In a recent blog, I outlined the components of what makes up Policy & Procedure (P&P) – the WHY, WHEN, WHO, WHERE & HOW that is the backbone of good process. P&P need not be overly complicated or detailed – in fact, if you don’t “Keep it Simple” you are creating a monster. They say that the devil is in the details, and in this case that is true. Overthinking it, and adding unnecessary layers to your process will make it all too hard to comply with. If that is the case, and you make it impossible to meet your internal process points, you may truly be “hoisted by your own petard” (arcane reference acknowledged, but in plain English – “you have no one to blame but yourself)”.  Do not err on the side of making your process too hard to follow.

Reporting & Returning Medicare Overpayments Final Rule

When applying these basic tenants to the creation of the Policy & Procedure to address the Reporting & Returning Medicare Overpayments final rule, it is most important to be very clear on the WHEN and the HOW components. To ensure that your P&P is able to be followed, be clear and concise, and understand what the Centers for Medicare and Medicaid Services (CMS) means when they say that Medicare Part A and Part B providers must report and return the overpayment by the later of 60 days after the date it is identified or the date of any corresponding cost report is due (if applicable).

The real question most providers have is “When is the overpayment identified?” The most simple way to address this is by answering the HOW part of the identification; was the overpayment identified via routine aging follow up? Was it identified through a consultant review? Was it identified by the Medicare contractor?  Knowing the HOW will help providers determine the WHEN for the return of the monies to Medicare. If the provider needs to conduct an investigation to determine overpayment, they will have, at the most, six (6) months to conduct the investigation into the balance and then, at the most, sixty (60) days to return the overpayment to Medicare via an adjustment or through the cost report – whichever is the soonest.

A key item in the final rule is the clarification that overpayment is determined to be identified when a provider has found through “reasonable diligence” that they have received an overpayment and that they have quantified the overpayment. To keep it really simple, build in the process of conducting a monthly Medicare aging review to identify potential overpayments. Create a Policy & Procedure outlining WHO will be responsible for identification of overpayments, HOW they will report & return the overpayment and WHEN the reporting must be completed. As an example:

PURPOSE: to identify Medicare Part A and Medicare Part B overpayments

RESPONSIBILTY: Medicare Biller/ Business Office Manager/CBO

PROCESS: Biller/ BOM/ CBO will:

1. Review Medicare Part A and B agings by the _______ day of the month on a monthly basis to identify potential overpayments from the Medicare Administrative Contractor (MAC)
2. Complete account review (investigation) to validate overpayment. Must be completed within 15 days of the monthly Medicare aging review
1. Report & Return overpayment within 15 days of validation of overpayment via adjustment claim OR the cost report, whichever is most timely.

MONITOR/OVERSIGHT: AR Manager, Corporate AR Manager or facility Administrator will:

1. Conduct a monthly AR aging report review with billing staff in order to determine and/or verify potential Medicare overpayment and direct billing staff in the reporting and repayment of validated Medicare overpayments.
1. Manager will ensure that the overpayment is reported via adjustment claim or cost report, whichever is soonest
2. In the case of staff turnover, manager will review aging report in full to identify overpayment and will ensure that the overpayment is reported via adjustment claim or cost report, whichever is soonest.

In the event that the overpayments identified are the result of a clinician licensure issue, up-coding or billing errors and/or are spread over multiple claims/ periods, etc. we strongly recommend that LTPAC providers work with their legal counsel to self-disclose the issue to CMS and to arrange for repayment of the monies. Keep in mind that if providers are aware of the overpayment, and they do not act within the timeframes that the final rule detail this non-action constitutes fraud and is subject to penalties under the False Claims Act. Your compliance plan should be amended to include the details of this rule and how your community will comply with the regulation.

In regard to the final rule for the Reporting and Return of Medicare Overpayment, the most important answer is for the question of HOW such overpayments will be identified.  For those facilities that have a robust internal auditing process, this rule should not present any issues. However, if you are not sure, or if you are simply looking for validation of the direction of your internal process, Richter Healthcare Consultants is ready to assist you. Contact Richter today!