Stark Law Overpayments Are you sure you have a violation? Period of Disallowance? 42 C.F.R (c)(1); 73 Fed. Reg. at (Aug. 19, 2008) Who to report/refund to? Refund to Medicare Payment Contractor CMS Self-Referral Disclosure Protocol (SRDP) _Protocol.asp OIG SDP option (if also reporting AKS issue) Local USAO or DOJ 27 Case Study: Anti-Kickback Statute Issues Do AKS violations cause overpayments? Nothing in the AKS indicates that violations affect the propriety of payments for otherwise proper services But consider CMS 855 Form, 2001 revisions Certifying provider s understanding that claims are conditioned upon the claim and the underlying transaction complying with such laws, regulations, and program instructions (including, but not limited to, the Federal anti-kickback statute and the Stark law). No case law regarding this certification theory Consider self-incrimination implications 14

15 Case Study: Excluded Individuals Were services ordered, provided, or supervised by an excluded individual? Did the provider fail to identify an excluded individual employed or engaged by the provider? Excluded physician or NPP vs. nurse or technician Consider arguments for limiting the scope of refunds Consider alternative overpayment calculations Self-disclosures may be more effective since there may be civil money penalty exposure beyond overpayment refunds 29 Case Study: Quality of Care Issues Is the issue failure to furnish services of quality meeting recognized standards of healthcare? Quality and economy are conditions of participation, not requirements for payment. See U.S. ex rel. Mikes v. Straus, 274 F.3d 687 (2d Cir. 2001); U.S. ex rel. Conner v. Salina Regional Health Center, Inc., 543 F.3d 1211 (10th Cir. 2008) (distinguishing CoP from conditions of payment notwithstanding annual cost report certification). Is the issue incomplete compliance with other conditions of participation (CoP) requirements? Was provider certified? Was patient abuse or neglect involved? Were the services essentially worthless? 30 15

16 Final Recommendations Do not panic Don t rush, but don t delay Document the plan and intentions ti Be careful evaluating arguments and designing statistical reviews Don t jump to conclusions Remember the big gpicture Follow up on corrective action (documentation) Do not waste the educational opportunity 31 Questions Timothy P. Blanchard a Blanchard Manning LLP tim@blanchardmanning.com 32 16