AHA: Over­pay­ment reg overkill

Provider groups crit­i­cize CMS re­pay­ment plan

Modern Healthcare - - FRONT PAGE - Joe Carl­son

ACMS pro­posal that could ap­ply False Claims Act li­a­bil­i­ties to Medi­care over­pay­ments go­ing back 10 years has met with an avalanche of crit­i­cism from hos­pi­tals, physi­cians and in­dus­try at­tor­neys.

The pro­posed re­pay­ment rule would cre­ate False Claims Act li­a­bil­ity for providers who hold on to ex­cess Medi­care pay­ments for more than 60 days af­ter the provider should have fig­ured out whether an over­pay­ment had been made. The pos­si­bil­ity of triple dam­ages and $10,000-per-claim fines may ap­ply in cases where providers fail to iden­tify over­pay­ments within 60 days by not act­ing with “de­lib­er­ate speed” to in­ves­ti­gate al­le­ga­tions.

More than 120 med­i­cal so­ci­eties and as­so­ci­a­tions in­clud­ing the Amer­i­can Med­i­cal As­so­ci­a­tion signed let­ters op­pos­ing the pro­posed 60-day re­pay­ment rule dur­ing a CMS public com­ment pe­riod that ex­pired April 16. The Amer­i­can Hospi­tal As­so­ci­a­tion and the Fed­er­a­tion of Amer­i­can Hos­pi­tals, which to­gether rep­re­sent nearly all of the 5,000 U.S. com­mu­nity hos­pi­tals, sub­mit­ted their own de­tailed let­ters of op­po­si­tion.

“The pro­posed rule reads like a fraud and abuse en­force­ment pol­icy, and cre­ates an aura that ev­ery Medi­care over­pay­ment is the byprod­uct of sus­pi­cious be­hav­ior of providers and sup­pli­ers,” says the FAH’s let­ter, signed by Pres­i­dent and CEO Chip Kahn.

The rule’s com­men­tary “in­di­cates that a physi­cian has a per­pet­ual duty to ‘re­search’ whether any over­pay­ment may ex­ist. This re­quire­ment would be ex­tremely bur­den­some for physi­cians, as it would im­pose a bound­less duty to troll med­i­cal records in search of in­nu­mer­able vul­ner­a­bil­i­ties,” ac­cord­ing to a com­ment let­ter signed by the AMA and more than 100 other physi­cians’ groups.

Ex­perts say the pro­posal was ob­jec­tion­able partly be­cause many Medi­care over­pay­ments are be­cause of er­rors by the gov­ern­ment or its con­trac­tors. While providers have long been ex­pected to find and fix such er­rors within a rea­son­able amount of time, the new rule de­fines 60 days as the dead­line, 10 years as the look-back pe­riod and the False Claims Act as the method of com­put­ing penal­ties.

“So providers have to not only be Medi­care’s keeper ... but now that gets to go back for 10 years? Based on fraud? That is re­ally where ev­ery­one has lost their minds,” said Polsinelli Shughart at­tor­ney Colleen Fad­dick, de­scrib­ing providers’ re­ac­tions. “There are plenty of ways for CMS to go back 10 years when there’s fraud. But ex­tend­ing what are of­ten rou­tine and trans­ac­tional is­sues into the area of fraud is what is driv­ing ev­ery­one nuts.”

The CMS has long sought to clar­ify ex­actly when and how providers are re­quired to re­turn over­pay­ments. In March 2010, the Pa­tient Pro­tec­tion and Af­ford­able Care Act de­clared a 60-day re­pay­ment rule.

Last Fe­bru­ary, the CMS pub­lished the pro­posed rule for Medi­care Part A and Part B providers and sup­pli­ers, say­ing they could sim­ply re­turn over­pay­ments within 60 days through the ex­ist­ing vol­un­tary re­fund process— though the pro­gram is be­ing re­named the “sel­f­re­ported over­pay­ment re­fund process” be­cause it is no longer vol­un­tary.

Com­mon rea­sons for such over­pay­ments would in­clude in­cor­rect ser­vice dates or codes, du­pli­cate pay­ments, in­suf­fi­cient doc­u­men­ta­tion, and lack of med­i­cal ne­ces­sity for the ser­vice. The rule would ap­ply to over­pay­ments up to 10 years old.

The CMS’ rule says the 60-day clock be­gins run­ning ei­ther when a provider iden­ti­fies the pay­ment, or when it shows “reck­less dis­re­gard or de­lib­er­ate ig­no­rance” to it by fail­ing to make a rea­son­able in­ves­ti­ga­tion into events such as au­dit find­ings and un­ex­pected in­creases in rev­enue.

“We be­lieve defin­ing ‘iden­ti­fi­ca­tion’ in this way gives providers and sup­pli­ers an in­cen­tive to ex­er­cise rea­son­able dili­gence to de­ter­mine whether an over­pay­ment ex­ists,” the CMS wrote. “With­out such a def­i­ni­tion, some providers and sup­pli­ers might avoid per­form­ing ac­tiv­i­ties to de­ter­mine whether an over­pay­ment ex­ists, such as self-au­dits, com­pli­ance checks and other ad­di­tional re­search.”

John Joseph, a prin­ci­pal with Post & Schell in Philadel­phia and a for­mer as­sis­tant U.S. at­tor­ney, said that re­quire­ment is new be­cause it no longer re­quires a provider to ac­tively con­ceal an over­pay­ment in or­der to trig­ger False Claims penal­ties.

“The law, as it has been changed, can trig­ger false claims li­a­bil­ity with­out any ac­tion on the provider,” he said. “In a way, you are pro­vid­ing li­a­bil­ity now for, in­stead of an ac­tion, a state of mind. That is a new fea­ture.”

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