So, Medicare says you owe . . .
What are options in the face of overpayment?
It’s not uncommon for home health agencies to discover Medicare has over-reimbursed them. Owing service providers nothing more than a 15-day notice, Medicare then expects to be re-reimbursed for its oversight, an often impossible task if the notice has spent several days lingering at the post office or, worse yet, if it was delivered to an incorrect address.
And there often lies the rub. James Murray, deputy counsel for the National Association for Home Care’s (NAHC) Center for Health Care Law (CHCL), explains the "regulations require that providers have 15 days from the date of notice to respond. The problem is that they are rarely given that because intermediaries sometimes give them only 15 days from the letter date."
Authorized by Congress to collect, Medicare is within its legal rights to recoup payments from the patient beneficiary if it’s unable to collect from the service provider. It can go so far as to dock the beneficiary’s Social Security payments. According to a statement by NAHC, the statute "provides the authority to Medicare to suspend payment immediately in the event of an alleged overpayment due to suspicions of fraud or to suspend payments for alleged overpayments that are nonfraud-related after a 15-day notice to the provider of services. This suspension authority creates the power to act on a suspected overpayment even if the Medicare program has not made a final determination of an actual overpayment."
Do agencies have any recourse? Or must they simply pay promptly and without complaint? What if your intermediary sent you an incorrect notice of overpayment? How do you defend yourself? The best defense in these cases is a strong offense. The following outline provides a general how-to when it comes to defending your agency.
o Preparing your defense.
If your agency finds itself on the receiving end of a notice of Medicare overpayment, the first and most obvious step is to determine on your own whether or not an overpayment truly occurred.
Handling such a task within a short period of time can tax even the most organized administrators. Experts suggest agencies have a good idea at all times of the projected annualized patient census as well as a sense of the agency’s annualized total costs and visits. NAHC members may visit www.nahc.org for a list of formulas that can be used to determine these figures. With this information in hand, its easier and faster to determine the veracity of Medicare’s statement.
If you believe you’re right, be prepared to rebut Medicare’s notice with hard facts. This may mean using a detailed trend analysis for the fiscal year or a patient census count from the interim payment service (IPS) base year.
Running regular reports can be a terrific boon because your rebuttal must be presented within 15 days. If it’s impossible to hit the deadline, agencies can seek an extension from their intermediary. Once you have received a notice, says Murray, contact your intermediary immediately, especially if you feel you will need more time to address the issue. "You will either need to send payment or a request for an extension," he adds.
Provider may have no recourse
There are some instances, Murray points out, in which the provider has little or no recourse. "The notice of overpayment is submitted in different forms," he explains. "It could be for a cost adjustment, which would then allow for appeals, or it could be a demand for reimbursement involving the denial of claims as the result of an [Office of the Inspector General] audit. Then the agency should undertake an immediate appeal.
"The trouble with an IPS overpayment notice is that often there is nothing to appeal because it may have been issued prior to the provider filing a cost report or filed by the intermediary in anticipation of an overpayment. Then there is little the provider can use to challenge the overpayment demand," he states.
o Checking up on the intermediary.
Intermediaries are fallible. It’s a wise second step to determine whether or not the intermediary has used "the appropriate overpayment recoupment demand process," noted the NAHC report. "Generally, Medicare intermediaries have provided home health agencies with a 15-day rebuttal period. . . . However, in some instances, the intermediary has instituted recoupment proceedings and rate adjustments before it reviews and responds to any submitted rebuttal."
If such a discovery is found to be true, home care agencies should immediately report this to the intermediary’s management staff and, if necessary, the Health Care Financing Administration’s (HCFA) regional office.
o Requesting an overpayment recoupment waiver.
Under 42 USC § 1395gg: "Recoupment of an overpayment can be waived where it is determined that the provider of services is without fault in receipt of that overpayment." For this reason, the Center suggests agencies demand their intermediaries "issue a determination as to the agency’s entitlement to a waiver of recoupment."
In an example given by NAHC citing a notice of IPS reimbursement overpayment, an agency is "without fault" when:
— Home health agencies that exceed the per-beneficiary limit while providing Medicare-covered home health services within the scope of the benefit are found without fault in that the agency is obligated to meet the patient’s needs in a safe effective manner under the conditions of participation and that to have reduced services to such patients under their level of need would have deprived the patient the full scope of the Medicare benefit or jeopardized the patient’s safety.
— Home health agencies were informed by way of a January 1998 letter from HCFA that they were prohibited from discriminating against Medicare patients in relation to admissions and discharge from services. As a result of agencies indiscriminately accepting Medicare admissions, many agencies ultimately served patients whose costs led to the agency exceeding the aggregate per-beneficiary limit.
— The IPS per-beneficiary limits were not provided to home health agencies on a timely basis consistent with federal law.
o Paying the overpayment.
In the event an agency must make the prepayment, agencies should consider requesting an extended payment option. Forms are available to the provider through section 2224 of the Health Insurance Manual 13 and follow the format set out in section 2220, Murray notes.
Intermediaries have been instructed by HCFA to be lenient in granting the option of a 12-month repayment plan, he adds. "The problem is that we know from experience and discussions with HCFA officials that the terms for the approval of an extension are subjective. So with two comparable providers with similar situations, one could have the plan approved as submitted and the other could be put through hoops. It’s really impossible to determine the logic for the evaluations because there are none. It’s wise then for providers to obtain political support when submitting requests given the review process."
Once an approval has been granted, agencies should carefully review the terms. "Repayment plans may be issued without interest," says Murray, "if they’re related to IPS and limited to a 12-month term. Providers should really push for interest-free reimbursement in such cases, at the very least for the first 12 months."
Beyond the first year of repayment, the current interest rate as set by the Treasury Department will apply. Agencies that require more than the 12 months must direct their request to the intermediary, as in the former case, but await final approval from HCFA.
Agencies must offer detailed documents showing a demonstrated financial need for an extension, including a cash-flow statement and at least two credit rejections from private sources. Along with the request for an extension plan, the agency must include the first payment.
In the worst-case scenarios, NAHC’s Center for Health Care Law recommends agencies look into the Federal Debt Claims Collection Act for "certain procedural protections and opportunities for compromise of the debt collection." However, the Center notes, enforcement of such procedures would in all likelihood only be granted as the result of a lawsuit held in a federal district court.
There is also the option of declaring Chapter 7 or Chapter 11 bankruptcy. The resulting dissolution or reorganization may provide some protection to "suspension of payments by the Medicare program that are designed to recoup previously determined overpayments."
Whatever your course of action, it’s always good to seek counsel, not only legal but counsel from other agencies that may have had similar experiences. At press time, NAHC was preparing a lawsuit to challenge Medicare’s recoupment program for IPS overpayments.
Sources
• James Murray, Deputy Counsel, National Association for Home Care, Center for Health Care Law, 228 Seventh St. S.E., Washington, DC 20003. Telephone: (202) 547-7424.
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