The False Claims Act makes you – and your provider – responsible for medical billing errors and misbilling claims even if you use a billing company. The massive fines – more than $20,000 per violation – can cripple your practice.
This quick start guide gives you key ways to prevent accidentally misbilling claims so your practice is on the up and up and not on the line for thousands in penalties.
Billing Errors Count Big Time Under the False Claims Act
The False Claims Act makes it a crime for you to defraud the government. In plain English, that means you and your providers are liable for any false information or claims you submit to any federally funded healthcare program such as Medicare and Medicaid. This includes:
- billing for services you didn’t provide
- falsifying information to receive reimbursements
- double dipping on a claim by submitting it twice.
Research and Identify Overpayments Within Required Timeframe
The financial penalties for violating the False Claims Act are massive – $21,563, per offense. Plus, the CMS Final Rule for Reporting and Refunding Overpayments made it the provider’s responsibility to research, report, and repay all overpayments, within a very specific timeframe, or be subject to False Claims Act penalties.
Critical: It’s your job as a provider to exercise reasonable diligence.
This means you don’t get off the hook because you didn’t know an overpayment existed. It’s your duty to proactively seek and determine if you’ve received an overpayment. To do this, you must audit your claims to determine whether you’ve overcoded, unbundled, or done anything resulting in you receiving a duplicate payment or a payment you shouldn’t have received, and you must perform credit balance checks every 30 days. Important timelines:
- How far back must you go? The look-back period is 6 years, so you are required to review and repay any overpayments handled over the past six years.
- How long do you have to identify the overpayment? You have up to six months to identify any overpayment amount.
Report and Refund Overpayments Using This Schedule
You have 60-days to report and return the overpayment, but that doesn’t begin until after you identify the overpayment. So essentially you have up to 6 months to figure out how much you owe, and two months to pay it back.
What if you don’t pay it back?
Each claim under the False Claims Act that you don’t return timely is worth $21,563. A reverse false claim is one you may have filed innocently that you sit on and don’t pay back, but be warned, it will still result in a penalty. You aren’t liable under the False Claims Act for filing an innocent but erroneous claim. However, you are liable under the False Claims Act if that innocent claim is not refunded. These refund rules apply to all overpayment, innocent or not. So a $15 mistake can quickly become a $21,563 loss. Ouch!
Get Help With Overpayments
When it comes to the False Claims Act, it feels like the cards are stacked against providers — and unless you fully understand how to identify what constitutes an overpayment, how to determine if it falls in the lookback period, and how to fight each claim in question, you’ll come up enormously short. And there are so many details to consider when determining how to handle overpayments.
For example, can you offset repayments with money that Medicare owes you? Can you use extrapolation, and audit a small number of claims and apply the error rate to all claims without having to audit each claim?
That’s why you need help! David Vaugh, JD, CPC, answers these questions, and he offers real-life case studies in his online training session where he walks you through related False Claims Act changes. You can be better prepared to handle these regulatory changes and avoid enormous fines.
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