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What steps should I take after I get a Medicare overpayment notification?

The Department of Health and Human Services (HHS) recently announced that it is digging into risk adjustment tactics it claims may have led to overpayments. The review will focus specifically on certain Medicare Advantage (MA) plans. Secretary Xavier Becerra noted the agency believes some groups are going beyond necessary charges and up-coding to get higher payments.

He even went as far to state that patients receiving similar care paid less when using a fee-for-service process than an MA plan.

How is this possible?

Two specific critiques include the use of chart reviews and health risk assessments. The agency claims groups are using these tactics to add unnecessary diagnoses and increase the claim rate. These tactics are allegedly responsible for MA plans costing almost $7 billion more than traditional Medicare coverage.

Advocates of MA plans point out that the higher cost is not the result of overcharging, but instead the result of plans that actually allow patients increased access to benefits.

The issue leaves providers in the government’s crosshairs. Are they overcharging, upcoding and using tactics to try to pull one over on the government or providing quality care to their patients?

Regardless of the answer, if Medicare believes there is an overpayment, the provider will likely get a demand letter. This letter is the government’s way of making sure the group that allegedly overbilled Medicare pays back what is owed.

What should our group do if we get a demand letter from the government?

The first step is to review the demand letter and look for the reason the government believes there was an overpayment. Also check for any deadlines.

After reviewing the letter, it is a good idea to reach out to legal counsel experienced in these matters. Those who receive this demand have options. These include either making the payment, moving forward with a rebuttal, or appealing the overpayment decision. Each step requires a specific process and a failure to follow this process can reduce or even eliminate certain options.

Attorney John Rivas is responsible for this communication