CMS: Ignorance not an excuse when it comes to liability

The Centers for Medicare & Medicaid Services (CMS) recently released a policy change that provides additional conditions for determining when a contractor must assume a physician, provider, or supplier should have known about a policy or rule.

Currently, CMS requires its contractors to consider at least one of three conditions when assuming that a provider, physician, or other supplier should have known about a policy or rule.

• The policy or rule is in the provider manual or in federal regulations.
• The CMS contractor provided general notice to the medical community concerning the policy or rule.
• The CMS contractor gave written notice of the policy or rule to the particular provider.

CMS has now determined that there are additional conditions that should be considered.

• A provider, physician, or other supplier is liable for overpayments it received unless it is found to be without fault.
• The contractor, as applicable, makes this determination
• The contractor considers a provider, physician, or other supplier without fault, if it exercised reasonable care in billing for, and accepting, the payment; i.e.,
• It made full disclosure of all material facts; and
• On the basis of the information available to it, including, but not limited to, the Medicare instructions and regulations, it had a reasonable basis for assuming that the payment was correct, or, if it had reason to question the payment; it promptly brought the question to the contractor’s attention.

Normally, it will be clear from the circumstances whether the provider, physician, or other supplier was without fault in causing the overpayment. Where it is not clear, the contractor shall develop the issue.

CMS provided several examples of situations in which providers, physicians or other suppliers would be liable. They include:

• The provider, physician, or others supplier furnished erroneous information or failed to disclose facts that it knew or should have known, were relevant to payment of the benefit.
• A provider, physician or other supplier receives duplicate payments.
• The overpayment resulted through misapplication of the deductible or coinsurance requirement or payment after exhaustion of benefits and the provider, physician or other supplier could have known from its own records the beneficiary’s utilization status.
• The overpayment was due to a mathematical or clerical error.
• The provider, physician or other supplier does not submit documentation to substantiate that services billed to the program were covered.
• The provider, physician or other supplier does not submit documentation to substantiate that it performed the services billed to the program where there is a question as to whether the services were performed.
• The beneficiary was not entitled to Part A benefits and the provider, physician or other supplier had reason to believe that the beneficiary was not entitled to such benefits.
• The provider, physician or other supplier billed, or Medicare paid the provider, physician or other supplier for services that the provider, physician or other supplier, should have known were not covered.
• The overpayment resulted from services rendered in a nonparticipating portion of the facility or in a bed certified for a type of care other than that furnished.
• The physician was paid, but did not accept assignment.
• Overpayment was for rental of durable medical equipment and supplier billed under the one-time authorization procedure.
• Items or services were furnished by practitioner or supplier not qualified for Medicare reimbursement.

The changes are set to take effect February 21, 2017. CMS is making it clear that regardless of whether providers know of these requirements, they will be held responsible for knowing the content. If you have specific questions about how this relates to your practice, contact the Health Law Offices of Anthony C. Vitale at 305-358-4500.