HRSA Recoupment of COVID-19 Provider Relief Payments ARE YOU GOING TO HAVE TO GIVE BACK MONEY?

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Hello everyone. This is Michael Miscoe with Miscoe Health Law. With this week’s installment of ChiroSecure’s growth without a risk lecture series. And this week, we’re going to talk about the HRS recoupment of COVID 19 provider relief payments. The these payments were authorized under I believe the cares of act, but they were part of the COVID 19 relief bill.

And essentially what happened is, as I’m sure it happened to many of you when COVID kicked in practices are shut down elective services, aren’t allowed to be performed. It put Outpatient providers in a real pickle because they had no patients coming and no income. So what happened is that Medicare essentially just started pushing out these phones.

Prior to letting anybody know what strings were attached to them. There are as many as 10,000 physicians that received these funds during the pandemic that are now being asked to refund those monies because of noncompliance with the air quotes strings and. They’re on the hook for as much as a hundred million dollars.

Now I don’t imagine some of the bigger ones, they’re hitting physicians for $250,000. Recoupments I don’t imagine that’s going to be an issue for anybody on the call or listening to this program because the scope of your Medicare billings, aren’t likely that large, however, The way that they calculated it is that in phase one there was a $30 billion distribution and the way they figured it out is they took your meds.

The total payments that you received in 2019, from Medicare divided by 453 billion, which is the total amount they spent to figure out what your prorate is share of. The total spending was in 2019, and then they multiplied that factor by 30 billion, which was the amount of. Package and that led to payments being issued to providers.

And these were payments that just showed up in their accounts. Physicians didn’t have to ask for them. They they just simply called me one day and said, Hey, this money showed up. What’s it for, what do I do with it? Do I have to give it back? What’s going on now, there were term terms and conditions.

That you are deemed to have accepted. If you didn’t contact HHS with objections within 90 days of receipt of those funds, the only problem is that the information about these payments on the CMS website, providing the links to what the terms and conditions were didn’t go up immediately. The funds definitely preceded the rules because they were in a hurry.

Funds out the physician so that they could stabilize and keep their practices open. Now, there were a number of key obligations in those terms and conditions, and I’m not going to review them all. They’re available on CMS website and there’s a document that’s available to you for download that, that will explain all of it to you.

But w one of the key certifications is that. The providers that receive this money, have to use the funds to prevent, prepare for, and respond to coronavirus. And they’re only to reimburse the recipient for healthcare related expenses. Or lost revenues that are attributable to coronavirus. So this created an an accounting problem for small practices because, to the extent that they purchased PPE, the expense associated with wiping down tables and doorknobs and all the things that you did where you were permitted to keep your practice open and then lost revenue and understand it’s not lost revenue overall.

It’s lost Medicare revenue. So if you didn’t have a lot of Medicare revenue to begin with then it’s hard to claim much of a loss in that respect, but usually to the extent that you had expenses, if you were tracking them then, and could show that you use that money to pay for those expenses.

That was one of the key requirements. You will not, it, you also certified that you would not use the payment to reimburse expenses or losses that have been reimbursed from other sources. So if you got, some of the either the SBA money or you got payroll protection, and things like that, you had to offset how you use those monies in relation to.

Any additional losses that, that you sustained because of COVID and then you’re required to submit reports to the secretary. That for each is we’re going to see in a minute, there are a number of reporting periods in with each period, you had to submit reports, establishing how you spent the money and therefore your entitlement to keep it.

And it was the failure to submit those reports. That is why providers are being asked to refund this money. So looking at the reporting requirement, if you received more than $10,000 in a particular reporting period, then you were required to report for the how detailing, how the money was spent in that period.

So they, Medicare gave us a table, which should show up on the screen here shortly. There it is. And you can see. The first reporting period for payments that you received between April 10th, 2020 to June 30th, 2020 then you had those funds available and then the reporting period and. September 30th, 2021, a little asterisk indicates that they did extend it to the end of November, but nonetheless, it’s over.

So if you got money during period one, and it was more than 10,000 and you did not submit a report, you’re likely going to get a request to refund them. The second period is July 1st, 2020 to December 31st, 2020. And you could use the funds anywhere from January, 2020 to December 31st, 2021.

The reporting period just ended at the end of last month. So if you got money in the second period and you didn’t report, and it was over $10,000, expect that The government is going to ask for that money back. And as you can see there’s up to five reporting periods. Although I think they’re out of money, so I’m not sure if there’s going to be any further distributions.

I just read this morning that there was a a joint agreement between the house and the Senate to a much smaller COVID package that would extend coverage for things like testing and whatnot. But. Absolutely certain because I haven’t read the bill as to whether there’s any additional provider relief payments involved there.

So we know that the the phase one and the phase two reporting deadlines have passed. And from that perspective if you’ve gotten that money, you didn’t report then I would anticipate that if you have not received, you will soon receive a request for. Refund of those monies. So what did, what do you do if you missed your reporting deadline?

So if you got those payments verify first that you complied with the rules relative to how you’ve spent the money. So start gathering all your receipts for, what you purchased in terms of PPE. Staff time for, cleaning rooms and tables. And if you had contractors in, to fumigate or do whatever in order to keep your practice open during the permissible spend period, then that information will demonstrate that you spent the money correctly consistent with the terms of the act.

And the only issue here is a technical one in terms of the failure to report. And if you did not report You have two options, you can either voluntarily refund the money. And I would suggest that option, especially if you didn’t spend it the right way, or can’t demonstrate that you spend it the right way.

You should voluntary reef voluntarily refund the money. Even if you got less than $10,000. So let’s unpack this. If you got more than $10,000, you have a reporting obligation that if you didn’t meet, they’re going to want to recoup the money. But if you can demonstrate that you spent the money correctly, then I think there’s a possibility for appeal.

If you didn’t, let’s say you got less than $10,000. So the reporting requirement, isn’t going to kick in the teeth, but let’s say you can’t substantiate that you spent the money properly. Now let’s say you used it to pay staff or whatever you used it for. In that circumstance and you can’t demonstrate the lost earnings and whatever then to substantiate the payment, then in that circumstance, this is where the reverse false claims provision of the false claims act comes into play.

Where, because you’ve got money or you received money that you’re not entitled to. That you weren’t entitled to keep let’s put it that way because you didn’t spend it the right way. Then you have a, an obligation to voluntarily disclose and refund that money back to the federal government and failure to do if they identify it could subject you, excuse me,

to false claims, act liability for the failure. To refund those overpayments back to the federal government. And the way that works is normally when you think of fraud or false claims act liability, it’s based upon some overt action that you do, you misrepresent a service or you bill stuff that you didn’t do, things of that nature.

You bill up code services or use modifiers, inappropriate improperly In the reverse false claims act since. Claims or money that you receive becomes a false claim by virtue of the fact that or should know that you’re not entitled to keep the money and you don’t give it back to the government.

And the false claims act has some pretty stiff penalties. It subjects you to trouble damages. So let’s say you got $2,500. Now you have to refund $7,500. Plus there’s a punitive sanction of, I think it’s up to, it varies by the cost of living index, but I think it’s up to $22,500 per claim. So this would fortunately be a single claim, but nonetheless, over a $2,500 overpayment, you would be looking at possibly $35,000 and potentially being D credentialed for Medicare or being added to the exclusion list.

So the penalties are pretty significant. So if you got a magical deposit that you don’t know where it came from during those periods and in your w usually those were direct deposited to your account and you think, Hey, free money. Yay. You might want to go back and look and validate Whether the source of that money was Medicare.

It was one of these provider relief payments. And if it was look into how you spent it or how you can justify that you were entitled to keep it first and foremost, and then secondarily, whether you met the reporting requirements, if you get a recoupment that is subject to appeal, and it’s possible that if you appeal and demonstrate that.

Spent the money appropriately and you just merely sailed to report that you could get that recoupment overturned. So that’s all we have time for today. Next week, Dr. Sam Collins, we’ll be back with some coding related information and until next time have a great.