Credit Balance Overpayment Refunds: Auditing and Documenting Best Practices. Starting the New Year Right!
Failure to return an overpayment can be a violation of the False Claims Act. CMS expects agencies to have indicators of overpayments in place. Ignorance is not an acceptable excuse. Agencies are to return an overpayment within 60 days of identification or face serious potential consequences.
What is an Overpayment?
According to the Social Security Act, Section 1128J, any funds that a person/agency receives or retains under Title XVIII or XIX to which the person, after applicable reconciliation, is not entitled, constitutes an overpayment. These can include claims for services after benefits have been exhausted, payment for non- medically necessary services, duplicate payments, and payment of claims that exceeded a reasonable charge.
Watch out for Credit balances!
These are usually caused by contractual “over adjustments,” misapplication of payments, and overpayments. Your agency should have policies and procedures in place to identify and analyze your current credit balance landscape. Create a report with the current aging balance, account identifiers such as account numbers, list all payors whose funds were credited to the account, list dates of service and all charges coupled with payment dates, names and amounts.
Periodically perform an audit of your agency processes to be certain any overpayments in the credit balance landscape are identified. You must consider, if the individuals conducting the audit are qualified to do so, what methodology will be employed to identify the overpayments, and do you have a current process to return the overpayments?
Do you have adequate QA and root cause oriented processes? Evaluate the sufficiency and effectiveness of the controls necessary to ensure refund and reporting within the 60 days of identification. Be certain your agency can validate the accuracy of the credit balance reports used for operational management and agency compliance oversight.
Monitor on an ongoing basis. Be certain policies and procedures meet current regulation requirements. Make certain resolutions are accurate and be certain the controls are functioning as expected.
Be certain to note how each error was found, as required in the 60 day repayment rule. Complete the Corrective Plan of Action and the reason for the refunding of the overpayment. Have the OIG Self Disclosure protocol in place with the description of the methodology used.
Under the Final rule providers may use “an applicable claims adjustment, credit balance, self-reported refund or another appropriate process to satisfy the obligation to report and return overpayments.”
Remember, lack of compliance with the regulation can result in fines of up to $11,000 for EACH improper payment received and not returned going back 6 years.
For more information regarding Revenue Cycle Management and billing/collection for your agency, contact Carla Putnam, VP, RCM, Select Data 1.800.332.0555
Check out our FREE 30-minute webinar for OASIS-C2 corrections and more. Select Connects with Clinicians webinar on December 14, 2016. Click here to read more.
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