Overpayment Recovery Across Shared Tax ID Numbers Put Into Action

Section 1866j(6) of the Social Security Act gives the Secretary the authority to make “any necessary adjustments” to the payments of a healthcare provider who shares a tax identification number (TIN) with a provider that has an outstanding Medicare overpayment.  Regardless of a provider’s NPI or PTAN billing identifier, if provider “A” shares a TIN with provider “B” the law allows the Secretary to offset “A’s” overpayment against “B’s” payments.

While the statute is nothing new, because of a new and improved capability to track and capture Medicare payment analytics, CMS has made it clear that it will begin using Section 1866j(6) authority to increase the recovery of overpayments.  See MLN Matters Article, SE1612, issued in June 2016.  CMS has enhanced its financial accounting system and it will recover payments made to any provider that shares the same TIN with a provider that has an outstanding Medicare overpayment across multiple states within a Medicare Administrative Contractor (MAC) jurisdiction.

Handguns and Healthcare

As you most likely are aware, Texas is now an open carry state. That means that anyone that possesses a handgun license can legally carry the gun openly. Openly here means that it is not concealed. It does not mean that someone can start waving the gun around saying, "look at me I am carrying a gun." Doing that will most likely invite a conversation with police officers.

Handgun owners can be prevented from entering your private place of business so long as proper notice is given. You have seen signs posted in various businesses prohibiting the carrying of concealed handguns in certain establishments. If the sign meets the Texas requirements for such notice, you have done what you need to do in order to prohibit the concealed handgun from being carried on your agency’s premises. The sign applies to all who might bring a handgun onto the premises. Not just guests, but employees as well.

Please review Texas Penal Code sec. 30.06 which gives the specific requirements for the Signs. The type must be a certain height and be a certain type style and be displayed in a certain manner and in a particularly conspicuous way.

Dallas

We will not be posting a full article today due to the tragic events that have occurred in our hometown of Dallas. If you would like to read an article, please review the wonderful posts that have been written previously. Thank you for reading.

What Can Medicare Providers Expect from CMS's Recovery Audit Contractor Programs

The Centers for Medicare and Medicaid Services (CMS) created the Recovery Audit Contractor (RAC) program to identify potential Medicare overpayment and allegedly, underpayments.  The types of claims that will be selected for review are unpredictable, but claims for inpatient hospital services have been known to receive more auditing than other types of claims.  However, the potential for RACs to expand into different areas is more than likely due to the government's recent initiative to step up enforcement. 

Providers and attorneys representing providers and suppliers in RAC appeals should keep in mind that RACs are compensated by a contingency fee based basis, and therefore a bias automatically exists in the system.  Providers and their attorneys should address this bias by going through the formal administrative appeals process that involves five levels, i.e., redetermination, reconsideration, a hearing before an administrative law judge, a review by the Medicare Appeals Council if necessary, and finally, judicial review in a federal district court.

The RAC program has been hitting providers in Texas so concern over potential RAC auditing activity should be considered.  In anticipation of a RAC audit, providers and suppliers can begin efforts to understand audit defenses and setting aside resources to defend against these audits.

The Importance of Notification

When a physician or other licensed practitioner leaves a state in which he/she is licensed and plans to move the practice to another state, often, the state license no longer used by the practitioner is merely allowed to expire.

When that occurs, the licensing Board does not know whether you simply forgot to renew your license, or whether you have discontinued your practice. Some states licensing boards think the practice of merely allowing your license to expire is a sanctionable offense and require either an agreed/consent order and/or a report in the NPDB, sometimes years after the fact. 

Therefore, if you plan to leave a state to practice in another state, before you allow your license to merely expire because you have no plans in the future to return to your former practice,  please talk your licensing Board first. While that practice may be fine in some states, it is frowned upon and sanctionable conduct in others. 

And for you overachievers who have more than a single license in any particular state, you should speak to all your licensing boards before allowing any of your licenses to expire. Many Licensing Boards regard sanctions from other boards as grounds for their own sanctions, and the snow-ball effect may adversely affect your ability to practice in any state in which you are licensed.

Practical Steps To Keep The Money Flowing

          As health care fraud and the Medicare Trust Fund have become a growing national concern, the Centers for Medicare and Medicaid Services (“CMS”) has aggressively carried out its mission to ensure Medicare payments to medical providers and suppliers are proper.  Consequently, in today’s health care arena, it is essential for all medical providers to understand the importance of maintaining complete and accurate medical record documentation to support its claims for proper Medicare reimbursement.  Equally important is knowing how to effectively work with CMS and its fiscal intermediaries in avoiding payment interruption. 

            This article discusses tactics durable medical equipment suppliers can use to keep the money flowing when faced with Medicare payment interruption.  They include negotiating adjustments to the percentage withheld, “fixing” the problem that resulted in overpayments, negotiating extended repayment plans, and negotiating a compromise or waiver of overpayment claims.

Adjusting the Percentage Withheld

            Notwithstanding a provider’s right to appeal an overpayment determination, CMS may recover the amount owed by interrupting Medicare payments to the provider before the appeal is adjudicated.  Indeed, CMS and its fiscal contractors have the authority to “stop” Medicare payments with little or no notice to a provider because of an overpayment or the suspicion of fraudulent billing.  Although the authority for interrupting payments has proven very effective for “protecting” the Medicare program, it can have devastating financial consequences for a provider. 

            Recoupment, suspension and offset are tools used by CMS to collect overpayments from providers.  CMS can “recoup” an overpayment by reducing present or future Medicare payments and applying the amount withheld to the indebtedness.  When it believes there may be an overpayment or suspects fraud, CMS can “suspend” payments to the provider while it conducts its investigation into the propriety of the payments.  A non-Medicare debt, for example a Medicaid overpayment, may be recovered by “offset” through reducing present or future Medicare payments and applying the amount withheld to the indebtedness.  Distinctions between the type of recovery techniques are important, especially when the provider files bankruptcy.

           

            CMS is aware that payment interruption can result in hardship, possibly even causing bankruptcy.  Fiscal contractors are instructed by CMS to take into consideration its impact on the provider’s continued ability to deliver care to Medicare beneficiaries when imposed to collect an overpayment.  Depending on the basis for its imposition, CMS or its fiscal contractors may be willing to adjust the percentage of suspended Medicare payments. 

             Most healthcare providers simply cannot survive the interruption of all Medicare payments for an extended period of time.  CMS authorizes fiscal contractors to adjust the amount withheld from the provider’s payments when the suspension will cause “irreparable harm.”  Medicare guidelines indicate that contractors may withhold as little as 20% of Medicare payments.

            Negotiating an adjustment to suspension is not easy because such arrangements are at the discretion of the government.  CMS considers a variety of factors in making the adjustment.   The most important are the provider’s financial status, willingness to cooperate, past record in repayment of overpayments and percentage of Medicare beneficiaries in the provider’s patient population.  Of course, CMS may not be willing to adjust recoupment or suspension when fraud or misrepresentation is suspected.

“Fixing” the Billing Problem

            Payments are frequently suspended when the provider is overpaid, even though the actual amount of the overpayment has not been determined.  An effective strategy for addressing payment interruption in this context is to attempt to persuade CMS that whatever caused the overpayment has been “fixed.”  By eliminating the billing problem resulting in the overpayment and making arrangements for its repayment, CMS may be willing to “lift” the suspension.

            The provider must identify and correct the billing mistakes causing  the overpayment.  CMS and its contractors unfortunately do not explain in any meaningful detail what kind of billing errors actually may have caused the overpayment.  The problem lies with CMS’s assumption when “policing” the Medicare program that the provider is guilty until proven innocent.  Indeed, many times the government has concluded based upon some indication of billing error that the provider intended to defraud the Medicare program. 

            If CMS is convinced that the provider is fraudulently billing the Medicare program, it is unlikely to believe that the provider can “fix” the billing problem.  The provider should offer to conduct an internal audit of its Medicare claims and billing practices to identify mistakes or other irregularities that may have caused the overpayment that resulted in suspension of payments.  Again, CMS is not always receptive to such offers.  But if the provider has credibly investigated the matter, identified the problem CMS was concerned about, and taken appropriate remedial or corrective action to eliminate future mistakes, a lengthy government investigation may be shortened because of the provider’s proactive efforts.  More importantly, the matter may be resolved as an overpayment, not a fraud investigation.

            In cases of suspected fraud or willful misrepresentation, CMS generally makes the determination whether to suspend after consultation with the Inspector General, the fiscal contractor, and interested law enforcement agencies.  Negotiations can be difficult in this context because CMS or its fiscal contractors are acting as a quasi-prosecutor to protect the Medicare program and will treat the provider as a criminal being investigated.  In such circumstances, CMS may be unwilling to discuss the nature of the billing problem causing the overpayment to avoid tipping its hand by identifying the “fraudulent conduct” thus jeopardizing any chance of prosecution.  Consequently, a problem frequently encountered by providers is a failure to receive adequate notice of the basis for suspension. The notice is supposed to give the “reasons for making the suspension.”  Often it merely recites the grounds for invoking suspension under the regulations, but it does not explain the reasons for imposing suspension in a particular case.  Thus, the provider may be faced with the impossible task of rebutting general conclusory allegations when CMS has given absolutely no factual basis for their support.

Extended Repayment Plans

            Once an overpayment has been determined by CMS or its fiscal contractors, the amount is a debt owed by the provider to the United States.  The Federal Claims Collection Act requires timely and aggressive efforts to recover overpayments.  CMS is responsible for collecting Medicare overpayments.  Fiscal contractors, as agents of CMS, are also responsible for recovery of overpayments.  A provider is expected to repay an overpayment as quickly as possible.  Unless immediate arrangements to repay the overpayment are made, the government will initiate recoupment to recover the debt.

            When a fiscal contractor notifies the provider of an overpayment, it typically gives three repayment options.  The provider may remit a check for the full amount of the overpayment.  It may dispute the overpayment by submitting documentation that demonstrates an error in its determination.  Or, it can request an extended repayment plan.  Recoupment will automatically begin fifteen (15) days after the determination and result in withholding 100% of Medicare payments to recover the debt.  If the provider submits a fully documented repayment request and begins making payments, recoupment will ordinarily not be initiated unless the proposal is rejected.  The repayment request must be in writing and include specified times and amounts of repayment.     

            Medicare guidelines state that if a provider cannot repay an overpayment within 30 days after receiving demand for payment, it may request a repayment schedule.  Generally, no extended period of recovery will exceed 12 months from the date of the first demand letter requesting payment.  Thus, overpayments typically  must be repaid by the provider within 12 months of the initial demand for payment.  However, if a provider demonstrates that repayment within a 12 month period would create “extraordinary financial hardship,” it may request a longer period for repayment.  Approval of an extended repayment is at the discretion of the government.  And, such requests are only approved when CMS determines that it would “benefit the program.”

Compromise or Waiver of Overpayment Claims

            Forcing a provider out of business and into bankruptcy under the guise of collecting an overpayment is an unconscionable abuse of power.  Often the cessation of Medicare payments only ensures failure of the provider’s business and guarantees that CMS will recover only a fraction of the overpayment.  Yet, it is within the discretion of CMS to reject other repayment alternatives and recoup or suspend payments to ensure recovery of a Medicare debt, even when the payment interruption may prevent the provider from repaying the full overpayment.

             CMS may reduce the debt or suspend or terminate collection action on its recovery.  In situations where CMS concludes that an overpayment cannot be repaid in a reasonable period of time, it can reduce the liability so that the provider can pay at least a substantial part of the debt.  A basic condition for use of the compromise authority is that there is no indication of fraud or misrepresentation.

            Negotiating a compromise of the debt can be difficult.  Despite the authority to reduce a debt, it is an unwritten CMS policy that no repayment plan can be authorized that will not result in full recovery, including principal and interest, of the debt due the Medicare program.  The provider must be persistent and persuade the government it is better to recover something than to collect but a small fraction of the debt by stopping payments to the provider.  However, if CMS believes that the provider has no present or prospective ability to pay an existing overpayment in a reasonable time, it may be willing to compromise the amount of its overpayment claim.

Conclusion

            As healthcare fraud continues to be big news, and the public fears collapse of the Medicare Trust Fund, the government will continue to take full advantage of the overpayment recovery tools at its disposal.  Aggressive use of recoupment and suspension has proven effective for “protecting” the Medicare program.  But it can have devastating financial consequences for the provider as well.  Payment interruption can often be avoided or at least effectively managed if the provider is aware of the formal remedies available for challenging such actions and the practical steps to take to keep the money flowing.

Nobody Can Give You Wiser Advice Than Yourself (Except for the OIG)

Often we have clients who have been approached by persons or entities that request they participate in an “arrangement” in order to maximize business. Sometimes this comes in the form of marketing services, medical services, sales of a service, or equipment for testing, but it can include any business model. When any part of the transaction includes the arrangement of health care, the anti-kickback statute is implicated.

If you are contemplating such an arrangement, the Health and Human Services Department Office of Inspector General will accept a written description of the arrangement. As well, they will provide a review to the proposed plan as it relates to the anti-kickback statute. The OIG will explain whether or not the arrangement will be seen as a violation by the OIG, or whether it will be considered compliant.  A letter from OIG advising of a compliant arrangement is security that it does not violate the anti-kickback statute.

If the arrangement is changed or altered any from the description given to the OIG, the letter of protection will not cover such an alteration, and a new request for review must be made. Our firm has submitted arrangements to the OIG for such an opinion, known as an advisory opinion. The opinion covers only the requestor, but the opinions are redacted and published as guidance to others.