CMS ISSUES FINAL OVERPAYMENT REPORTING RULE

On Thursday morning, CMS released its final rule regarding burdens on providers and suppliers to report overpayments. We will provide a more detailed discussion later, but the important takeaways:

• The look back period for overpayments was reduced from the proposed ten years to six years in the final rule; and
• The processes for reporting overpayments are more clearly defined.

Under this rule, an overpayment must be reported and returned by the later of:

• A dates which is sixty days after the date on which the overpayment was identified; or
• The date that any corresponding cost report is due, if this is applicable.

As the term “identified” remains a crucial term, we will review the rule and have a separate discussion regarding “identification.”

BAD BIG BROTHER

Reports indicate that health insurance companies and others are “mining” data sets to make decisions regarding insurers. Reports indicate that insurers are looking at what car you drive, your VISA bill and where you shop, perhaps even where you eat, and what groups or churches you tithe or donate too.

Reportedly, if you drive a foreign made car, it is believed that you are more likely to lose eligibility for Medicaid. Others suggest that changes in shopping patterns may be an indicator of depression.

Do you have concerns about insurance companies looking at your shopping patterns, your car purchases and driving data, when you shop, and where you eat?

AUDIT AND RAC APPEALS

Two interesting developments here:

• A federal Appeals Court has reversed a lower federal court decision dismissing  a case that challenged CMS’s failure to follow the law by failing to hear and decide RAC appeals within required time periods. The three judge panel of the United States Court of Appeals in D.C sent the case back to the District Court for further consideration.
• A Senate bill continues to make some progress in its effort to reform the RAC audit and RAC audit appeals processes. The Senate bill would authorize $127 million in annual funding and includes a number of reforms to the Medicare audit process.
  • As only one example, RAC could not conduct hospital inpatient vs. outpatient reviews more than six months after the date of service if the claim for the service was submitted within three months. This should encourage faster claim submission by hospitals or their third party biller and should also increase re-bills vs. appeals of decisions.
  • Similarly, the system would track denial rates and those with the lowest denial/error rates over a two year period, would earn a RAC audit exemption for successive one year periods if the low error rate is maintained.
  • Also, RACs with low accuracy rates may be limited in their ability to request medical records. These are good first steps to solving a critical cash flow problem for hospitals that are facing long delays after less than stellar RAC audits.

This newsletter is edited by Paul Wallace of Jones ∙ Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians, practices and hospitals in contract items, federal legal compliance, practice entity creation, estate and wealth planning and similar issues.  Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or pwallace@joneswallace.com.