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Medicare reform law: Overpayment refunds due in 60 days

How physicians will be judged on overpayment recognition remains unclear

Q Is it true that I am obligated to recognize all overpayments made by Medicare to my practice and return the money within 60 days? And, is it true that I can be fined $50,000 and treble damages under the False Claims Act if I do not recognize the overpayment and pay the money back?

Ray Painter, MD
A The answer is a qualified "yes" to both questions. The Patient Protection and Affordable Care Act of 2010 specifically states that anyone receiving Medicare payments is obligated to identify and refund overpayments within 60 days of recognition. We're waiting to see the specifics of how they are going to judge us on recognizing overpayment. The regulations implementing this part of the law have not been written, although the mandate on repayment was backdated to Jan. 1, 2010.

The reform legislation also made noncompliance a False Claims Act violation. Again, the big question will be the final regulations and implementation. Implementation of the law falls under the jurisdiction of the Department of Health and Human Services and Medicare. Be sure to watch closely for more information.

Even though there are questions to be answered, we highly recommend that you put into place processes to identify and return overpayments now.

Q I am having trouble getting adequate reimbursement for Testopel. Are there any codes for this drug, and what is the proper code for implantation of the pellets?

Mark Painter
A Obtaining adequate payment for implantable testosterone pellets (Testopel) is problematic. Implantation of the pellets is properly coded as 11980, Subcutaneous hormone pellet implantation (implantation of estradiol and/or testosterone pellets beneath the skin). Typically, reimbursement for the procedure is not the issue.

Currently, the Healthcare Common Procedure Coding System (HCPCS) code assigned to Testopel is S0189, Testosterone pellet, 75 mg. Although the code is accurate, the problem surrounding reimbursement is based on the fact that many payers, including Medicare, do not routinely accept HCPCS codes that begin with "S." At this point in time, Medicare carriers are paying the S0189.

Check with the patient's insurance or Medicare prior to inserting the pellets to determine whether the payer will accept the S0189 and, if possible, what the payer will reimburse. Keep in mind that the description is for one pellet, so make certain that you account for all pellets implanted and report this number in the units box.

The issue of adequate reimbursement is one that applies to many services. Private payers may accept an appeal using invoice costs to provide at least cost for the drug. Medicare will establish reimbursement at the traditional average sales price plus 6%, and with least costly alternative repealed for all drugs, payment should be above acquisition cost. If not, talk to the pharmaceutical company about your current costs.

Q I do not participate with many payers; however, I send claims to the payer out of courtesy to my patients. One payer sent me a check and told me that there was a limit to what I could charge the patient. If I do not have a contract with that payer, how can they tell me what to charge and collect from the patient?

A They can't. We work in a world of "contract medicine." Every time you provide a service to a patient, somebody owes you for that service. That somebody is the individual or the company with whom you have a contract. If you had a contract with the insurance company of the patient for whom you're providing service, then you have agreed to abide by that insurance company's rules. If you do not have a contract with that insurance company, then your contract is with the patient and you do not have to abide by the payer's rules.

Some payers will pay you, even if you are a non-participating provider. That's fine, but your deal is with the patient. You can discount what you charge the patient, or you can charge the patient—whatever you so desire. In the case of Medicare, there is a contract involved, and you have to abide by their rules even if you are a non-participating physician. You would have to opt out of the Medicare program in order to avoid adhering to Medicare rules.

Disclaimer: The information in this column is designed to be authoritative, and every effort has been made to ensure its accuracy at the time it was written. However, readers are encouraged to check with their individual carrier or private payers for updates and to confirm that this information conforms to their specific rules.

Urologist Ray Painter, MD, is president of Physician Reimbursement Systems, Inc., in Denver and is also publisher of Urology Coding and Reimbursement Sourcebook. Mark Painter is CEO of PRS Urology SC in Denver.

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