HCFA may get tougher in disputed payment talks
Did three agencies get special treatment?
Providers involved in negotiations about alleged Medicare overpayments should be prepared to receive an extra icy reception from government lawyers.
The reason: a General Accounting Office (GAO) report saying the Health Care Financing Administration (HCFA) circumvented the law by giving special treatment to three major providers when it agreed to accept only $120 million — or about 36% — of $332 million in alleged overpayments.
As a result, HCFA officials are extremely careful to avoid any appearance of playing favorites when it comes to the recovery of possible overpayments.
"I am alarmed that these overpayments were never reviewed by HCFA’s own lawyers or the Department of Justice. The evidence suggests that HCFA staff short-circuited the routine process because of pressure applied by then-HCFA administrator Bruce Vladeck," says Sen. Susan Collins (R-MA), chairwoman of the Senate Governmental Affairs Permanent Subcommittee on Investigations. Vladeck, who now handles health care issues for a major Washington law firm, was HCFA’s top official from 1993 to 1997.
The GAO found HCFA circumvented the standard process for settling overpayment claims against Medicare providers in cases involving New York City Health and Hospitals Corporation, Los Angeles County Department of Health Services, and Visiting Nurses of New York.
Testifying before the Senate, Vladeck denied any wrongdoing. "I do not believe the providers think they received sweetheart deals,’’ he said.
Even the GAO admitted it found nothing illegal about those settlements. However, its investigators did ask why those settlements were never reviewed by HCFA or Justice Department lawyers. Also, the settlements contained a confidentiality clause preventing public discussion of the details of the agreement.
Indeed, the "evidence suggests that . . . [Medicare] would have prevailed for the entire amount had the matter been litigated,’’ the GAO concludes. The three overpayment claims found by GAO constituted 66% of all Medicare overpayments over $100,000 since 1991, according to government records.
HCFA settled the claim against Visiting Nurses Services of New York in 1995 by accepting $67 million of the approximately $98 million owed by the home health agency. In 1996, HCFA accepted $25 million in payment of the $155 million owed by New York City Health and Hospital Corporation. HCFA made the settlement before a hearing could be held by HCFA’s Provider Reimbursement Review Board (PRRB), the administrative appeals panel that normally reviews such disputes.
In 1997, HCFA also agreed to accept $28 million of the $79 million in overpayments owed by Los Angeles County before a PRRB hearing was held, according to the GAO.
As a result of the questions and allegations raised in the GAO report, HCFA administrator Nancy-Ann DeParle has issued new guidelines clarifying procedures for processing disputed provider payments. Under the new rules:
• Only Medicare’s chief and deputy financial officers are authorized to approve any compromise on or termination of debt collections.
• Medicare no longer will agree to keep settlements with providers confidential.
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