True Confessions

Suppose you receive money from the government that was wrongly paid. You are willing to repay it. So that’s all there is to it, right? Not quite. The third rung of the ROPE ladder addresses fixing problems, which certainly may involve refunding incorrect reimbursement. However, when the government or a third-party payer becomes involved in these issues, it is important to understand your rights and tactical options.

Home care companies have a variety of legitimate reasons to disclose information about improper payments to the government. First, of course, when you discover unequivocal evidence that an incorrect bill has resulted in an overpayment, no law permits you legally to retain the overpayment. Companies often try to argue that such overpayments are offset by undercharges so there is no net gain. This may be, but any such adjustment should be made only after consultation with the government or other payer.

When a company discovers clear evidence of an incorrectly submitted claim that has not yet been paid, the course of conduct is less clear. Under a strict interpretation of federal rules, a claim known to be incorrect will become “false” if it is not reclaimed by the provider within 60 days of submission. However, home care companies often have a relationship with their DMERCs such that it is easier and less confrontational to repay inappropriately received monies than to flag incorrect claims for reclamation. While it is more “correct” to reclaim the incorrect submissions than to wait to repay inappropriately remitted sums, both approaches make sense.

A second reason some companies may want to disclose alleged overpayments, even when the alleged wrongdoing is unclear, is because such disclosure is “the right thing to do.”

In addition to the ethical component of this decision, a company’s decision to disclose payment that is not unequivocally proper sends a clear message to its employees, agents and other personnel: “We are committed to total adherence to the rules.” The company’s demonstrated willingness to put its money where it words are on the topic of compliance could be particularly important if employees feel that they are being held to a standard not shared by senior executives.

A third reason for disclosure is to forestall whistleblowing activities. And a fourth reason may be to control the timing and nature of the communication. This option is especially attractive when a company can articulate the circumstances of the problem to present the facts in their best light. Of course, all material information must be disclosed fully. But when the company is able to control disclosure, it can gain substantial credibility with the government during the subsequent negotiations of an appropriate settlement.

Fifth, a company that controls the timing and tone of the disclosure will often have a better opportunity to shape and control how the problem is presented to media and the public. This could be a substantial benefit in minimizing harm to the company’s reputation from the adverse publicity.

Sixth, voluntary disclosure may earn “Brownie points.” True voluntary disclosure will usually entitle a company to reduce fines and penalties, and may avoid exclusion and/or criminal conviction where such extreme consequences would be likely but for the disclosure.

Finally, beware of the flip side of this argument. If you wish to consider holding back a disclosure, you must be virtually certain that you can make a credible and persuasive argument that you are entitled to keep the money.

While the risk of actual disclosure may be a valid factor in evaluating what to do, it must never be the only factor. If the government finds that a home care company knows of an overpayment and intentionally ignores it, it will likely be treated much more severely than will a company that did not realize the payments it received were improper.

Ignorance may not quite be bliss in this circumstance, inasmuch as the ignorant home care company still has to repay the money with interest and perhaps penalties. But it sure beats acquiring the wisdom that comes from a jail term.

Neil Caesar is president of the Health Law Center (Neil B. Caesar Law Associates, PA), a national health law practice in Greenville, S.C. He also is a principal with Caesar Cohen Ltd., which offers compliance training, outsourcing and consulting and the author of the Home Care Compliance Answer Book. He can be reached by e-mail at [email protected] or by telephone at 864/676-9075.

The ROPE Ladder

Rung 1: Articulate the way you want things to run, and note how they run now. Then, tweak your systems as necessary to comply with “The Rules.”

Rung 2: Teach your operating systems to your employees.

Rung 3: Implement a clear and simple method for dealing with problems — identify them, report them, investigate them and fix them.

Rung 4: Give your compliance staff resources to help them keep up-to-date with internal and external changes that may sometimes require you to refine your operating systems.

Rung 5: Monitor your operating systems to make sure they continue to run as you intended.