New challenges arise on both sides of overpayment recovery table

The federal government and payers face challenges in recouping inappropriate payments and often encounter pushback along the way.

The government, for instance, is trying to recover $267 million in Medicaid overpayments to Florida hospitals, but here's the rub: The government wants all of the money back this year, according to The Ledger.

This rapid refund may devastate the hospitals' profitability. So facilities and state officials requested a three-year payback period and a guarantee that the government's audit results are final, the article noted. Hospitals also have approached congressional representatives for help.

The overpayment accumulated over eight years and pales in comparison to the hospitals' $1 billion annual appropriation in low income pool (LIP) payments, The Ledger noted. And the payback period may be a "dustup" related to Florida's rejection of Medicaid expansion as the state simultaneously requests increased LIP funding, the article stated.

Payers may face similar opposition in overpayment pursuits. In an exclusive interview with FierceHealthPayer: Anti-Fraud, WellPoint's Alanna Lavelle stressed the importance of preparing for provider defenses at settlement meetings. A recent Healthcare Financial Management Magazine article describes some of those potential defenses.

The Employment Retirement Income Security Act (ERISA) may entitle providers to challenge overpayment calculations through the claims appeal process, HFM Magazine noted. Though insurers have argued an overpayment demand isn't an "adverse benefit determination" under ERISA, pending federal lawsuits contest payers' failure to provide notice of an overpayment and the opportunity to appeal it.

Further, appeals processes defined in payers' contracts with providers and participating provider manuals may offer "procedural protections" to overpayment challengers, according to the HFM Magazine article. And state laws may include deadlines by which insurers must notify providers of overpayments.

"Carriers are often unclear about their reasoning for alleging an overpayment was made," the HFM Magazine article stated, "and about their methods for recouping the overpayment as well as providers' opportunities to appeal the determination."

For more:
- here's The Ledger article
- read the HFM Magazine article