Successfully Navigating Post-Payment Reviews
Successfully navigating the post-payment review and recoupment process is akin to mastering a game of chess. In order to succeed, the healthcare provider must understand the rules of the game, understand the motives of the opponent, and take calculated and strategic actions.
The post-payment, or “retroactive” review, is a process that private and government-funded health insurers use to identify and investigate improper payments for medical claims submitted by health care providers and suppliers. The aim of the post-payment review is to return or “recoup” any improper payments which were made to the healthcare provider or supplier. There are a variety of reasons that a claim can be deemed to be improperly paid and subject to recoupment. Examples include, but are not limited to:
Claims for goods or services which were deemed not medically necessary;
Claims which lacked the necessary provider signature;
Claims which lacked the provider’s NPI number or, in the case of a Medicare or Medicaid claim, the provider’s Medicare or Medicaid ID number;
Claims which are Illegible or which contain illegible supporting medical documentation;
Claims which use improper Current Procedural Terminology (CPT) or Current Dental Terminology (CDT) codes;
Claims which use improper modifiers;
Claims containing an ICD-10 diagnosis (10th Revision of the International Classification of Diseases) that is not supported by the beneficiary’s medical records; and
Claims for services that were provided by improperly licensed or improperly supervised staff.
The post-payment review begins when the private or government-funded insurer suspects a provider or supplier (collectively, “provider”) of engaging in improper billing practices.
A provider can be selected for post-payment review because the insurer identifies unusual patterns in the provider’s claims or billing practices, or because a patient or former employee reports that the provider engages in improper billing practices. If, after reviewing the findings, the private health insurer or the CMS contractor decides to place the provider on post-payment review, it will mail the provider a letter, stating that it has been selected for post-payment review. The letter will contain a request for additional documentation for a sample of claims which the insurer or CMS contractor has selected for review.[1]
It is imperative for the provider who has been placed on post-payment review to file a timely response to the post-payment review letter in order to preserve the right to appeal the audit’s findings or to argue the merits of the post-payment review.
A provider who is placed on post-payment review has several courses of action. The provider can:
Comply with the request for additional documentation and pay back the calculated amount of overpayment;
Comply with the request for additional documentation but dispute the insurer’s findings that some or all of the identified claims were improperly billed; or
Challenge the insurer’s legal right to seek repayment by disputing the sufficiency of the review and audit process, the merits of the recoupment review, or by citing potential HIPPA violations which can be triggered by complying with the documentation request.
If the provider chooses to comply with the request for additional documentation, it must collect, organize and submit the requested documentation to the requesting insurer within the provided timeframe. After the provider submits the requested documentation, the auditor will review the records to determine whether they comply with relevant coding and billing requirements. If the auditor determines that the medical claims do not satisfy relevant coding, billing, or documentation requirements, it will deem the claim as “improperly paid” and either issue a request for repayment or will offset the amount of the improper payment against current and future claims submitted by the provider. This process for collecting overpayments is known as a “recoupment.” Furthermore, if the auditor finds that a significant percentage of the claims within the review sample were improperly billed, it can extrapolate the total amount of overpayment in the sample claims to all of the claims which the provider billed during the period under review.
For example, if an auditor concludes that a provider had improperly billed 50 of the 200 medical claims which were selected for the review, the contractor can conclude that one-fourth of all of the claims which the provider submitted during the period under review was improper. As such, the contractor can extrapolate the 25% error rate to all of the claims which the provider billed during the review period. If, for example, the provider billed a total of 2,000 claims during the review period, the contractor can seek recoupment for 25% of the claims, or 500 claims.
Finally, if the insurer finds evidence of fraud, the insurer can refer its findings to the U.S. Department of Justice, the HHS Office of Inspector General, the Federal Bureau of Investigations, or the state agency in charge of enforcing state false claims laws. These agencies can impose various administrative, civil and criminal penalties on the providers, including placing the provider on pre-payment review of future submitted claims, excluding the provider from participation in Medicare or Medicaid programs, civil fines, and/or criminal liability.
Given the significant financial and legal repercussions of an adverse post-payment review, it is imperative for providers and suppliers to respond to a post-payment review as promptly as possible.
At Bull Owen Law, we help providers determine the best course of action to obtain a favorable outcome. Specifically, we can assist with:
Disputing the legality of the post-payment audit;
Disputing the insurer’s findings regarding the reviewed sample of claims; and/or
Disputing the validity or accuracy of the sampling techniques used to extrapolate the total amount of owed payments.
If your practice has been placed on post-payment review, contact us today for a free consultation.
[1] When the request documentation is issued by a CMS contractor, it is known as an Additional Documentation Request (ADR).
