Health Care Fraud Defense Attorneys Help Medical Professionals Deal with Overpayment Notices
Receiving “Notice of Overpayment” from Medicare is an intimidating and likely scary experience for any medical service provider. Not only does the provider face financial repercussions, the notice is also the first sign that the provider may be involved in further administrative – and potentially civil or even criminal – proceedings with the Centers for Medicare and Medicaid Services (CMS), the United States Department of Health and Human Services Office of the Inspector General (OIG), and the United States Department of Justice (DOJ). Compounding these fears, many providers do not know why they are receiving the notification from CMS regarding overpayment, what to do in response to the notification, and what their rights are for contesting the notification.
Do Not Underestimate the Overpayment Notice
As former federal healthcare fraud prosecutors and experienced healthcare defense attorneys, we know first hand how quickly an overpayment notice can escalate into a formal fraud investigation. Don’t let this happen to you! In our day-to-day practice we see how simple CMS notices have prompted the interest of the U.S. Attorney’s Office— due to incorrect handling and inappropriate responses. In fact, almost all clients that approach us after they had handled the initial correspondence with the government on their own, need our help to undo the initial steps they have taken or were advised to take. Keep in mind that most problems can be addressed and resolved at the very first stage. All that is needed are experience and skillset.
That means, you need to concentrate your efforts on this initial stage and make sure that you receive competent and reliable advice that will avoid a formal fraud investigation and will avoid you being flagged, suspended, or removed from the Medicare provider list.
We can help you. Many of our attorneys are former federal prosecutors and know first-hand how the government builds a case and what to do against it. As prosecutors we have seen how inexperienced attorneys can jeopardize a case or ruin a business. Our attorneys have handled hundreds of healthcare audits and investigations! If you need to protect your business, you should contact us immediately for a free and 100% confidential consultation.
Why Do Clients Trust Us?
We have gained a reputation as a trusted advisor to defend individuals and businesses against CMS and other government healthcare agencies. This trust is based on three key factors.
1. Our Experience & Government Insights
Defense attorneys in our Health Care Practice Group offer decades of government and private practice experience. While many attorneys have a diverse practice and handle personal injury cases, assault, and DWI matters, other attorneys focus almost exclusively on federal healthcare law defense cases. This focus is expressed in our professional background and our day-to-day work. Clients from literally across the United States contact us with their healthcare questions because they know that our team has the experience and expertise to handle any situation, no matter how dangerous and advanced an audit or investigation is. Many of our attorneys have served the Department of Justice as federal prosecutors and we have seen first hand what mistakes can lead to formal fraud investigations. We know how to avoid such mistakes and protect our clients and their businesses. Most importantly, we understand how important your business is for your livelihood and your family and we take every precaution to avoid a criminal investigation.
2. Our Results
We are proud of our track record. Our attorneys have helped many clients from across the United States to achieve desired outcomes. First and foremost, we have an impeccable track record of avoiding criminal charges. Medicare audits can easily turn into Medicare fraud investigations and on every case that we took over to “rescue” the client, we are able to undo mistakes and avoid criminal prosecution. Further, our attorneys established a long list of case outcomes, in which formal healthcare fraud investigations resulted in no civil and no criminal liability for our clients. Just like you see a cardiologist (and not, for example, a dentist) when you suffer heart issues, you should also see someone profoundly familiar with Medicare audits and healthcare defense work when your business is under attack.
3. Our Client Commitment
Most clients are surprised to find out that when we say “you will have direct access to senior attorneys throughout your case” we mean it. From the moment you call to the conclusion of your case you will work with senior lawyers such as former Department of Justice prosecutors or veteran healthcare defense attorneys. We know how important your case is to you, so we will not waste your time with paralegals, secretaries, or junior lawyers. We will not wall you off or delegate your case. Give it a try and see who answers the phone when you make the first call. We bet it will be a distinguished attorney, not a secretary.
Former federal prosecutors and attorneys are available to discuss your case. Don’t let the situation get out of control and don’t let the government build a (criminal) case against you. Call us today and let us identify your options.
What Are Medicare Overpayments?
Medicare overpayments are any amounts of money a provider receives in excess of what that provider is legally owed under the Medicare statutes and regulations. In other words, Medicare overpayments are monies Medicare has already paid to a medical provider but that Medicare later determines it should not have paid.
Unlike many commercial health insurance programs, who conduct an initial investigation into claims before paying them, Medicare generally pays claims automatically and then later investigates the validity of the claims. This practice is sometimes referred to as the “pay and chase” model of claims review. Thus, despite compensation being remitted to providers, such compensation is always subject to being called back by CMS. As such, any providers who participate in the Medicare program should be aware of the potential for a further evaluation of their Medicare claims regardless of whether Medicare has paid those claims.
What Are the Causes of Medicare Overpayments?
Many times, Medicare overpayments are the result of accidental mistakes in claims documents or other inadvertent errors. CMS has identified three major causes of overpayments:
- Insufficient Documentation: Insufficient documentation occurs when providers fail to submit adequate medical documentation to support the claims they are billing for. Documentation is inadequate if it does not show that a service was actually provided to the patient, that the service billed for reflects the actual level of service provided to the patient, or that the service provided to the patient was medically necessary.
- Medical Necessity Errors: Medical necessity errors happen when a provider provides a service or prescription to a patient that the patient did not have a medical need for. Common examples include superfluous laboratory testing or unneeded durable medical equipment (DME). Medical necessity errors may also result from a patient being certified for a service that the patient does not meet the qualifications for, such as a person who is not homebound being certified for home health care.
- Administrative and Processing Errors: Administrative and processing errors are often the result of human mistakes and oversights, such as clerical errors, typos in claims or billing documents, missing information or signatures, and coding mistakes. However, claims reviewers may suspect fraud where providers demonstrate a pattern of inaccuracies or discrepancies.
Importantly, Medicare overpayments are red flags to CMS investigators that a provider or practice could be involved in fraudulent activity.
What Should You Do If You Self-Identify an Overpayment?
Providers are under a legal obligation to promptly notify CMS if they or their staff identify overpayments received from Medicare. Once aware of an overpayment, providers have 60 days to report the overpayment to CMS and make arrangements to repay the overpayment amount. Providers who do not meet this deadline are subject to steep civil monetary penalties.
Providers and practices who self-identify and repay Medicare overpayments are much more likely to avoid further audits and investigations than providers who are detected by CMS. Therefore, it is always a good idea for providers and practices to conduct regular internal audits and routine regulatory compliance reviews. Doing so will not only help providers avoid a CMS audit by preemptively refunding the overpayments, it will help providers demonstrate their good faith efforts to comply with Medicare regulations and statutes should they ever be audited or investigated by CMS.
How Does CMS Detect Overpayments?
Because CMS has traditionally used the pay-and-chase method for reviewing healthcare claims, many providers underestimate CMS’s ability to detect and investigate incorrect or improper billing practices. This assumption is incorrect and foolhardy. In fact, CMS has a multi-tiered process for identifying overpayments issued to providers.
CMS itself has harnessed technological advances in computer software and analytics to review claims in a faster and more accurate manner than ever before. Recently CMS implemented the Fraud Prevention System software, which uses predictive analytics to identify suspicious patterns in healthcare billing data both in real time and retrospectively.
Additionally, CMS has initiated the Fee for Service Recovery Audit Program through which CMS retains several private contractors to assist in the processing of Medicare claims and the detection and recovery of overpayments. Medicare Administrative Contractors (MACs) are private insurers with regional jurisdiction to process certain Medicare claims. MACs are the operational contacts between CMS and providers. Comprehensive Error Rate Testing (CERT) Contractors review claims submitted to MACs and CMS to identify any potential overpayments. Recovery Audit Contractors (RACs) and Zone Program Integrity Contractors (ZPICs) are private contractors hired by CMS to conduct audits of particular providers to discovery any overpayments made to those providers
How Will You Know?
Under federal law, once CMS learns of an overpayment made to a provider, CMS must attempt to recover the funds that were improperly paid. As the intermediaries between CMS and providers, MACs are charged with contacting providers to retrieve the overpayment amounts. Oftentimes providers will first learn about an alleged CMS overpayment is through a Demand Letter issued by their local MAC. Demand Letters detail the existence and amount of the overpayment, the provider’s repayment options, and the provider’s rights to rebut or appeal the findings of the MAC.
What Are Your Repayment Options?
Once notified of an overpayment, providers have 30 days to repay the overpayment amount before interest begins accruing. Providers who have the desire and ability to repay the full overpayment amount before interest starts accruing may do so. Providers who cannot repay the full overpayment amount immediately have several options for repayment plans. Instructions for each of the repayment options are contained in the Demand Letter issued to the providers. The repayment options include:
- Immediate Repayment: Providers have 30 days to remit payment in full before interest begins to accrue.
- Immediate Recoupment: Selecting immediate recoupment authorizes the MAC to immediately begin withholding payments from the provider’s current and future claims to cover the overpayment amount. Providers who choose the immediate recoupment plan have the option of initiating only partial withholdings, such as a percentage of payments or a set amount from each payment.
- Standard Recoupment: MACs automatically begin recouping monies from a provider’s pending claims payments once the provider’s time for rebutting the payment demand lapses. A provider does not need to do anything to select the standard recoupment option.
- Extended Repayment Schedule (ERS): Providers who cannot afford to repay the overpayment demands within the required timelines may request an ERS from their MAC.
What If You Do Not Pay the Overpayment Demand?
If a provider does not remit payment to the MAC within a timely manner or request an ERS, the MAC may refer the provider to the United States Treasury for entry into the Debt Collection System (DCS). Before the MAC can send the provider to debt collection, the MAC must attempt to contract the provider in several different manners.
First, the MAC must issue the provider an Intent to Refer Letter (IRL) that identifies the debts the MAC considers to be delinquent. The IRL further notifies the provider that the debt may be referred to debt collection if the provider does not repay it or establish an ERS. MACs send IRLs between 60-90 days after the initial Demand Letter unless the payment schedule has been deferred by an appeal or ERS.
If the situation has not been resolved by the IRL, the MAC must attempt to reach the provider by phone to discuss the outstanding overpayment debt. After the passage of 120 days from the initial Demand Letter, the MAC may refer the provider to DCS for debt collection. However, the MAC must make at least one additional attempt to reach the provider via telephone no less than seven days prior to the referral.
Once the debt has been transferred to the Treasury Department’s DCS, the DCS has several strategies for collecting the debt. DCS may make further attempts to contact the provider through demand letters and telephone calls. DCS may also implement wage garnishment or salary off-setting, similar to collection for back taxes. Skip tracing and credit report searching are other tools the DCS may use to collect the debt. Finally, DCS has the option to refer the debt to a private debt collection agency.
What Are Your Options to Contest a Repayment Request?
Providers do not need to accept the MAC’s initial overpayment payment determinations. MACs often use flawed methodology or apply outdated laws when they evaluate a provider’s overpayment liability. To contest a MAC’s overpayment request, a provider has the following options:
- Rebuttal: A rebuttal is an opportunity for a provider to demonstrate to a MAC any issues with a Demand Letter. To make a rebuttal, a provider must submit a Rebuttal Statement to the MAC within 15 days from receipt of the Demand Letter. The Rebuttal Statement should include explanations and evidence of why the MAC’s overpayment determination is incorrect. Although rebuttals do not toll the automatic recoupment process, MACs tend to evaluate rebuttals quickly and they offer a speedier resolution to simple misunderstandings or miscommunications between providers and MACs than the appeals process.
- Appeal: The appeals process allows providers a mechanism for independent review of their overpayment decision. The timely filing of an appeal will cease all recoupment activities pending the outcome of the first and second levels of appeal, but any monies recouped prior to the filing of the appeal will not be returned to the provider until the resolution of the appeal. A provider has 120 days from receipt of a Demand Letter to file a written appeal with the MAC who issued the Demand Letter; however, the provider must file the appeal within 30 days in order to cease recoupment activities during the appeals process. There are five levels to the appeals process:
- Redetermination: The first level of appeal is a redetermination of the overpayment assessment. While the redetermination is handled by the same MAC that issued the initial determination, different individuals within the MAC conduct an independent review of the findings.
- Reconsideration: Providers may contest unfavorable redetermination decisions by requesting a reconsideration by a Qualified Independent Contractor (QIC).
- Administrative Hearing: The next stage of appeal is a hearing in front of an Administrative Law Judge (ALJ) from within the Office of Medicare Hearings and Appeals.
- Appeals Council Review: A provider may have the ALJ’s decision reviewed by the Medicare Appeals Council.
- Judicial Review: The last stage of the appellate process is a review of the Appeals Council’s decision by a federal district judge.
We Can Help You
Our attorneys have helped many doctors, hospitals, pharmacies, laboratories, clinics, and other medical service providers in their dealing with the federal government. We serve clients from across the United States and advise on the appropriate steps for contesting unfair overpayment determinations and avoiding future audits from CMS contractors such as ZPICs and RACs. Our attorneys include former federal prosecutors and experienced healthcare defense attorneys that provide competent and reliable advice.
- Nick Oberheiden has a long track record of representing healthcare businesses and professionals in disputes with the federal government as well as in civil and criminal healthcare fraud investigations.
- Lynette S. Byrd previously served the United States as an Assistant United States Attorney (AUSA), in which capacity she coordinated healthcare fraud investigations that involved the OIG, HHS, the FBI, the IRS, and other federal law enforcement task forces.
Call us today and speak to one of our experienced attorneys directly. We are available to discuss your situation in a free and confidential call, including on weekends.