Navigating Overpayments and Reverse False Claims in Medicare: A Guide for Providers
is an essential healthcare program in the United States that provides insurance
coverage for seniors and people with particular disabilities. The program is administered
by the Centers for Medicare & Medicaid Services (CMS) and is funded by the
federal government. Providers who participate in the Medicare program are
required to follow definite rules and regulations, one of which concerns
Lately, Ronald Hirsch, a Doctor of Medicine, raised an unusual situation regarding overpayments in the Medicare program. In this scenario, a provider obtains an Advance Beneficiary Notice (ABN) before an elective procedure. The ABN informs the patient that Medicare may not cover the procedure and that the patient may be responsible for paying the cost if Medicare does not pay. If the patient agrees to go ahead with the procedure, the provider can bill Medicare for the procedure but must also apply a G-code to the bill to inform the Medicare Administrative Contractor (MAC) that an ABN has been obtained and that the provider does not expect payment.
However, in some cases, the MAC pays the claim anyway, and the provider has already collected a significantly higher payment from the patient at the time of service. In such cases, the provider must return one of the payments. It raises the question of which payment to return and how to ensure compliance with the law.
This situation raises the issue of the reverse false claim, which is a violation of the False Claims Act (FCA). The reverse component of the FCA was added specifically to address reimbursement for overpayments made by the government. The relevant elements of a violation are that the defendant concealed or improperly avoided or decreased an obligation to pay the government and did so knowingly, with no requirement to show either the use or materiality of a false record or statement.
To avoid violating the FCA, providers must have a robust revenue integrity program to ensure that duplicate payments are promptly identified and that the reason for the payment is understood and effectively reconciled. Providers must also have a "front-end" process to reliably identify services for which CMS will not reimburse payors and a patient-relations program to offer a comprehensive explanation to the patient about why the ABN was obtained, the payment if collected, was later refunded, and why the payment is being sought again.
If the provider is sure that Medicare does not cover the service, the payment should be refunded with an explanation using the MAC's specific form for reporting and returning funds. However, if the provider is uncertain about the coverage of the service, it may retain the Medicare payment and refund the patient component. In this case, the CMS payment remains subject to audit and denial at a later date, and the provider is relying on the MAC's judgment and understanding of CMS payment policies, which may not be entirely justified.
To summarize the above, providers who participate in the Medicare program must be vigilant and proactive to ensure compliance with the law and to maintain the integrity of the Medicare system. The retained funds are subject to later audit and recoupment, which can adversely impact the patients. Therefore, it is essential to have a robust revenue integrity system, a front-end process to identify non-reimbursable services, and a patient-relations program to offer comprehensive explanations to patients about ABNs and overpayments. These measures will help to avoid reverse false claims and maintain the trust of patients and the government.