If you are working for a healthcare organization, carrying out an audit of your medical claims can save you thousands or even millions of pounds.
Overpayments can happen for a number of reasons, an error in the configuration of the claim, case rate errors, or improper coding can lead to incorrect claims being paid.
If you have overpaid, then recouping that money is a matter of importance; however, it’s also worth considering whether you can claim the money back, and if you can, should you?
Statute of limitations
The first thing to consider is that there is a statute of limitations on claiming back overpayments. For example, for Medicare payments, the government has three years from the date that the payment was issued to recoup any overpayment. The statute of limitations is based on the date of the payment, not on the date that the service was actually performed.
If you make a claim for overpayment, then federal law obligates providers to report and return any overpayment within 60 days. This means that the provider is obliged to not only return the overpayment but to carry out an investigation at their end to ensure that there haven’t been further overpayments that should be returned.
Providers are not allowed to simply ignore evidence of overpayments and wait for the statute of limitations to run out! In the case of the United States v. Continuum Health Partners, Inc., Continuum Health tried to do just this by ignoring the findings of a consultant who had been brought in to carry out an audit. Continuum ended up having to pay both the overpayment and approximately £2.1 million in civil penalties.
The statute of limitations should be taken into account when carrying out your audit. Always run audits from oldest to newest so that you don’t risk missing payments that fall outside the statute of limitations.
As well as the statute of limitations at the federal level, it is important to take into account any rules on overpayment recovery set at the state level or within individual contracts.
In Financial Recovery Group‘s article on insurance overpayment recovery laws, they note that Medicaid programs in States like Florida limit recovery requests to claims paid within the last year. Some provider contracts may stipulate that after three months, the claims are final.
When designing the rules for your audit, you should take into account any rules put in place in individual contracts and ensure that any contracts with a shorter timeframe for claiming overpayments are treated as a priority for audit.
Is it worth collecting?
The final thing to consider is whether the repayment is worth collecting.
Your audit process should include a calculation of how much it will cost you to recoup overpayments in certain scenarios. For example, if a provider has since gone out of business, the cost will differ, or if the provider has moved out of state.
If the cost of recovering the overpayment is more than the amount of the overpayment itself, then it’s possibly not worth pursuing. It would be better to prioritize claims that represent a bigger overall repayment.