60-Day Overpayment Final Rule: Part II

March 29, 2016

PolsinelliReimbursement Institute

Bragg Hemmebhemme@polsinelli.com

Joan Killgore jkillgore@polsinelli.com

Kelly Schulzkschulz@polsinelli.com

Roadmap

Welcome to the Polsinelli Reimbursement Institute Brief Recap of the Final Rule Impact of the Final Rule on:– Transactions– Fraud and Abuse Analyses– Investigations and Audit– Overpayments Related to Cost Reports– Other Payers

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RECAP OF THE OVERPAYMENTS RULE

Brief History

Final Rule (Feb. 12, 2016)

Effective Date: March 14, 2016

• Overpayments under Medicare Parts A and B must be reported and returned within 60 days of identification or the date any corresponding cost report is due.

• An overpayment is “identified” when a provider or supplier has or should have, through the exercise of reasonable diligence, determined that it has received an overpayment and quantified the amount of the overpayment.

• Refund overpayments identified “within six years of the date” overpayment was received

Claims-Based Overpayments

Start Here if N

ot

Quantified

Start Here if Quantified

IMPACT ON TRANSACTIONS

Impact on Transactions

For purposes of CMS - repayment obligation follows the provider agreement– Transaction document(s) – assignment of

liability/indemnification Issues identified during pre-March 16, 2016 audits,

but not yet repaid– Need to go back as appropriate

Have to hit the ground running post-close– Implement updated audit procedures and processes – Assembling resources

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IMPACT ON FRAUD AND ABUSE ANALYSES

Stark Law SRDP Submissions

SRDP Submission prior to March 14, 2016– Business as usual – no need to resubmit

SRDP Submission on or after March 14, 2016– Subject to 6 year lookback, BUT… “CMS is only

authorized under the Paperwork Reduction Act to collect financial analysis of overpayments that occurred during a 4-year time frame”

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Stark Law SRDP Submissions

SRDP Submission prior to March 14, 2016– Business as usual – no need to resubmit– 60 day period is tolled

SRDP Submission on or after March 14, 2016– Subject to 6 year lookback, BUT… “CMS is only authorized under

the Paperwork Reduction Act to collect financial analysis of overpayments that occurred during a 4-year time frame”

Centers for Medicare & Medicaid Services Voluntary Self-Referral Disclosure Protocol, Frequently Asked Questions (updated March 16, 2016)https://www.cms.gov/medicare/fraud-and-abuse/physicianselfreferral/downloads/faqsphyselfref.pdf

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Stark Law SRDP Submissions

SRDP Submissions on or after March 14, 2016 are subject to 6 year lookback, BUT…– Until the OMB approves revised 6 year collection,

providers and suppliers submitting to the SRDP have no duty to provide financial information beyond the 4 year authorized time frame.

– Until notification of changes to the SRDP, providers and suppliers submitting to the SRDP may voluntarily provide financial information from the fifth and sixth years.

Once disclosure is submitted – 60 day repayment period is tolled

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Anti-Kickback Review

Lookback period 6 years Reporting to DOJ or OIG– Once disclosure is submitted – 60 day repayment

period is tolled Reporting to CMS?– Report overpayment to CMS, CMS forwards to

the OIG, and 60 day repayment obligation is suspended until kickback matter is resolved

Innocent bystander?

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IMPACT ON INVESTIGATIONS AND AUDITS

The Rule Overpayment must be reported and returned

within 60 days after the date on which “identified”– “Identified” an overpayment when have, or should

have through exercise of reasonable diligence, determined there was an overpayment and quantified the amount

– “Reasonable Diligence” includes• Proactive compliance activities (like routine internal audits)• Reactive compliance activities (like investigations)

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Proactive Diligence Requirements

Robust and appropriate compliance program– More than just policies on paper– Buy-in from top of the organization– Effective training– Clear lines of communication / reporting– Qualified compliance officer

Audit protocols– Plans for what is being audited internally each year– Include audits of your compliance program – is it working?

Risk Assessments

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Reactive Diligence Requirements

Reactive diligence based upon– Credible evidence– Identification and quantification– Report and return

Baseline: 6 months, followed by 60 days to repay

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Credible Evidence

When are you on notice of need to investigate?– Subpoena– Audit request– Internal audit / monitoring (proactive reactive)– Internal / external reporting (hotline, etc.)

Will be a factual determination

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Scope of Investigation

Fact dependent Scope of investigation– Have template plans / protocols ready– Know your internal resources– Review past concerns and understand when you

may need outside resources to assist (consultants, auditors, attorneys)

– Identify your look back period (is it 6 years?) Certain investigations may need to be conducted under

the attorney-client privilege

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What can you do now to prepare?

Ensure compliance structure, including procedures for identifying and investigating issues, is in place

Ensure audits and risk assessments performed

Know who will be investigating and identify internal and outside resources you may need to use

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OVERPAYMENTS RELATED TO COST REPORTS

Cost Report Overpayments

Where interim payments are made based on estimated costs, an overpayment is not deemed to exist until applicable reconciliation

Applicable reconciliation occurs and refunds due when:– The cost report is filed (initial or amended),– If related to updated SSI ratios from CMS, the final reconciliation

of the cost report,– If part of an outlier reconciliation, the final reconciliation of the

cost report If issue identified in audit with respect to one cost report, it is

“credible evidence” of a potential overpayment on other cost reports within the 6 year look back

Cost Report Overpayments

No change in reopening rules, but given timing in getting an NPR (3-4 years) and subsequent 3-year reopening period, 6 year look back period likely covered

Examples:– Overpayment discovered during preparation of cost report

Reconcile and refund when cost report submitted– Overpayment discovered prior to NPR Submit amended

cost report and refund– Overpayments discovered after NPR Seek reopening to

amend and refund

IMPACT ON OTHER PAYERS

Other Payers

Final Rule applies only to Medicare Parts A & B What is lookback period for other payer???– Medicare Advantage Organizations– Medicaid FFS– Medicaid MCO

Considerations:– Application of ACA – Contracted Status– State Law– Operational/Administrative Burden

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