Knowledge Base Article

My grandson is in elementary school and the first thing he reports to his parents each afternoon is how he behaved in school. His teacher uses a color scale, on which the student moves up or down depending on good or bad behavior – green is good, blue is better, but red – oh no! The one excuse I am sure his parents would never accept for bad behavior is that he did not know the rules. From an early age, life has rules and it is our responsibility to know, understand, and follow those rules. Such is the case when submitting claims and accepting payment from Medicare for healthcare services.

In November 2016, CMS released a transmittal that updates the section on Provider Liability in Chapter 3 of the Medicare Financial Management Manual. Specifically, the update adds new reasons for why a provider, physician, or supplier should have known certain services were noncovered. Section 90 of this chapter begins by stating “A provider is liable for overpayments it received unless it is found to be without fault.” To be without fault, the provider must have:

• Exercised reasonable care in billing for, and accepting Medicare payment,
• Made full disclosure of all material facts,
• Had a reasonable basis for assuming payment was correct based on Medicare instructions, regulations, and other facts, and/or
• Promptly communicated with the Medicare contractor if there was a reason to question the payment.

A provider may know or should have known a payment is incorrect if there is a Medicare policy or rule that specifically prohibits the payment. Prior to this updated transmittal, the reasons listed in the manual when a provider should have known about a policy or rule were 1) the policy or rule is in the provider manual or in Federal regulations, 2) the Medicare contractor provided general notice to the medical community concerning the policy or rule, or 3) the Medicare contractor gave written notice of the policy or rule to the particular provider. Transmittal 275 (MLN Matters Article MM9708) expands the term provider to be “provider, physician, or supplier” and adds the following reasons they should be aware of a particular Medicare policy or rule.

The provider, physician, or supplier:

1. Was previously investigated or audited as a result of not following the policy or rule;
2. Previously agreed to a Corporate Integrity Agreement as a result of not following the policy or rule;
3. Was previously informed that its claims had been reviewed/denied as a result of the claims not meeting certain Medicare requirements which are related to the policy or rule; or
4. Previously received documented training/outreach from CMS or one of its contractors related to the same policy or rule.

As a provider, what is your responsibility related to overpayments and ensuring reasonable care in billing and accepting Medicare payment?

Know the Rules

If the rules were static, this would still be a huge challenge. There are laws, regulations (e.g. Code of Federal Regulations), and sub-regulatory guidance (e.g. Medicare policy manuals). Medicare has an expansive website with information in every corner, including an educational section (Medicare Learning Network – MLN). I recommend providers subscribe to the CMS and OIG (Office of Inspector General) list serves at a minimum. Also providers should have a thorough knowledge of the Medicare Benefit Policy, Claims Processing, and National Coverage Determination (NCD) manuals. Then there is the website of your Medicare Administrative Contractor (MAC) and their Local Coverage Determinations (LCDs) and coverage articles. It is an overwhelming amount of information to digest so I also recommend subscribing to newsletters from some reputable healthcare consultants/educators who can target key issues and provide relevant information in an easy to read, understandable format. Hopefully you find this Wednesday@One newsletter serves this function well.

Keep Up with Rule Changes

Unfortunately, the rules are not static – they are ever changing at a rapid pace. The list serves, websites, and newsletters mentioned above should address the changes also. More specifically, watch the Medicare transmittals, most of which are converted into the easier to read and understand format of MLN Matters articles. The transmittals provide updates of Medicare sub-regulatory guidance. All the MACs have a news section on their websites for updates and specific webpages related to coverage policies and medical review. There are major rule changes on an annual basis for the Inpatient Prospective Payment System (IPPS), Outpatient Prospective Payment System (OPPS), Physician Fee Schedule, etc. Medicare provides fact sheets related to these rules and numerous independent newsletters also offer summaries and in-depth analyses of the key issues.

Understand the Rules

Interpreting the rules correctly is no small task. Once again all of the references mentioned above are helpful but a focus on Medicare review activities to understand Medicare expectations is extremely helpful here. The medical review webpage areas of the MAC websites, OIG reports, the Medicare Quarterly Compliance Newsletter, etc. often provide more granular details on what is expected to comply with certain rules. These issues are also the more “at risk” issues and a good place to focus your internal efforts as well.

Know Your Facility History of Billing Compliance

Notice that the third existing reason why providers “should have known” and all four of the new reasons relate to the provider’s own history of compliance. Facilities need to know if they have been notified, investigated, audited, had claims denied, or educated due to noncompliance with a particular policy or rule. This also includes having been put under a Corporate Integrity Agreement (CIA). If so, your facility has no excuse for not knowing these rules.

Have Appropriate Processes

Knowing the rules is of no benefit unless you correctly apply the rules to your facility’s practices. I will not say much about this, because after all, this is what providers do, so you know how to address it. Internal policies and procedures to ensure appropriate processes are necessary as is employee education and training.

Internal Communication

The importance of communication between departments cannot be overemphasized. For example, who within the facility knows the compliance history referenced above and who within the facility is responsible for keeping up with rule changes and disseminating that information to the affected departments? A team approach is required for education and establishing processes. Be sure to include all key stakeholders.

Checks and Rechecks

Oversight of processes and compliance with the rules is also necessary. Such oversight can be in the form of internal monitoring, internal audits, or audits with contracted external consultants or auditors. This process should start by identifying risk areas and developing an overall compliance audit plan. I recommend considering the issues Medicare agencies and entities are reviewing (such as the OIG Annual Work Plan, MAC medical review topics, etc.)

The tasks of knowing, understanding and implementing processes to keep up with all of the Medicare policies and rules may seem overwhelming, but it is the cost of doing business with Medicare. Like in elementary school, you have to know the rules and you have to comply or you do not get a star for the day.