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Commercial and Governmental Payer Audits and Withholds

On Behalf of | Oct 3, 2012 | Healthcare Law

Recent Healthcare Law Developments:

Commercial and Governmental Payer Audits and Withholds

The withholding by commercial and governmental payers of proper reimbursement for the provision of healthcare services, based on allegations of improper billing or fraud, continues to be a major financial hurdle facing healthcare providers.  For instance, New York Insurance Law § 3224-b allows commercial health plans to provide no more than 30 days written notice to physicians before engaging in “overpayment recovery efforts,” which can be justified after they “suspect” fraud, intentional misconduct, or abusive billing. Effective August 22, 2012, the Office of Medicaid Inspector General (“OMIG”) amended its regulations (Sections 518.7 and 518.9 of Title 18) to implement sections of the Patient Protection and Affordable Care Act (“ACA”), to require the state to withhold payments to medical assistance (Medicaid) program providers after the agency determines or is notified that a “credible allegation” of fraud exists involving the provider and for which there is a pending investigation. In both instances, untested and unproven allegations of fraud are enough to justify the withholding of payment for services rendered, and the burden is effectively shifted to the physician or provider to rebut these allegations in order to put a freeze to the ongoing recoupment efforts – all while the underlying investigation remains underway.  Since fraud is certainly in the eye of the beholder in these types of circumstances, a certain amount of discretion exists to further complicate this financially disruptive situation.

Please contact Weiss & Zarett, P.C. if you have any questions regarding these recent developments, or require assistance in these developing areas of the law.