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Be the first to tell the government about your overpayments

HIM Connection, November 28, 2003

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Dear Colleagues:

Discovering that your facility has been overpaid can be frightening for even the most diligent coding manager. You may worry that the government will begin an extensive investigation or decide to prosecute. However, most overpayment situations are settled amicably.

"If an individual makes an error, that's not the problem--it's how he or she responds to it," says Stephen Walker, vice president and special counsel for program safeguards at Highmark, Inc, a Medicare contractor, who expressed his personal opinions on this issue.

If you exercise appropriate diligence, you'll have the comfort of knowing that you have nothing to hide and nothing to fear, says Walker. "Someone, whether it is the government, contractor, competitors, or patients, is always scrutinizing your business. You might as well do it yourself."

Before disclosing a potential overpayment, determine what happened and why it happened, says Olson.

Organizations must acknowledge that there was a problem, define the problem, and tell how they've corrected it, advises Julie Leu, billing compliance officer at Creighton University in Omaha, NE.

Creighton University is working on a policy for handling overpayments that focuses on who is responsible for handling the paperwork, initiating the refund, and communicating with the contractor, says Leu.

Generally, providers should disclose an overpayment to their intermediary, rather than the OIG. However, go to the OIG if the overpayment is your organization's fault due to an inherent problem or an error in your billing and reporting system, says Olson.

If you know about an overpayment, but do not disclose it, the government may assume that you deliberately created or consented to the circumstances that resulted in the overpayment, says Olson.

It's hard to say you have a credible and ethical compliance program if you have identified overpayments, but haven't returned the money, says Walker.

Most overpayment situations lead to civil resolutions. If the government wants to prosecute it criminally, it has to establish intent. These prosecutions usually occur when a provider has done something egregiously wrong, such as billing for services not provided or deliberately upcoding, not because of a glitch in a computer system, says Olson.

Contractors gather information to determine whether there is a problematic pattern and any evidence of intent to warrant an investigation, says Walker. They will consider the following factors:

• Is there evidence that the provider had actual knowledge of events leading to the overpayment?
• Did the provider act in deliberate ignorance or reckless disregard of events which led to the overpayment?
• What prior education did the provider receive regarding circumstances which led to the overpayment? This includes provider bulletins, newsletters, education letters, and local medical review policies.

This week's HIM Connection was adapted from the new special report, "Pneumonia coding: Documentation, benchmarks, and DRGs." Click here for more information or to order. See the Editor's Choice section for a special HIPAA training handbook just for HIM staff.

Sincerely,

Lauren McLeod
Senior Managing Editor
lmcleod@hcpro.com

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