In May 2014, the Department of Health and Human Services, Office of Inspector General (OIG) published a proposed rule updating its regulations. The proposed rule will authorize civil monetary penalties for “failure to report and return a known overpayment,” among other issues.   The rule has outlined the penalty for failure to report and return overpayments no longer than 60 days after the date the overpayment was identified, and characterizes it as a per day penalty with up to $10,000 for each day a practice fails to report and/or return a known overpayment.  The final rule has not been determined, and there is speculation that Congress may convert the per day penalty to a “per item” or per service penalty.   Either way, the assessment of a penalty of this magnitude could ruin a practice.

The government so objects to providers who fail to return identified credit balances and overpayments that it takes legal action, charging those who fail to disclose and refund inappropriately paid, retained, and/or converted Medicare and Medicaid monies, credit balances, and overpayments with “retaining” federal property with “intent to convert it to [its] own use.

Credit balances are created due to a variety of factors that include billing and payment errors.

Major reasons include:

  • Misposted allowances—incorrect estimates of cash amounts due
  • Duplicate payments
  • Charge credits subsequent to billing
  • Full payments by both primary and secondary Insurers
  • Up-front collections—incorrect estimates of patient liability
  • Paid for services planned but not performed or for non-covered services;
  • Overpaid because of errors made in calculating beneficiary deductible and/or coinsurance amounts.

It’s not uncommon for providers to keep such overpayments until specifically asked to return them or until payers have withheld them from subsequent payments. Some providers may not only keep the overpayments but continue to bill inappropriately, thus creating even more overpayments.

What Advize Health can do for you:

  1. Analyze accounts along with EOBs
  2. Work all assigned accounts – big and small-balances
  3. Resolve all accounts – inspect for patient liability or other adjustment issues
  4. Determine if double payments were made – if so, refund as required:

Documents requested are CMS 1500 claims, all explanation of benefits (EOBs), Remittance Advices (RAs), or denials from all payers, demographic screens, transaction summary screens, copies of any refunds that have been submitted on claims, credit balance reports, debit adjustment reports, and any other documentation that a provider deems necessary to support credit balances.