HCCA Compliance Institute 2010
Auditing & Monitoring 107
April 19, 2010
Mistakes Happen: The Nuts
and Bolts of a Voluntary
Medicare Repayment
Jeffrey Fitzgerald
Faegre & Benson LLP
[email protected]
Christopher Rehm
The Pinnacle Group
[email protected]
Case Study One – Coumadin Clinic
• Typical Health System
– Operates several physician clinics through a for-profit subsidiary
– System’s Edge of Suburbia clinic operates a coumadin clinic
– Coumadin clinic supervised by an Advanced Practice Nurse (APN)
who has not enrolled as a Medicare provider (does not have a
billing number)
– After a schedule change years ago, no physicians have been
scheduled at the clinic on Thursday afternoons or Friday
– New clinic director reviews the coumadin clinic operations and
concludes that the clinic’s billing and supervision process does not
comply with Medicare’s “incident to” rules
2
Scoping the Problem
• What are the services in question?
– Professional Fees
– Ancillaries
– Drugs and Supplies
• Are there downstream concerns, referrals, tests ordered etc.?
• What are the Breakpoints?
– Scheduling Change/Billing Policy Change
– Provider Enrollment
• Identifying the Encounters
– Explicit Identification
– Estimates and Extrapolation
3
Scoping the Problem
4
Determining the Overpayment
• Explicit Identification:
–
–
–
–
Measure the cost of the investigation with the $ in question.
Available through current system reporting capabilities
Only the payments for the dates, services, and providers in question
Query System for Specific Encounters
• Identify all payments for services
– Clinic billed under same provider for all services
– Able to run service history for relevant encounters
– Amount of Overpayment
• Total paid amount for line item procedures (minus) allowable amount for line
item procedures.
– In this case allowable = zero
5
Disclosure Issues
• Is a disclosure legally required?
– The Fifth Amendment provides in part that “No
persons. . .shall be compelled in any criminal case
to be a witness against himself. . . .”
– This protection has been held to apply to criminal or
civil proceedings, whether formal or informal,
wherever such answers might incriminate the
individual in future criminal proceedings. See,
McCarthy v. Arndstein, 266 U.S. 34, 40 (1924).
– Corporations and other fictitious “persons” are not
protected by the Fifth Amendment
6
Legal Duty to Refund
• The failure to disclose an overpayment could be seen as an
unlawful effort to conceal or perpetuate a fraud
– 18 U.S.C. § 371 (conspiracy to defraud by obstructing and
impairing a government program)
– 18 U.S.C. § 1001 (concealment of and covering up a
material fact)
• The Medicare Fraud and Abuse Statute 42 U.S.C. § 1320a7b(a)(3) may impose a duty to disclose.
Whoever-- having knowledge of the occurrence of any event
affecting . . .his initial or continued right to any such benefit or
payment. . . conceals or fails to disclose such event with an
intent fraudulently to secure such benefit or payment either in a
greater amount or quantity than is due or when no such benefit
or payment is authorized,. . .shall. . .be guilty of a felony. . .
• Health Care Fraud, 18 U.S.C. § 1347
– Criminal fraud related to health care (all payer)
7
Legal Duty to Refund
• Stark II, Phase II regulations require refund of payments
made under a prohibited referral. 42 C.F.R. § 411.353(d)
• Medicare secondary payer and credit ballance regulations
• Medicare proposed a regulation that would require
repayment of known overpayments within 60 days of
identifying the overpayment. 67 Fed. Reg. 3662 (Jan.
2002)
– Regulations was never finalized
• Fraud Enforcement and Recovery Act of 2009
– Amended the False Claims Act to create liability for a
knowingly and improperly “conceal, avoid or decrease”
an obligation to repay the government
• Obligation includes an overpayment
8
Other Legal Risks
• Whistleblowers
• Employees Past and Former
• Members
• Beneficiary Complaints
• Fraud & Abuse (Hotline)
• Quality & Utilization (BCRP)
9
10
Other Legal Risks
• Whistleblowers
– False Claims Act includes incentives for
whistleblowers
• Can be rewarded up to 25% of the government’s
recovery, plus lost wages, attorney fees
– Disclosure can be a tool to prevent to prevent
whistleblowers
• Demonstrates that company is acting in good faith
• After disclosure, there is nothing for the whistleblower
to report
• Allows company to address issues on its own terms
11
Case Study One–Repayment Strategy
• Revise operational practice to comply with incident to rules
– Enroll the APN and bill under the APN’s number *, or
– Adjust schedule so that coumadin clinic only operating when a
physician is at the clinic
– Adjust charges for denied services
– Send corrected claims for unpaid/processed services*
• Repayment to MAC
– Complete repayment form (each MAC has a form)
– Depending upon total dollar amount, consider sending form with
cover letter
– Send check for total overpayment amount with form and/or letter
12
Case Study Two – Schedules Gone Bad
• Typical Health System
– Operates a large physician clinic at city center, staffed with
internal medicine physicians and physician assistants (PAs)
• Standard practice is to bill PAs incident to a supervising physician
– There has been a lot of friction between the clinic administrator and the
lead physician at the clinic
– The clinic administrator sends out several emails to the senior executive
team that claim that there is a “massive fraud” in the billing of the PA
services
– When contacted by the Compliance Department, the clinic administrator
claims to have several emails that prove that she told the lead physician
that the billing process did not comply with incident to standards, but the
lead physician to her that they needed the extra 15% to hit budget
targets
13
Conducting an Internal Review
• When to conduct an internal review
– If there is some reliable information that there may
have been a violation of law
– If there is some reliable information or a viable
allegation of intentional misconduct
– If there is a basis to believe that an audit of claims will
indicate that Medicare or Medicaid were improperly
billed
– If there is significant whistleblower potential
• Often the initially available information creates
legitimate concerns, but is inadequate to draw final
conclusions
14
Conducting an Internal Review
– Use of the attorney-client privilege
• Determine at the outset if the review is to be
protected by the privilege
– Protect a review when the results of the review are
uncertain, but potentially troublesome
– Unprivileged speculation about the issues can create
incriminating statements / documents
• Reports by consultants hired/directed by an attorney
can fall within the privilege
– Internal fact gathering may also fall within the privilege
• If review is to be privileged, segregate the file and
mark all documents as “Confidential - AttorneyClient Privilege”
15
Conducting an Internal Review
• Goals of an internal review
– Develop an understanding of potential allegations
of noncompliance
– Discover all relevant facts, including both
incriminating and exculpatory facts
– Determine if there have been incorrect
Medicare/Medicaid payments
– Avoid potential whistleblower actions / government
investigations
16
Conducting an Internal Review
• Gather information
–
–
–
–
Interview relevant personnel
Data analysis
Chart reviews and other document review
Research Medicare or relevant billing guidance
• Analyze information and create plan
– Analyze whether the conduct is more serious than
a mere billing mistake
• Employee interviews and document review
– Determine if an overpayment exists
• May require coder / consultant expertise
17
Case Study Two – Additional Facts
• Some clinic staff indicate that for a period of time, all PA services
were billed under the Medicare number of the clinic director
– Recollections vary widely about the window of time
• Supervision of PAs is very informal and there is no process to
ensure that the physician’s whose Medicare number is used was
in the clinic when the PA furnished the service
• There appears to be some consensus that PAs may have seen
patients when no physician was in the clinic
• Current practice has been in place as long as anyone can
remember
• Some physicians were aware of the 15% increase in
reimbursement when PA service billed as incident to
18
Scoping the Problem
19
Determining The Overpayment
•
Must Estimate Overpayment – Can not ID each claim
–
–
•
Internal vs. External Review
Statistical Significance
Selecting the provider(s) locations;
–
•
Clinic Director claims at relevant locations
Selecting the period to be reviewed;
–
Two years determined by:
•
•
Determined by hire date of NPPs not enrolled
Date Clinic Director began supervising PAs
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Determining the Overpayment
•
Defining the universe
–
–
–
Provider and Locations for claims as outlined
Period to be reviewed as outlined
Less;
•
Line item services not requiring incident to documentation
–
•
Vaccines, tests, blood draws
Sampling Unit and Frame
–
–
•
Unit = claims in this case
Frame = listing of all claims in the universe
Sample Selection
–
–
Design, Size
Resources – RAT STATS
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A Word About Workpapers
• Document and protect as advised
– Identifiers
• Claim Numbers and Line Items
• Data Set (ie. cluster) Assignment
– Values
• Amount Paid and Audited Value,
• Amount Overpaid/Underpaid
• Reason for Suggested disallowance
22
Case Study Two–Repayment Strategy
• Revise operational practice to comply with incident to rules
• Present reasonable approximation of overpayment amount
– Extrapolation review findings to universe of payments
– Pointe Estimate – Mean overpayment minus mean underpayment
• Repayment to MAC
– Complete repayment form
– Send a cover letter that discusses data issues and assumptions made
• Identify years, universe of claims, audit process, key assumptions
– Send check for total overpayment amount with form and/or letter
23
Case Study Three – Even More Facts
• Based upon the initial fact review at the city center clinic,
Typical Health System decides to review its “incident to”
billings for all System clinics
– Typical Health System operates a total of 15 clinics in 6 different
medical specialties
– 10 clinics use PAs or APNs
– All Medicare billing is performed at a central billing office
– Typical Health System closed 3 clinics about 2 years ago as part
of a system re-organization
• All documents except medical records related to the closed centers
are in off-site storage
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Scoping the Problem
25
Determining the Overpayment
•
Universe = All Claims Locations where NPPs practiced
•
Sampling Frame
•
Sample Selection
–
Consider Cluster Sampling
•
•
•
Significance of cluster sample size vs. overall sample size
Identify cross sets of data that can be extrapolated to the universe
Eliminate redundancies
26
The Universe and Clusters
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Determining the Overpayment
•
Create estimate for each cluster or strata
•
Calculate weighted average for pointe estimate
28
Time Period to Be Reviewed
• Period of conduct / practice in question
– Analyze coding patterns, changes in staffing, changes in
personnel, IT changes, coding guidance, consulting
advice received, etc.
• Statute of limitation
– Medicare recoupment: 4 years
• 42 C.F.R. § 405.980
• Claims Processing Manual Ch. 34 § 10.6
– Criminal conduct: 5 years
• 18 U.S.C. § 3282
– False Claims Act: 6 to 10 years
• 31 U.S.C. § 3731(b)
29
Disclosure Issues
• Decide what “type” of disclosure to make
– Overpayment refund
• Resolves overpayment issues that are not due to fraudulent
or criminal conduct
– False Claims Act “voluntary disclosure”
• Addresses fraudulent or reckless billing activity
– Criminal conduct
• If a crime has been committed, a group may decide to report
the violation
30
Disclosure Issues
• Decide “to whom” the disclosure is made
– Medicare contractor (MAC) or other payment agent
– U.S. Department of Justice
– HHS Office of the Inspector General
• OIG has a self-disclosure Protocol
– State Medicaid Fraud Unit
– Private insurance companies / HMOs
31
Benefit and Risks of Voluntary Disclosure
• Benefits
– Brings matters closer to resolution
– Element of a compliance program
– Disclosure of Medicare / Medicaid overpayments may
satisfy a legal obligation
– Limit False Claims Act and whistleblower exposure
– May limit criminal prosecution exposure
32
Benefit and Risks of Voluntary Disclosure
• Risks
– Could trigger “full blown” investigation
– The OIG guidance makes no promise of forbearance or
leniency
– Adverse publicity and damage to business reputation
– Chilling effect on employee’s willingness to report noncompliance
– An inaccurate or inept disclosure that fails to adequately
describe the problem could be viewed by the
government as a cover-up
33
34
Disclosure Issues
• What happens to a voluntary repayment?
– Carriers keep the payment, but not bound by it
– MACs to track payments in groups:
• Under OIG Self-Disclosure Protocol
• Under a Corporate Integrity Agreement
• Other voluntary refunds
– MAC to report quarterly to CMS Regional Office all voluntary
refunds received
• Division of Benefit Integrity also receives a copy
– Each MAC has a form to be used
– Could be referred to the OIG or DOJ
35
Case Study Three–Repayment Strategy
• Revise operational practice to comply with incident to rules
• Complete fact review
• Reasonably approximate an overpayment amount
• Repayment to MAC
– Send a cover letter that discusses data issues and assumptions made
– Consider a single letter or one letter per provider number
– If low dollar value for some centers, consider refund without cover letter
• Memorialize decision making process for final repayment
strategy
36
• Questions?
37
HCCA Compliance Institute 2010
Auditing & Monitoring 107
April 19, 2010
Mistakes Happen: The Nuts
and Bolts of a Voluntary
Medicare Repayment
Jeffrey Fitzgerald
Faegre & Benson LLP
[email protected]
Christopher Rehm
The Pinnacle Group
[email protected]
This presentation is for educational purposes only. Nothing in this presentation should
be construed as legal advice, and the specific advice of legal counsel is recommended
before acting on any matter discussed herein.