In a previous blog post, we highlighted the significant delays a practitioner must endure before the resolution of their appeal of a Medicare demand for overpayment. An apparent function of a huge backlog of such appeals, health care practitioners are routinely forced to wait many years before finally having their appeals heard by an Administrative Law Judge.

By that time, Medicare, via the Centers for Medicare and Medicaid Services (“CMS”), is likely to have started tacking on interest to the amount of the alleged overpayment in addition to effectuating a process called “recoupment” – the practice of offsetting the alleged overpayment from reimbursement remittances for services rendered during the pendency of the appeals process.

Medicare Overpayment Collection

To compound matters, Medicare will often refer the alleged overpayment for collection to the United States Department of Treasury (“US-DOT”) where, in turn, matters are often handled by unscrupulous collection agencies.

In December 2016, the United States District for the District of Columbia, in the matter, American Hospital Association v. Burwell, ordered that HHS clear the backlog of appeals by the year 2020. The Court issued specific deadlines wherein HHS was required to reduce the backlog by:

• 30% by the end of 2017;

• 60% by the end of 2018;

• 90% by the end of 2019; and

• 100% by the end of 2020.

Despite these mandates, little has changed, and practitioners continue to experience exorbitant delays during which practices are often left devastated by recoupment and the CMS collection efforts.

Medicare Enrollment Revocation

As if these delays were not bad enough, in the fall of 2019, the CMS announced new authority to revoke a practitioner’s Medicare enrollment simply on the basis of referral of an alleged overpayment to US-DOT. The revised regulations allow the CMS to revoke Medicare enrollment even if the underlying alleged overpayment is currently being appealed. This is especially troubling considering the appeal delays referenced above which are well in excess of what is allowable under the law.

Some practitioners who are appealing alleged overpayments are taking the CMS’s collection efforts to court, both litigating the scope of its authority and requesting injunctive relief to stop those efforts so that they can continue to treat Medicare patients during the pendency of the overpayment appeals process. Most concerning is the serious disruption to the continuity of patient treatment in instances where the CMS asserts this expanded authority.

To date, the CMS has not adhered to the Burwell requirement to reduce the backlog of appeals nor is it handling overpayment appeals in a reasonable and timely manner. As a result, practitioners should seriously consider litigation, including that which seeks injunctive relief, where appropriate. In any event, practitioners should always consult with healthcare counsel if they receive an alleged overpayment from the CMS or any action seeing to revoke Medicare enrollment.