The proposed regulations specify that a person has identified an overpayment if the person has actual acknowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment.  CMS gave the following as examples of when an overpayment has been “identified” for purpose of triggering a repayment obligation:

• A provider or supplier reviews billing or payment records and learns that it incorrectly coded certain services.
• A provider or supplier learns that a patient death occurred prior to the service date on a claim that has been submitted for payment.
• A provider or supplier learns that services were provided by an unlicensed or excluded individual on its behalf.
• A provider or supplier performs an internal audit and discovers that overpayments exist.
• A provider or supplier is informed by a government agency of an audit that discovered a potential overpayment, and the provider or supplier fails to make a reasonable inquiry.
• A provider or supplier experiences a significant increase in Medicare revenue and there is no apparent reason (such as the addition of a new partner added to the practice or a new focus on a particular area of medicine) for the increase.

An identified overpayment must be reported and returned by the later of either of the following:  (i) the date which is 60 days after the date in which the overpayment was identified; or (ii) the date any corresponding cost report is due, if applicable.  The deadline for reporting overpayments will be suspended when either: (1) the OIG acknowledges receipt of a submission through the OIG Self-Disclosure Protocol until such time as a settlement is entered, the person withdraws from the OIG Self-Disclosure Protocol, or the person is removed from the OIG Self-Disclosure Protocol; or (2) CMS acknowledges receipt of a submission to the Self-Referral Disclosure Protocol under the federal Stark law until such time as a settlement agreement is entered, the person withdraws from the Self-Referral Disclosure Protocol, or the person is removed from the Self-Referral Disclosure Protocol.

The proposed rule also provides for a 10 year look back period.  Therefore, under the proposed rule, an overpayment must be reported and returned if a person identifies the overpayment within 10 years of the date the overpayment was received.

CMS has announced its intention to standardize the form that will be used to report an identified overpayment.  The proposed regulations specify that the following information needs to be included when a report of an overpayment is made:

• The provider’s or supplier’s name.
• The provider’s or supplier’s tax identification number.
• How the error was discovered.
• The reason for the overpayment.
• The health insurance claim number, as appropriate.
• Date of service.
• The Medicare claim control number for the claim that was overpaid, as appropriate.
• The Medicare NPI number.
• A description of the corrective action plan to ensure that the error does not occur again.
• Whether the provider or supplier has a Corporate Integrity Agreement with the OIG or is under the OIG self-disclosure protocol.
• The time frame and the total amount of refund for the period during which the problem existed that caused the refund.
• If a statistical sample was used to determine the overpayment amount, a description of the statistically valid method used to determine the overpayment.
• A refund for the amount of the overpayment.

While the proposed rule, when adopted, will standardize procedures for reporting of identified overpayments,  Medicare providers and suppliers should be aware that the 60 day time frame, and the corresponding reporting obligations for reporting an overpayment, are already in effect.,  These obligations were imposed by a provision of the Affordable Care Act that became effective in 2010.  Health care providers who suspect that an overpayment has occurred should proceed diligently to identify whether an overpayment occurred, and to fulfill their corresponding reporting obligations once an overpayment has been identified.  Providers and suppliers should work closely with legal counsel to ensure that they are investigating compliance issues and submitting overpayment reports in conformity with applicable legal requirements.

On February 6, 2012 at 44 N.J.R. 202, the State Board of Pharmacy published a notice of the pre-proposal of amendments to its rules and the pre-proposal of new rules governing the compounding of sterile and non-sterile preparations in both retail and institutional pharmacy practice settings.

On February 6, 2012 at 44 N.J.R. 214, the State Board of Psychological Examiners published notice of its proposal of amendments to its rules governing permits and examinations.

On February 6, 2012 at 44 N.J.R. 229, the Department of Human Services published notice of its adoption of amendments to its rules governing dental services under Medicaid.

On February 6, 2012 at 44 N.J.R. 274, the Department of Banking and Insurance published notice of its adoption of amendments to its rules governing internal and external appeals processes for health maintenance organizations, insurance companies, health service corporations, hospital service corporations and medical service corporations.

In the alert, the OIG cautions physicians to scrutinize an entity before the physician reassigns his/her Medicare payments to ensure that the entity is a legitimate provider of health care.  Any physician who reassigns his or her right to Medicare payment must complete and sign off on a CMS Form 855R. If a physician terminates the relationship giving rise to the reassignment, the physician should also file the CMS Form 855R, indicating that the previous reassignment relationship is terminated.  While the entity can file the form terminating the reassignment on its own, physicians should be proactive in this regard to make sure that Medicare has been notified when the relationship terminates.

Physicians should also be proactive by having written agreements with any entity to whom the physician reassigns his or her right to Medicare payments, giving the right to review any bills submitted under the physician’s name to confirm that services are being billed accurately.  Under the Medicare reassignment rules, with respect to the Medicare program, both the physician and the billing entity have joint and several liability for any Medicare overpayment relating to a reassigned claim.  Under these same rules, the physician has the unrestricted right to access claims submitted by the entity for services provided by the physician.

The Department’s publication of the survey results is another step in the movement towards the transparency of health care facility performance information and the sharing of such information with consumers.  This is similar to what CMS is doing for nursing homes and hospitals through its publication of data on the federal Nursing Home Compare and Hospital Compare websites.

Last week S-1210/A-1836 was introduced, which would, if passed again by the Legislature and signed by the Governor, require surgical practices to be licensed by the Department.  We will continue to monitor this bill and report further action.

On January 3, 2012 at 44 N.J.R. 117, the Division of Consumer Affairs issued notice of its adoption of amendments to its rules governing the manner of issuance of prescriptions for Class II controlled dangerous substances.  Physicians will be able to issue multiple prescriptions for Schedule II medication for a total of a 90 day supply.  The rules will allow the pharmacist to accept up to three separate prescriptions at one time, which are to be held by the pharmacist and filled at 30 day intervals.

On January 17, 2012 at 44 N.J.R. 151, the Department of Health and Senior Services published notice of its adoption of new rules governing registration standards for surgical practices.

On January 17, 2012 at 44 N.J.R. 163, the Department of Health and Senior Services published notice of its adoption of amendments to its rules governing health care facility infection reporting.

This case is interesting because, like the Garcia case that eventually ended in legislation addressing physician ownership in freestanding ambulatory surgery centers, it arose out of a payment dispute.  Selective Insurance denied claims submitted by Dr. Rothman for EMGs provided by a PA in Dr. Rothman’s practice and Dr. Rothman appealed the decision through PIP arbitration.  The arbitration decision concluded that the PA was authorized to provide EMGs and the Law Division concurred.  Selective appealed to the Appellate Division, which reversed the decision below.  In the Supreme Court’s decision, the Court upheld the Appellate Division decision that the statute governing EMGs provides that only physicians may perform EMGs.

The second aspect of the case considered by the Supreme Court was whether its opinion should be applied prospectively or retrospectively.  This issue is important because any payor who previously paid for EMGs provided by a PA could seek to recover those payments if the opinion is applied retrospectively, and the Board of Medical Examiners could take disciplinary action for allowing the unauthorized practice of medicine by the PA.  The Appellate Division had refused to address the issue, and the Supreme Court declined as well because it did not have sufficient evidence before it to interfere with the Appellate Division’s refusal to consider it.  The doctor claimed that Selective had filed other actions against him seeking to recover other payments made for EMGs provided by the PA, and the Court concluded that those cases could provide the forum for deciding whether the decision should be applied retroactively or prospectively.

The other bill we previously reported on, the bill that would phase out the cosmetic surgery tax, was signed by Governor Christie, and thus will go into effect.

In related news, in yesterday’s New Jersey Register, the Department of Health and Senior Services published final rules governing the registration of surgical practices.  The final rules are substantially unchanged from the earlier proposal, however the Department indicated in its responses to comments that it will issue further regulatory changes in the future in order to clarify a couple of issues raised by the rules as adopted.  In the same issue of the Register, the Department published final rules governing the obligation of ambulatory surgery centers to report healthcare associated infections under the same rules that apply to hospitals in the State.  These latter rules do not apply to surgical practices.

Today, the OIG’s office announced a new “most wanted” list – this one is for “deadbeat parents,” those parents who do not pay court ordered child support payments and fall under federal jurisdiction.  While most child support payment issues are handled by the States, the federal government can get involved if the child lives in a different state from the parent who owes the child support, and the parent has been in arrears for over one year or owes more than $5,000.  The federal government can also get involved if the parent flees the state or country in order to avoid child support payments.   The number one fugitive on this list owes more than a million dollars in child support payments.