In 2013, the Recovery Audit Contractor (RAC) program collected nearly $3.75 billion in incorrect payments to hospitals and doctors with overpayments making up $3.65 billion of that amount. As defined by the Centers for Medicare & Medicaid Services (CMS), an overpayment occurs when a payment made to a physician or health care provider exceeds amounts payable by law.
Health care providers cannot keep money paid in error. In an effort to decrease waste, fraud, and abuse within Medicare, state and federal governments have focused on increasing regulations. Health care providers are expected to comply with these processes or risk severe consequences, such as hefty fines, exclusion from Medicare, loss of a professional license, and potentially criminal prosecution.
With stakes these high, it’s critical for health care providers to know how to avoid the errors that lead to overpayments.
How do Medicare Overpayments Occur?
To prevent overpayments from happening, we must delve into why these issues arise. Medicare overpayments can happen for various reasons, including the following:
Medical necessity errors
Processing and administrative errors
The best preventative measure to avoid overpayments is implementing direct and clear billing processes, airtight documentation, and procedures for identifying errors. At Hendershot Cowart P.C., we adhere to the sentiment “an ounce of prevention is worth a pound of cure.” We take careful steps to ensure our clients are proactively following sound practices, policies, and compliances.
When an overpayment is identified, it becomes a debt owed to the government that must be recovered. It’s crucial to be diligent and follow the appropriate reimbursement steps when a mistake occurs because a minor billing error could turn into fraud. Health care providers must report and return overpayments within 60 days of identification. This is a crucial step in ensuring that you remain compliant with the statutes and it reduces the likelihood of an audit. If you discover a Medicare overpayment, our lawyers at Hendershot Cowart P.C. are here to assist you. We can help you explore your options and find the best solution that avoids a time-consuming audit and recoupment process.
Call us today at (713) 909-7323 to discuss what steps your organization can take to prevent and detect fraudulent activity in the future.