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Wound care manufacturer case provides example of complexity of Medicare overpayment claims

Private practices often rely on Medicare. It provides coverage for many patients and payment on claims is relatively prompt. Unfortunately, issues with claims can lead to major headaches. In a recent example, a medical product manufacturer’s rebate practices could have landed physicians and private practices who use their products in hot water with the CMS.

The case involves Legacy Medical Consultants, a wound care manufacturer. The government claims the company would charge medical providers inflated prices for their products and provide a rebate. The issue: the rebate was often provided after the medical providers billed Medicare. This recent revelation could mean CMS will send out overpayment letters to providers who used these products.

Legacy is fighting the charges, noting that the customers are responsible for reporting the rebates to Medicare and thus they are not culpable for any potential fraudulent activity. Physician advocates counter that the manufacturer may have taken advantage of providers, essentially setting them up to fail.

How can I reduce the risk of allegations of an overpayment?

This case underscores the importance of medical providers making sure they have practices in place that are in full compliance with applicable regulations as a failure to report the rebates could leave them open to various allegations, such as overpayments and Medicare fraud.

What happens if my practice gets a letter claiming improper payment?

It is important to carefully review correspondence from Medicare or Medicaid. An overpayment letter should detail the reasons for the alleged overpayment and the amount involved. Review the following information within the letter carefully:

  • Verify the accuracy of the claim details and the alleged overpayment amount.
  • Note the deadline for repaying the overpaid funds, as there may be legal consequences for missing it.

Next steps may include preparing a written response if you believe the overpayment notice is incorrect, and/or gathering supporting documentation to challenge the overpayment claim.

Dealing with a Medicare or Medicaid overpayment notice is a serious matter that requires prompt attention. By understanding the notice, taking immediate action, and following the correct repayment or appeal procedures, you can address the issue effectively and minimize potential legal impacts. Always seek professional legal advice to ensure compliance with healthcare laws and regulations.

Attorney John Rivas is responsible for this communication.