Jeannine LeCompte, Compliance Research Specialist
Skilled nursing facilities (SNFs) which use Medicare or Medicaid programs as a funding source are likely to at some stage experience credit balances or overpayments. Dealing with them in a speedy manner is essential to maintain compliance with the regulations set by the Office of the Inspector General (OIG). A credit balance is an excess payment made to a healthcare provider as a result of a patient billing or claims processing error.
The OIG has a set of rules dealing with the regulation of excess payments. SNFs must have set procedures in place to provide for the timely identification, accurate reporting, and repayment of all credit balances. This also applies to any credits due to residents.
Any attempt to intentionally conceal an overpayment or credit balance is a criminal offence and can also expose a provider to civil liability under the False Claims Act.
The period of grace allowed to report and return any overpayment is also defined by law: providers are obligated to report and return any overpayment within 60 days after “the date on which the overpayment is identified.” The word “identified” is significant, as there can be a disparity between the date of the overpayment and the date of its discovery.
To avoid liability from taking too long to identify overpayments, policies and procedures should be in place so that such payments are continually monitored. This will ensure that any discrepancies are detected.
In addition, the facility’s compliance and ethics program report from the compliance and ethics officer to the governing body should include the topic of overpayments. The report must contain an evaluation of third-party billing contractors, employees, physicians, vendors, and other agents, to ensure compliance with the law.
An education and training program should be provided for all business office managers, accounts receivable personnel, third-party billing companies, accountants, Chief Financial Officers, etc., so that they are aware of the regulatory issues. An important component of the education program should be to ensure that participants are aware that a failure to report overpayments or credit balances constitutes healthcare fraud, with all the sanctions that brings.
The internal monitoring system in place should show that the facility adheres to the 60-day overpayment rule. An incident tracking system should be implemented to ensure that the 60-day grace period is not exceeded.
A report to the authorities on any overpayment should identify the issue, the amount involved, any patterns or trends within the billing system, the extent of the period affected, and the circumstances that led to the overpayment.
Finally, SNFs should never neglect the issue of resident funds. CMS requires SNFs to convey within 30 days of the discharge, eviction, or death of a resident, a full and final accounting of the resident’s funds. In the case of death, this accounting must be provided to the individual or probate jurisdiction administering the resident’s estate.
