Physician Overpayments: Mandatory Disclosure

I recently received a $66 refund from my physician that was held by his group for five months.  In simple terms, for a hundred and fifty days the doctor was holding onto an overpayment and did not return my insurance "excess" payment coupled with my payment longer than Federal rules allow.

In case you do not know it, physicians have a MANDATORY DUTY to disclose Medicare overpayments to the Federal Governmentwhich are over sixty days old after the date on which the overpayment was identified or the date any cost report is due. An overpayment is identified when a physician or his entity "has determined or should have determined through the exercise of reasonable diligence, that a provider has received an overpayment.”

The statutory language for this is found at 42 C.F.R. 401.305(a)(2).  Failure to report and return an overpayment creates an obligation under the FALSE CLAIMS ACT in the form of triple damages and can lead to EXCLUSION from the Medicare Program.  This applies to Medicare Parts A and B.

Reasonable diligence includes both good faith compliance, and reactive and timely good faith investigation in response to credible information of a potential overpayment. When is your overpayment identified?  Not until the overpayment is quantified.

Physicians are urged to self-report overpayments.  They should establish a mandatory compliance program which looks for overpayments.  A physician should look at their reimbursements and identity overpayments and set up a program for reporting and returning the overpayment. 

Physicians should have in place a compliance plan.  In the event of overpayments or other program irregularities, the Office Of Inspector General may consider the provider’s compliance plan as a mitigating factor in determining program sanctions. For those of you looking for the source of this law look towards section 6402(a) of the Affordable Care Act which requires any person who received  Medicare or Medicaid overpayments to report and return the overpayment to the government and to notify the Government in writing of the reason for the overpayment.