Q&A: Defining known overpayments

Q: For the purposes of determining a Medicare overpayment, should claims that we are uncertain whether they were appropriate be included? Is this defined under the False Claims Act (FCA)?

A: Given the complexity of Medicare rules and regulations, there may be good-faith uncertainty over the appropriateness of certain claims and, thus, whether there is a known overpayment. Providers need to analyze the issues surrounding alleged overpayments to determine whether the amount received can be clearly determined to have been paid in error. Knowledge under the FCA is defined as actual knowledge, reckless disregard, or intentional indifference to the law. Thus, not auditing billing systems and protocol, or not reviewing financial arrangements for Stark Law compliance, can generate “known” overpayments due to the reckless disregard or intentional indifference standards under the FCA.

For more information, see The Compliance Officer’s Handbook, Fourth Edition.