CMS Voluntary Refunds -Concerns for Providers

CMS Voluntary Refunds -Concerns for Providers

William OMalley

Medicare expects providers to exercise care when billing and accepting payment. Medicare also expects that providers will promptly bring incorrect payments to the Medicare Administrative Contractor’s (MAC) attention.

First Coast Service Options (FCSO), on December 17, 2021, issued a notification to Medicare providers explaining that, at times, providers receive incorrect payment, such as payment for services/items not covered or payment for erroneously billed items or services. They then indicate that if a provider should receive an incorrect payment, they should send a refund to the MAC. Finally, FCSO advises that unless a refund is made, an overpayment will be established when the error is identified by the MAC, and this becomes a debt due to the Medicare program.

The Centers for Medicare and Medicaid Services (CMS) on September 30, 2021, issued many changes to chapter 4 of the Medicare Program Integrity Manual (MPIM) (Chapter 4 – Program Integrity). These changes were effective October 12, 2021, and implemented on November 10, 2021. Among the many changes was a warning of sorts to providers and suppliers, buried in the text of Section– MAC and UPIC Coordination on Voluntary Refunds.

This particular section addresses the activity between the MAC and the Unified Program Integrity Contractors (UPICs) when the MAC has received a voluntary refund from a provider or supplier. Under this particular section, if there is a voluntary refund combined with either suspicion of inappropriate payment or if a provider/supplier is under an active investigation, the UPIC is required to perform its own investigation.

As part of the coordination between the MAC and the UPIC, they must establish a Joint Operating Agreement (JOA) to understand and delineate their respective responsibilities. One of those responsibilities includes the MAC advising the UPIC, on a regular basis, regarding all the involuntary refunds it has received. Between the two entities, the JOA must outline which of them is to send the required annual calendar year information to any provider/supplier that submits a voluntary refund during that calendar year. This information is required to advise the provider/supplier of the following:

The acceptance of a voluntary refund in no way affects or limits the rights of the Federal Government or any of its agencies or agents to pursue any appropriate criminal, civil, or administrative remedies arising from or relating to these or any other claims.

Effectively, this warning advises the provider or supplier that if they send or have sent a voluntary refund to the MAC, the MAC is required to advise the UPIC. Further, the sending of the voluntary refund could trigger a UPIC investigation and may lead to other audit or investigative Federal Government activity. As such, if you receive an incorrect payment, it’s important to understand the basis of the incorrect payment, and if warranted because of your own process issues or limitations, or you are under an active investigation, you should consult an attorney before refunding any monies.