State Court Reverses Medicaid Overpayment Demands
Providers are not liable for Medicaid overpayments based on imperfect or missing documentation alone according to the Supreme Court of Wisconsin in Papa and Professional Homecare Providers, Inc. v. the Wisconsin Department of Health Services, 2020 WI 66, --- Wis. 2d ---, --- N.W.2d --- (Papa). In the Papa case, Medicaid providers argued that the Wisconsin Medicaid Agency had repeatedly attempted to enforce a policy that medical records must be perfect in order for providers to retain payment for services furnished to Wisconsin Medicaid Beneficiaries. When auditors found imperfections in providers’ records, Wisconsin Medicaid would recoup payments previously made for Medicaid services.
The Papa court rightly noted that Wisconsin Medicaid is required to abide by rules and regulations imposed by the federal government in return for federal funding for health care services.
“The State of Wisconsin has joined the federal Medicaid system, and has consequently committed itself to following the federal law governing that system.”
-Id., at ¶ 4 (internal quotations omitted)
While Wisconsin Medicaid is required to audit Medicaid providers, and to recoup overpayments; the rules relied upon to recoup payments made to Medicaid providers did not support a requirement for perfect recordkeeping.
“The difference between imperfect records and no records at all is a significant one.”
-Id., at ¶ 38
Examples of imperfect records that did not create an overpayment or otherwise support recoupment from providers in Wisconsin included:
Failure to counter-sign orders,
Failure to bill other payors prior to billing Medicaid for Medicaid covered services, and
Missing elements of a record when covered services were otherwise demonstrably furnished.
Medical records need not be perfect for providers to be paid and retain reimbursement for services furnished to Wisconsin Medicaid beneficiaries. Recoupment of Medicaid payments should occur only if the Medicaid program cannot verify from the provider’s records that a service was actually provided or the amount claimed (or paid) was inaccurate or inappropriate. Though the Papa case only directly applies to Wisconsin Medicaid, providers across the country facing an overpayment demand or recoupment should carefully review the claims at issue to determine if an appeal could be successful.