Section 405 IAC 1-1.4-9 - Provider audits; overpayments; recoveryAuthority: IC 12-15-1-10; IC 12-15-21-2; IC 12-15-21-3
Affected: IC 4-6-10; IC 4-21.5-3; IC 12-15-1; IC 12-15-6-5; IC 12-15-13-3.5; IC 12-15-13-4; IC 12-15-21-3; IC 12-15-23-2
Sec. 9.
(a) Under IC 12-15-21-3(5) and IC 12-15-21-3(7), the office may recover payment from any provider for services rendered to an individual, or claimed to be rendered to an individual, if the office, after investigation or audit, finds that: (1) the services paid for cannot be documented by the provider as required by section 2 of this rule;(2) the amount paid for such services has been paid from other sources or is subject to third party liability;(3) the services were provided to a person other than the person in whose name the claim was made and paid;(4) the service reimbursed was provided to a person who was not eligible for Medicaid at the time of the provision of the service;(5) the paid claim arises out of any act or practice prohibited by law or by rules of the office;(6) the overpayment resulted from: (A) an inaccurate description of services or an inaccurate usage of procedure codes;(B) the provider's itemization of services rather than submission of one (1) billing for a related group of services provided to a recipient (global billing) as set out in the office's medical policy;(C) duplicate billing; or(D) claims for services or materials determined to have been not medically reasonable or necessary; or(7) the overpayment to the provider resulted from any other reason not specified in this subsection.(b) The office shall determine the look-back period for audits as follows: (1) For audits initiated on or before June 30, 2019, the audit look-back period shall be seven (7) years.(2) For audits initiated on or after July 1, 2019, the audit look-back period shall be three (3) years and one hundred eighty (180) days.(3) The audit look-back period accounts for and includes the timely filing period described in 405 IAC 1-1-3 for determining the available audit dates.(4) The look-back date begins on the date of audit initiation or when the office discovers a credible allegation of fraud or abusive billing practices, whichever is earliest.(c) The office shall limit its audit to claims submitted and paid by the office during the appropriate look-back period. Once the office begins its audit, all claims within the audit look-back period remain viable for audit and recoupment throughout the audit and appeal process.(d) If the office discovers information that may indicate a credible allegation of fraud or abusive billing practices, or a claims processing error rate greater than thirty percent (30%), it may increase the audit look-back period from three (3) years and one hundred eighty (180) days to seven (7) years.(e) Underpayments discovered by the office in the course of an audit shall be accounted for as follows: (1) The sum of such underpayments shall reduce the sum of overpayments identified in the audit.(2) The provider, at its own expense, may elect to examine the claims under audit for underpayments. If the provider identifies underpayments, then the sum of those underpayments, if verified by the office, shall reduce the sum of overpayments identified.(3) Underpayments shall only reduce overpayment findings.(f) Under IC 12-15-21-3(5), the office may determine the amount of overpayment made by a provider by means of a random sample and extrapolation audit. The office shall conduct the random sample and extrapolation audit in accordance with generally accepted statistical methods, and shall base the selection criteria on a random sampling methodology generally accepted by the statistical profession.(g) In the event that the provider wishes to appeal the accuracy of the random sampling methodology, the provider may either: (1) present evidence to show that the sample used by the office was invalid and therefore cannot be used to project the overpayments identified in the sample to total billings for the audit period; or(2) conduct an audit, at the provider's expense, of either a valid random sample audit, using the same random sampling methodology as used by the office, or an audit of one hundred percent (100%) of medical records of payments received during the audit period. Any such audit shall:(A) be completed within one hundred eighty (180) calendar days of the date of appeal; and(B) demonstrate that the provider's records for the unaudited services provided during the audit period were in compliance with state and federal law. The provider must submit supporting documentation, subject to review and approval by the office, to demonstrate this compliance.(h) If the office determines that an overpayment has occurred, the office shall notify the provider by certified mail. A provider who receives a notice may elect to do one (1) of the following:(1) Repay the amount of the overpayment pursuant to IC 12-15-13-3.5(e) for a noninstitutional provider or IC 12-15-13-4(e) for an institutional provider.(2) Request a hearing and repay the amount of the alleged overpayment pursuant to IC 12-15-13-3.5(e) for a noninstitutional provider or IC 12-15-13-4(e) for an institutional provider.(i) The office shall initiate recoupment proceedings to collect any overpayment that is not repaid within three hundred (300) calendar days after the provider's receipt of the final calculation notice under section 11(d) or 12(e) of this rule as applicable. The office may recoup an overpayment until it is satisfied through any of the following methods: (1) Offset the amount of the overpayment against current Medicaid payments to a provider.(2) In the case of an institutional provider, offset the amount of the overpayment to any or all of the Medicaid facilities owned by the provider.(j) The office shall assess an interest charge in addition to the amount of overpayment identified in the notice of overpayment provided in subsection (d). Such interest charge shall not exceed the percentage set out in IC 12-15-13-3.5(g) for a noninstitutional provider or IC 12-15-13-4(h) for an institutional provider. Such interest charge shall be applied to the total amount of the overpayment, less any subsequent repayments. Under IC 12-15-21-3(6), the interest shall: (1) accrue: (A) from the date of the overpayment to the provider; or(B) for extrapolated overpayments, from the last paid date of the audit period;(2) apply to the net outstanding overpayment during the periods in which such overpayment exists; and(3) be assessed even if the provider repays the overpayment to the office within thirty (30) days after receipt of the notice of the overpayment.(k) If the office recovers an overpayment to a provider that is subsequently found not to have been owing to the office, either in whole or in part, then the office shall pay to the provider interest on the amount erroneously recovered from the provider. Such interest shall accrue:(1) from the date that the office recovered the overpayment until the date the overpayment is restored to the provider; and(2) at the rate of interest that shall not exceed the rate set out in IC 12-15-13-3.5(g) for a noninstitutional provider or IC 12-15-13-4(h) for an institutional provider. For hospitals that receive a notice that the provider has been underpaid by the office as a result of the cost settlement process, the office shall pay interest to the hospital on the amount of the underpayment beginning on the date of the underpayment at the rate outlined in subsection (e)(2).
(l) Nothing in this section shall be construed to preclude the office from revising a provider's rate of reimbursement under 405 IAC 1-12 or 405 IAC 1-14.6 as a result of an audit.Office of the Secretary of Family and Social Services; 405 IAC 1-1.4-9; filed 12/21/2018, 3:17 p.m.: 20190116-IR-405180251FRAReadopted filed 5/30/2023, 11:54 a.m.: 20230628-IR-405230292RFA