Allegations by federal or state authorities that a healthcare organization has received a Medicare overpayment can lead to a challenging period marked by intense scrutiny and potential legal consequences. It is imperative to approach this situation with a strategic and informed response.
One of the most important steps is to learn the basics of the process. The following will dive into a few of the more common questions that those in this situation ask when trying to figure out the best course of action.
How do overpayments happen?
Incorrect coding, an administrative error, or a processing issue are all examples of mistakes that can result in an overpayment from Medicare or Medicaid.
How do officials discover overpayments?
Federal and state agencies may investigate and flag organizations for overpayments or the organization itself may notice the issue and self-report. Another route to discovery involves whistleblowers. Individuals may be motivated by the potential for future financial gain if they can establish that the organization received an overpayment. This is because the whistleblower can get a portion of any final award. As shown in a recent case against Cigna Group, these awards are often large. In that case, the whistleblower will get over $8 million of a $172 million payout.
How will I know if my organization received an overpayment?
If review or completion of an internal audit does not discover the issue, the federal or state agency will likely notify your organization of an overpayment through a demand letter. At that time, you have various options which include rebutting the finding, appealing the overpayment, or moving forward with payment options.
What are the possible consequences for an overpayment?
The consequences can be severe and may include allegations of a violation of the False Claims Act. If successful, these allegations can result in penalties such as:
- Mandatory restitution;
- Additional fines;
- Civil monetary penalties; and
- Exclusion from Medicare and Medicaid programs.
Depending on the details of the allegations, officials may also push for criminal charges that could include the threat of imprisonment.
Attorney John Rivas is responsible for this communication.
