What to do if the feds have overpaid you
Honesty is the safest policy
One one of the most ticklish problems pro viders may encounter is what do do if they discover Medicare has unintentionally overpaid them.
From a strictly legal point of view, "laws like the Stark II statute contain an explicit requirement to refund overpayments and, thus, require disclosure," says Anita D. Lee, a lawyer in the Los Angeles office of Foley and Gardner. How ever, she notes, "most sections of the Social Security Act do not contain an express obligation either to disclose an overpayment or to repay it."
Disclosure also is favored by a provision in the Social Security Act that makes it a felony to fail to disclose facts affecting an initial or continued right to payment, if the failure to disclose is done with "an intent to fraudulently secure" such benefits.
There also is the matter of the quarterly Medi care credit balance report all providers must file, which requires disclosure of known overpayments. However, "there are issues regarding the level of certainty a provider must have as to the existence of an overpayment before there is an obligation to include the matter on a credit balance report," says Lee.
One upside to voluntary disclosure is that the federal Civil False Claims Act provides for reduced penalties when a provider promptly discloses illegal payments and cooperates with any subsequent government investigation.
"Even where the reduction in the level of punishment is not required by statute, voluntary disclosure may be advisable, as most enforcement agencies are more forgiving of those providers who self-disclose their compliance failures," points out Robert D. Sevell, another Foley and Gardner health attorney. On the other hand, are you willing to bet that the government would never discover the error in the first place, making any debate about fines and penalties moot?
Let’s say you decide to report the problem and repay the money — where do you go? Sevell says the simplest action is to approach the fiscal intermediary, carrier, or whoever initially made the improper payment and tell him or her you discovered the error on your own and you want to return the overage.
However, if the mistake involves more than just a few claims that were accidentally overpaid, you might have to deal directly with either the U.S. Department of Justice or the Office of the Inspector General (OIG).
"In this kind of situation, such a course of action should only be undertaken after serious consideration and consultation with your lawyer," Lee advises.
There also is a question of how quickly you should act. Under OIG guidelines, if a provider reports a compliance situation within 30 days of receiving credible evidence of a potential problem, most fines and penalties are reduced or eliminated, depending on the nature of the problem.
Rather than acting too fast, Lee cautions you to remember that disclosure before an internal investigation has been fully conducted involves risks and potential difficulties that should be weighed carefully.
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