The Mystery of Overpayment. Barbara J. Duffy, Shareholder, Lane Powell

Transcription

1 The Mystery of Overpayment 0 Barbara J. Duffy, Shareholder, Lane Powell Harold Malkin, Shareholder, Lane Powell Deborah Nedelcove Vice President Risk Management, Chief Compliance and Privacy Officer, Avamere Bill Ulrich President, Consolidated Billing Services, Inc. Agenda 1 Legal Liability; Compliance Officer s Role in Identifying Overpayments and Calculating the Repayment; Where to repay and how; 15 minute break; Case Studies. 1

2 2 Legal Liability for Retention of Overpayments Where We Are and How We Got Here False Claims Act, 31 U.S.C The False Claims Act ( FCA ), 31 U.S.C. 3729, originally enacted in 1863, but substantially amended in 1986, is DOJ s principal enforcement tool for recovery of civil damages resulting from false or fraudulent claims for payment to various government programs. FCA allows the government to recover treble damages and civil penalties per violation of between $5,500 and 11,000. FCA also authorizes and incentives private parties ( Relators ) to file lawsuits qui tam actions under the FCA on behalf of the United States. Qui Tam Actions: Action filed under seal alleging previously undisclosed/unreported violation of FCA. Statutorilymandated 60 day investigation by DOJ. Further seal extensions available with court approval. Government required to elect intervention/non intervention. DOJ policy is not to seek to dismiss action if intervention is declined. Relator s share = 15 25% or 25 30%. Relator who planned and initiated wrongdoing alleged in complaint may get as little as 0%; if Relator is convicted criminally for his/her role in an FCA violation, he/she shall be dismissed as a Relator and receive no share of any recovery. Relator may object to government settlement and court may hold hearing to determine if proposed settlement is fair, adequate and reasonable. 2

3 False Claims Act cont d 4 The so called reverse false claim provision of the FCA was amended in 2009, resulting in the imposition of liability on any person who, knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government. 31 U.S.C. 3729(a)(1)(G). A person acts knowingly with respect to information under the FCA when that person: Has actual knowledge of the information Acts in deliberate ignorance of the truth or falsity of the information; or Acts in reckless disregard of the truth or falsity of the information 2009 FCA amendments also filled a void in the statute by adding a definition of the previously undefined term obligation : [A]n established duty, whether or not fixed, arising from an express or implied contractual... or similar relationship, from statute or regulation, or from the retention of any overpayment. 31 U.S.C. 3729(b)(3)(emphasis supplied). Affordable Care Act ( ACA ) Overpayment Related Impact on The FCA 5 Section 6402(a) of the ACA, effective May 22, 2010, requires that a person receiving an overpayment must both report and return the overpayment to the appropriate government entity or contractor. The ACA further provides that an overpayment not timely reported and repaid constitutes an obligation [to pay money] for purposes of 3729(b)(3) of the False Claims Act. Person is defined as: a provider of services, a supplier, a Medicaid managed care organization, a Medicare Advantage organization and/or Medicare Part D Prescription Drug Plan. Overpayment is defined as: any funds that a person receives or retains under [Medicare and Medicaid] to which the person, after applicable reconciliation, is not entitled.... Deadline established for reporting and repayment of an overpayment: the later of the date which is 60 days after the date on which the overpayment was identified or the date any corresponding cost report is due, if applicable. But 60 days doesn t necessarily mean 60 days... 3

4 ACA Impact on FCA cont d 6 Left unsettled by ACA: When does the 60 day clock start running when is an overpayment considered identified? If an overpayment is identified, how far back in time does the obligation to report and repay go? What, if any, obligation exists to take steps to discover unidentified, potential overpayments? How should an overpayment be reported and repaid? CMS Rulemaking 7 CMS issued a Proposed Rule in February 2012 addressing the ACA s overpayment reporting and repayment provisions Public Comments, of which there were many, were due in April 2012 CMS issued a Final Rule governing Medicare Parts C and D on May 23, 2014 Final Rule for Medicare Parts A and B issued on February 11,

5 CMS Final Rule Clarifies when an overpayment is identified : A person has identified an overpayment when the person has, or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment. (Emphasis added.) 8 Reasonable diligence includes both proactive compliance activities conducted in good faith by qualified individuals to monitor for the receipt of overpayments and investigations conduced in good faith and in a timely manner by qualified individuals in response to obtaining credible information of a potential overpayment. Reasonable diligence an investigation lasting, at most, 6 months from receipt of credible information of a potential overpayment. 60 day deadline for reporting and returning overpayments could actually be up to 8 months up to a 6 month investigation following receipt of credible information plus up to 60 days from the date an overpayment is identified. CMS Final Rule 9 Clarifies the lookback period: Overpayments must be reported and repaid only if identified within 6 years of receipt of the overpayment. Comments underscore that providers have a clear duty to undertake proactive activities to determine if they have received an overpayment and not simply rely on reactive steps in response to credible evidence of an overpayment. Clarifies how properly to report and repay an overpayment: Use an applicable claims adjustment, credit balance, self reported refund or other appropriate process. If statistical sampling is used to quantify a reported overpayment, the overpayment report should describe the sampling and extrapolation methodology used. Reporting a self identified overpayment via formal self disclosure to CMS or OIG is considered compliance with the Final Rule, as long as the disclosing entity adheres to the respective self disclosure protocol. 5

6 Operations Issues with Management of Overpayments: Compliance Officer s Role 10 Identifying Overpayments 11 Typically, in Long Term Care we think of overpayments as falling into one of the following categories: At the time of service, the individual receiving the service was not eligible for Medicare or Medicaid; Medicare or Medicaid mistakenly paid as primary where another third party payer was properly primary; The payment amount was unintentionally miscalculated and excessive; The service did not fall within one of the statutory benefits or was subject to a statutory exclusions; or The service was not medically necessary. 6

7 Identifying & Responding to Overpayments 12 Depending on the overpayment situation, your response will vary but in all cases a thorough evaluation or investigation, as appropriate, of the situation is key. Obligation to make a reasonable inquiry with all deliberate speed. Audits of Overpayments must be part of a responsible compliance plan. Compliance Plan is required as Condition of Payment 13 Overpayment final rule requires reasonable diligence to include Proactive compliance efforts Periodic monitoring Reactive investigative activities Audits An active compliance program is required by the Affordable Care Act Written Policies and Procedures Program oversite Training and education Lines of communication Auditing and monitoring Consistent discipline Corrective actions Providers are required to have a Compliance Program in place 7

8 Compliance Plan & Overpayment Rule 14 A provider that receives an anonymous complaint through their compliance hotline Incurs a duty to timely investigate said compliant If complaints qualify as credible information of a potential overpayment Example: A housekeeper may be less credible complaining of therapist over billing While a therapist may be very credible complaining of therapist over billing Compliance Plan and Prevention 15 Preventive Measures 1. Eligibility Review 2. MDS Review 3. Therapy Review 4. Financial Folder Review 5. Claim Triple Check 8

9 Investigation and Look Back Period 16 The length of the look back should be based on identified factors that indicate when the problem started The nature of the overpayment and cause are factors in determining lookback period One time transaction Initiation of a new clinical service New employees New NCD/LCD Acquisition Computer change Statistical analysis may be used, but be careful Simple (no headache) Accidental double billing/duplicate Payment for patient not on service/admitted Billing after discharge Billing Medicare or Medicaid as primary when they are not Singular & unintentional miscalculation reimbursement Reconciliation problems Overpayments Moderate (Headache) Employee working on the OIG s exclusions database Lapsed Clinician Licensure Payments for non covered or excluded services Services not medically necessary RAC or other pre or post payment audit reviews Complicated (Migraine) Falsification of documentation Anti kickback violation Up coding or intentional incorrect billing Keeping payments for non patients Misrepresenting the amount owed Stark Violations Extended overpayment timeframe 17 9

10 Calculating the Overpayment Amount/Voluntary Refund: Simple ish 18 Accidental double billing/duplicate Payment receipt for nonpatient Billing after discharge Billing Medicare or Medicaid as primary when they are not Unintentional miscalculation of payment score Reconciliation problems Calculation Dollar for dollar refund identified to a specific patient Overpayment sent to contractor Move to complete any investigation to determine the scope and refund (reconciliation) within the 60 day requirement. Contractor usually has a form on their website or guidance for the discovery/disclosure letter. Calculating the Overpayment Amount: Not so simple 19 Payments for non covered or excluded services Services not medically necessary Pre or post payment audit reviews resulting in findings against the organization Calculation: Dollar for dollar refund identified to a specific patient or audited refund amount Move to complete any investigation to determine the scope and refund (reconciliation) within the 60 day requirement. Overpayment refunded to contractor (see previous disclosure information) 10

11 Calculating the Overpayment Amount: Big Headache Situations Overpayment situations that could require a Self Disclosure Conduct Involving False Billing/Improper claims Falsification of documentation Intentional miscoding Services that were not medically necessary Payments for non covered services Overpayment Resolution Conduct your investigation to estimate the improper amount paid by the Federal health care program (damages) and prepare a report. Estimation must consist of a review of all claims affected by the disclosed matter or a statistically valid sample of the claims that can be projected.* 20 *Sample must contain at least 100 items and use the mean point estimate to calculate damages. See the OIG Self Disclosure Protocols for more sample calculation details. Calculating the Overpayment Amount: Big Headache Situations Overpayment situations that could require a Self Disclosure Conduct Involving Anti Kickback Statute or Physician Self Referral Law Overpayment Resolution Conduct your investigation. Provide a narrative submission including a concise statement of all details and identification of those involved. Disclosing party must submit an estimate of the amount paid for items or services association with the potential violation. Can use the same overpayment sampling methodology as False Billing 21 11

12 Actual Calculation of Damages (Overpayment) to Refund per the OIG SDP: 22 Total costs of employment or contracting during the exclusion including salary, benefits, bonuses or other items of value, insurance, and taxes related to the employment of the individual (employers share of FICA and Medicare taxes). This amount is multiplied by the disclosing party s revenue based Federal health care program payor mix for the relevant time period. The end amount is used as the proxy for the amount paid and the single damages to the Federal health care programs resulting from the employment of the excluded individual. For example: $30,000 (cost of employment) X 60% (Federal Payor mix*) = $18,000. To which the OIG will usually apply a 1.5 X penalty. * 60% = 40% Medicare, 10% Medicaid, 10% TRICARE patient payors while the employee was employed. You Found And Calculated The Overpayment: Now What? 23 12

13 Repayment 24 Regardless of how good the explanation for the overpayment, Provider must pay or enter an agreement to pay what is owed If Provider can't pay the overpayment claims due in full, it may be able to make installment payments (Extended Repayment Plan) Medicare Financial Management Manual, Chapter 3 Overpayments cms gov/regulations and Guidance/Guidance/Manuals/downloads/fin106c03 pdf So where to disclose? 25 Contractor/Fiscal Intermediary Simple overpayments, duplicate payments, incorrect billings Important to note that reporting here cannot resolve potential liability for conduct arising in overpayment. Disclosure to CMS, OIG or the State Attorneys General pursuant to one of the Self Disclosure Protocols (CMS or OIG) Can lead to settlement agreements in which the provider is released from civil and administrative liability arising from the overpayment and related conduct Overpayments related to a Stark law violation, must be disclosed through CMS protocol If both Anti Kickback and Stark Statutes involved, providers can choose Provides should not submit the self disclosure to more than one agency Self disclosure may be referred to the Department of Justice or other agencies, if the agency believes that the conduct warrants more serious review. 13

14 Alternate self disclosure 26 In some cases, the same self disclosures can be made to a U.S. Attorney s Office that can be made to the HHS OIG except for Stark violations. Only the DOJ/USAO can offer a release from False Claims Act liability USAO routinely handles self disclosures Contractor Required Information for Voluntary Refund When submitting a discovery letter indicating that an error has been made and the process of refunding has either been started or needs to be started, the information below needs to be included. The name and provider number of the facility submitting the refund What the refund is for How the error was discovered The year/years in which the error occurred The number or estimated number of claims affected The estimated dollar amount of the refund if the exact amount is not yet known The steps taken to avoid a future reoccurrence of the error 27 14

15 Downside of Voluntary Refunds 28 Providers need to be aware that, "The acceptance of a voluntary refund in no way affects or limits the rights of the Federal Government or any of its agencies or agents to pursue any appropriate criminal, civil, or administrative remedies arising from or relating to these or any other claims." Medicare Credit Balance Report 29 The CMS 838 is specifically used to monitor identification and recovery of credit balances owed to Medicare. A credit balance is an improper or excess payment made to a provider as the result of patient billing or claims processing errors. Certification: ANYONE WHO MISREPRESENTS, FALSIFIES, CONCEALS OR OMITS ANY ESSENTIAL INFORMATION MAY BE SUBJECT TO FINE, IMPRISONMENT OR CIVIL MONEY PENALTIES UNDER APPLICABLE FEDERAL LAWS. 15

16 Medicare Credit Balance and MSP Claims MSP regulations at 42 CFR (h) require you to pay Medicare within 60 days from the date you receive payment from another payer (primary to Medicare) for the same service. Submission of the CMS 838 and adherence to CMS instructions do not interfere with this rule. You must repay credit balances resulting from MSP payments within the 60 day period. If an MSP credit balance occurs late in a reporting quarter, and the CMS 838 is due prior to expiration of the 60 day requirement, include it in the credit balance report. However, payment of the credit balance does not have to be made at the time you submit the CMS 838, but within the 60 days allowed. 30 Medicare Credit Balance Report 31 Examples of Medicare credit balances include instances where a provider is: Paid twice for the same service either by Medicare or by Medicare and another insurer; Paid for services planned but not performed or for non covered services; Overpaid because of errors made in calculating beneficiary deductible and/or coinsurance amounts; or A hospital that bills and is paid for outpatient services included in a beneficiary s inpatient claim. Credit balances would not include proper payments made by Medicare in excess of a provider s charges such as DRG payments made to hospitals under the Medicare prospective payment system. 16

17 Medicare Credit Balance Report 32 Required to be submitted quarterly; due 30 days after close of calendar quarter Failure to submit may result in suspension of Medicare payments Include all Medicare credit balances included in your accounting records as of last day of calendar quarter Once a credit balance is reported on one quarterly report, do not report it on subsequent quarterly reports A provider may submit a check. However, an adjustment claim is also required Code method for adjustment in column 11 Medicare Claim Adjustments Claims processing manual CMs Pub ; Chapter 1 Provider initiated claim adjustment Submitted as TOB xx7 or xx8 Time limits Provider failed to include item or service 1 year Corrects or supplements administrative finality Type of claim corrections Change to dates of service Change in revenue codes or HIPPS Cancel only to repay a duplicate payment or OIG overpayment Change to make Medicare the secondary or primary payer 33 17

18 SNF Claims Correction Tolerance Claims processing manual CMs Pub ; Chapter 1 34 When an initial bill has been submitted and the provider or FI discovers an error on the bill, an adjustment request is submitted if the change involves one of the following: A change in the number of inpatient days; A change in provider number; A change in coinsurance which involves an amount greater than $1.99; A change in the HIPPS code to correct a data input error or, Effective for changes for services June 1, 2000, change in HIPPS code due to an MDS correction. (Such adjustments are required within 120 days of the through date on the initial bill.) NOTE: See Chapter 6, Section 35 for information on submitting adjustments to HIPPS codes resulting from MDS corrections Provider MDS Corrections Claims processing manual CMs Pub ; Chapter 6 section 30.3 Applies to instances where the underlying MDS is corrected and resubmittted Adjustment requests based on corrected assessments must be submitted within 120 days of the service through date. The through date will be used to calculate the period during which adjustment requests may be submitted based on corrected RAI assessments For HIPPS changes resulting from an MDS correction, providers must append a condition code D2 on their adjustment claim. Providers that routinely submit corrections after the beneficiary s Part A stay has ended may be subject to focused medical review. Adjustment requests to change a HIPPS code may not be submitted for any claim that has already been medically reviewed 35 18

19 Case Studies/Scenarios 36 Case Studies General Questions 37 How was the issue discovered? Who discovered the problem? What internal steps should the provider conduct? How widespread is the problem? Were outside consultants used to investigate or quantify amount? Which is the best option for disclosure and why? How to prevent future problem? 19

20 Response is Guided by the Nature of the Problem Number of claims Related or unrelated (same type of service or many) Dollars at issue Repeated errors or periodic mistakes Global problem or isolated issue Always an upcode or just an incorrect code Oversight, mistake or intentional overbilling Difference of opinion or clear error Duration of error (months or years before discovery) 38 Case Study SNF Billed Incorrect RUG 39 The Medicare biller at the nursing home reported to the business office manager there is problem with Medicare claims in that some claims have an incorrect RUG score. The error happened in the past two months What if the MDS was done correctly and this is only a UB04 error? What if the MDS also needs to be corrected because therapy minutes were not recorded correctly? 20

21 Case Study Unlicensed Therapist 40 The facility discovered that the contract physical therapist s license expired six months ago. This particular therapist treated just about every resident in the facility. Can we retro the license? How is the overpayment calculated? Should we use statistical sampling? Which payer claims need to be corrected? What is best method to report overpayment? Case Study Unlicensed Nurse 41 Nursing home provider discovered during routine audit as part of its compliance process that a registered nurse failed to renew his/her license six months ago Is this an overpayment? How to determine overpayment? Refund Medicare through claims corrections? Refund Medicare through overpayment process? Why one might be better than the other? 21

22 Calculating the Overpayment Amount: 42 Lapsed or Unlicensed Clinician in Long Term Care Overpayment situations that are more complicated, but no CMS or OIG SDP requirement. Lapsed/Unlicensed clinician Overpayment Resolution Conduct your investigation Notification to the contractor and/or adjustment to the cost report depending on the position If clinician did not provide a billable service, i.e. floor nurse, not usually possible to calculate and refund an overpayment based on individual services provided. If clinical had a billable and unique identifiable service, i.e. therapy minutes (SNF) or nurse visit (Home Health), then those charges should be made nonbillable with appropriate adjustment to RUG/HHRG scores. If management personnel an adjustment to the cost report may be called for regarding that person s salary A Note About Unlicensed/Lapsed Personnel 43 Be sure to also consider the following: Other considerations beyond overpayment: Reporting staff to patient ratios to the state Effects on patient assessment and rates for reimbursement (MDS or HHRG) Therapy vs nursing service only RUGs Validity of documentation (clinical, medication, etc.) Penalties from oversight/licensing agencies for lapsed licensure or working without a license Medicaid concerns 22

23 Case Study Excluded Employee 44 The facility discovered that the Director of Maintenance is on the OIG excluded list. The employee s name has apparently been on the list for three years but, the facility failed to check Is this an overpayment? Why? Identify Who, What, & How (i.e., person, job duties, dates of employment or contractual relationship, background checks completed and screening process) What corrections are necessary? Calculating the Overpayment Amount: Big Headache Situations Overpayment situations that could require a Self Disclosure Conduct involving excluded persons Overpayment Resolution Conduct your investigation Be sure all current employees/contractors have been screened prior to disclosing Follow the requirements for all disclosures, letter content, admission of guilt, etc. in the OIG Self Disclosure protocols Acceptance of the Disclosure Letter stops the 60 day overpayment window 45 23

24 Case Study Licensed Nurse on Medicaid Exclusion List Facility discovers a working nurse was on a Medicaid exclusions database list under a former name which she did not disclose to the facility. If the nurse failed to disclose the other name is that facility s failure to verify? Does utilizing the SDP stop the overpayment 60 day clock? Is this an overpayment? Why? What corrections are necessary? 46 Case Study MDS Intentional Up Coded Provider discovers MDS nurse intentionally up coded MDS Is this an overpayment? What steps are necessary to determine dollar amount? How do you determine look back period? What is the time frame to complete investigation? What is best method to repay this amount? What other factors or disclosures are involved? 47 24

25 Case Study Ancillary on SNF Part A Claim 48 Ancillary Provider billed nursing home for Radiology services it did not provide Nursing home included overcharged ancillary on Part A claim There is no Part B billing on claim Is this an overpayment? If so, how is it calculated? What is repayment method? Case Study Billed for DOS after Death 49 A provider of services or supplier learns that a patient death occurred prior to the service date on a claim that has been submitted for payment. Is this an overpayment? Is investigation recommended? How is money repaid? 25

26 Case Study Increased Medicare Revenue 50 A provider of services or supplier experiences a significant increase in Medicare revenue and there is no apparent cause for the increase. Is the provider or supplier required to make a reasonable inquiry into whether an overpayment exists. What is best practice? Case Study Therapy Vendor Refund 51 3 years after services provided; After SNF billed Medicare Part B for therapy services; Therapy vendor refunds SNF for overlapping minutes on Part B residents; 26

27 Case Study New Owner, potential kickback 52 New owner of a facility finds that a preexisting contract included a potential kickback situation for a mobile x ray service Is there an overpayment implication for the new owners? How does it affect the situation that it was not found at the time the contract was transferred to the new owners? What action needs to be taken? Case Study Missing Home Health F2F 53 Home health face to face documentation is found to be incomplete or not completed during an audit Is this an overpayment situation? How far back might the agency have to investigate to determine the extent of the problem? Can the F2F documentation be acquired after the fact? If not, what is best method of repayment? 27

28 Case Study Home Health Duplicate Payment 54 Home Health Agency is paid twice [Medicare, HMO] for same service. DOS is two years ago How to determine correct payer? How is money refunded to Medicare or HMO? Is Home Health Agency required to refund over paid beneficiary co pay? Case Study HHA Patient not Home Bound 55 Home Health Agency discovers through routine audit that it is missing documentation regarding home bound status Are they required to investigate further? What is best practice? If home bound status is not documented is this an overpayment? How should overpayment be returned? 28

29 Links and References 56 and Abuse/PhysicianSelfReferral/Self_Referral_Disclosure_ Protocol.html andabuse/physicianselfreferral/self referral disclosureprotocol settlements.html disclosureinfo/files/provider Self Disclosure Protocol.pdf Information on Sampling for Overpayment Estimates and Guidance/Guidance/Manuals/downloads/pim83c08.pdf Questions? 57 Barbara J. Duffy, Shareholder, Lane Powell Harold Malkin, Shareholder, Lane Powell Deborah Nedelcove Vice President Risk Management, Chief Compliance and Privacy Officer, Avamere Bill Ulrich President, Consolidated Billing Services, Inc. 29