Rule would give new force to worker allegations of Medicare overpayment
Healthcare providers and suppliers have another powerful reason to seriously examine allegations of improper payments brought forward by employees. Under the newly proposed 60-day repayment rule, hospitals, physician practices and healthcare suppliers could face triple damages and other punishments under the False Claims Act if they fail to investigate employee allegations of Medicare overpayments—even when overpayments are inadvertent and not the result of fraud.
Not quickly investigating alleged overpayments could also trigger exclusion from Medicare under the authority to impose civil monetary penalties, according to the proposed rule.
“Failure to make a reasonable inquiry, including failure to conduct such inquiry with all deliberate speed after obtaining the information, could result in the provider or supplier knowingly retaining an overpayment because it acted in reckless disregard or deliberate ignorance of whether it received such an overpayment,” the proposed rule states, adding later that “knowingly” retaining overpayments may trigger False Claims liability.
The new regulatory wrinkle conferring responsibility to investigate claims of overpayments comes embedded in HHS’ rule intended to give providers a definite time frame in which to voluntarily return erroneous payments from Medicare.
Overpayments covered by the rule would include claims for incorrect service dates, duplicate payments, erroneous medical coding, insufficient documentation or claims lacking medical necessity.
HHS officials estimate that about 125,000 providers a year would have to return overpayments under the new regulation, which requires such payments be made within 60 days of providers learning of them.
The public has 60 days to comment on the rule, which was published Feb. 16 in the Federal Register.
HHS Secretary Kathleen Sebelius announced the rule during a Feb. 14 news conference that was held with U.S. Attorney General Eric Holder to tout the federal government’s record-breaking results in fighting healthcare fraud in fiscal 2011.
Sebelius said rules such as the 60-day repayment requirement should cut down on the need for traditional pay-and-chase enforcement.
The 60-day repayment requirement was included as a general provision in the Patient Protection and Affordable Care Act in March 2010, and has been debated among healthcare experts since then, with much of the scrutiny related to employee tips.
Unlike black-and-white disclosures from auditors or payers, tips about potential overpayments from employees may introduce uncertainty about when the information was truly “known” for the purposes of the rule, since such comments trickle up through compliance departments and may require internal investigations to confirm.
Frank Sheeder, who chairs the healthcare enforcement and compliance practice at DLA Piper in Dallas, said the rule states that the act of calling in a tip to a hotline couldn’t trigger a repayment obligation.
“When you have studied it and quantified it and you can write a check, that’s when you’ve identified it,” said Sheeder, who is also president of the Health Care Compliance Association.
However, Hank Walther, a partner with Jones Day in Washington and a former deputy chief of the healthcare fraud unit in the Justice Department’s criminal fraud section, said the new rule could invite government scrutiny of complex internal debates over matters such as coding of individual services.
“There’s at least a risk for providers that government would say that you were at least on notice when this one person chimed up and said you were coding it improperly,” Walther said.
Maureen Mudron, deputy general counsel for the American Hospital Association, said the trade group is scrutinizing the 60-day timing rule, the implication of False Claims liability and a provision that would allow authorities to look back 10 years for repayment obligations.
“We see this as an opportunity to have something useful for the field,” Mudron said. “What we are examining in depth are those places where they are using False Claims language. The intersection with the False Claims Act makes this a very significant rule and process to examine.”