Physicians fight unworkable Medicare overpayment rule

Washington Organized medicine is pushing back against a Medicare proposal to recoup overpayments quickly from physicians, who would be required to go back through up to 10 years of medical records when determining if they received excess pay.

The American Medical Association and state and specialty medical organizations have called on the Centers for Medicare & Medicaid Services to clarify — or in some cases abandon — new requirements that practices must return overpayments within 60 days. About 110 groups, led by the AMA, sent an April 16 letter to CMS acting Administrator Marilyn Tavenner calling on the agency to make necessary changes before the proposal is finalized.

The AMA specifically requested several revisions to the overpayment proposal that would reduce administrative burdens for physicians significantly, said AMA Chair-elect Steven J. Stack, MD. “Current CMS initiatives, like the Medicare recovery audit program, are already in place, and conflicting requirements will make it difficult for physicians to know which guidelines to follow.”

CMS has proposed that physicians be able to review their previous 10 years of claims to identify any overpayments that might be suspected during that time frame. The 10-year look-back is inappropriate, wrote Paul A. Hamlin, MD, president of the Medical Society of the State of New York, in a March 27 letter. The medical society would support the retrospective period only if its intent was “to put the fear of the federal government into those who knowingly and willfully with malice of intent act to defraud” the Medicare program. But the consequences of innocent mistakes by physicians and practice administrators must not also be swept up by rules aimed at those knowingly committing fraud and abuse, he said.

“To subject individuals to persecution because of impossible, unworkable, and unattainable rules and regulations is unfair and might even constitute entrapment,” Dr. Hamlin wrote. “Often, many Medicare program rules are impossible to keep current or are difficult to follow, let alone comply with, without confusion, error or mistakes. Lumping billing errors and typographical errors into the mix of fraud and abuse is preposterous.”

The AMA letter also adamantly opposes the 10-year look-back window. Combing through up to a decade’s worth of records would be an “insurmountable burden” for physicians. The proposal conflicts with claims reopening and audit standards established by other Medicare statutes. In general, physicians are bound to retain records for about six years, the letter said.

For instance, Medicare’s reopening regulation allows claims to be reconsidered within one year for any reason, within four years with good cause and further back any time when there is clear evidence of fraud. The False Claims Act allows for a six-year look-back. The Health Insurance Portability and Accountability Act requires record retention for six years. However, the Medicare recovery audit contractor program, which is similar to the overpayment recovery initiative, allows for only a three-year look-back.

“We recommend [that the look-back period] be shortened to three years to remain consistent with other initiatives,” Dr. Stack said. In addition, physicians who are required to return an overpayment but disagree with that determination should be given the chance to appeal, he added.

Physicians demand clarifications

The AMA also sought clarification of what it meant for a physician to identify an overpayment. CMS had stated that the rule created an “incentive to exercise reasonable diligence to determine whether an overpayment exists.” But the rule should not imply that doctors must actively search for overpayments from a decade’s worth of claims without some piece of information that would signal that an excess payment might have been received, the Association said.

The proposed rule essentially would create an unfunded mandate that forces medical practices to conduct self audits and apply compliance plans, wrote American Academy of Family Physicians Board Chair Roland A. Goertz, MD, in an April 11 letter.

“Though often recommended business practices, they are time-consuming, expensive and never before required by Medicare,” he said. “Further troubling is that this considerable burden is not even addressed in the regulatory impact section” of the proposed rule.

The health system reform law specified that the 60-day period to return an overpayment begins when a physician practice identifies it. However, the proposed rule lacked clarity on when the two-month countdown begins in cases where several overpayments stemming from a systemic problem may exist. The Association recommended that CMS say the 60-day period begins on the day an “error-specific overpayment inquiry has concluded.”

The AMA letter also calls for adding an appeals process to the rule, because medical billing is complex, and Medicare rules can be difficult to interpret across the health care industry. The agency also has allowed for an appeals process in the recovery audit contractor program.

Consultant Gerald Rogan, MD, proposed other changes to the CMS rule that would educate doctors about potential liabilities and how overpayment situations can occur. Dr. Rogan, of Sacramento, Calif., is a former CMS medical director for a Medicare insurance carrier.

Common mistakes can create significant liabilities for doctors. For instance, a physician may mistakenly report an excess number of anesthesia units or improperly use a coding modifier when billing services, he said.

“I recommend CMS post a list of common reporting errors and supply the information as part of the provider enrollment process,” Dr. Rogan wrote. “This information will allow new Medicare providers some means to verify the practice he/she is joining is compliant with Medicare billing rules.”