Jeannine LeCompte, Publishing and Research Coordinator
The Centers for Medicare & Medicaid Services (CMS) regards the non-payment of credit balances as fraud and waste, so the regular monitoring of unpaid credits must become an important part of a skilled nursing facility’s (SNF) financial integrity program.
Overpayment monitoring should be conducted at least quarterly and should take the form of a data analysis from the billing system. The quarterly minimum period is mandated by federal law, which obligates providers to report and return any overpayment within 60 days after “the date on which the overpayment is identified.” A failure to report overpayments or credit balances constitutes healthcare fraud, and SNFs must have a procedure in place to ensure that all identified credit balances are refunded without delay to CMS.
It is also important to bear in mind that credit balances are not limited to CMS overpayments for submitted claims. A credit balance is also generated by any claim for a service which was later seen to have been medically unnecessary. In other words, if a claim has been submitted for a service or procedure which was not necessary, then even if that service or procedure was carried out, CMS monies must still be refunded.
SNFs should have a procedure in place to ensure appropriate overpayment policies and procedures exist. This procedure must be headed up by a senior manager.
The oversight procedure should be put in place for all third-party billing. SNFs should have contracts which ensure that their ethical standards are applicable to all third parties, and which state that they also must be in full financial compliance.
The best way for a SNF to protect itself in this regard is to obtain written declarations and documentation from all parties concerned that they are aware of the rules and regulations and are compliant with applicable laws.
The manager in charge of overseeing the credit balance and repayment process must also ensure that the 60-day overpayment rule is always adhered to, and that any discrepancies appearing on the Medicare billing are identified and addressed in a timely manner.
The report to CMS accompanying each repayment should contain a full explanation of how the credit arose, the amount involved, the extent of the period affected, and a statement on how such overpayments will be avoided in the future.
Finally, the responsible manager must prepare a full report of all overpayment issues and submit it to the compliance and ethics committee for review. That committee in turn will provide a report of vulnerabilities and appropriate corrective actions to the SNF’s governing body.
