Refund only after careful thought.
The risk of rushing to refund: not only is it alliterative, it is real. The proper desire to be compliant can prompt a hasty decision to return money to the government. While it is both wise and necessary to return overpayments to Medicare and Medicaid, taking a thoughtful approach to refunds is important.
Here are some slightly altered facts of a client’s recent dilemma. The applicable state Medicaid program has a provision indicating that there should be a physician order in the record for a variety of services, including hospital inpatient admissions, although anyone can write it at the physician’s direction. Many patients were cared for by non-physician professionals such as nurse practitioners, physician assistants, and midwives. The state allows these professionals to operate independently. For a number of patients, a medical professional other than the physician wrote the order without explicit mention of the doctor. There is absolutely no doubt that the admissions were medically appropriate. For example, some involved women in active labor, while others had extensive surgery. The issue is widespread, with millions of dollars of reimbursement at stake. The physicians who oversee care by the non-physician professionals readily agree that the admissions were appropriate.
Is a refund required because a non-physician professional authored the order?
Medicare has situations in which the term “physician” is defined to include non-physician professionals who are acting independently. For example, 42 CFR 410.32 says that physician assistants and nurse practitioners “may be treated the same as physicians” for the purposes of ordering diagnostic tests, even though the regulation makes use of the term “physician,” so the first argument available to the hospital is that this same logic applies here for Medicaid. This state allows non-physicians to practice independently, and when they are doing so they are functionally physicians. But this article is not intended to focus on the specific legal defenses available in this narrow situation. Instead, I want to emphasize a practical point: when there is a ministerial mistake that could be viewed as an overpayment, but everyone agrees that the care involved is valuable and medically necessary and a benefit to the patient, there are two options you should seriously consider in lieu of refunding and giving up hope of seeing compensation for the work you performed.
First, Medicare allows you to refund and then appeal. In essence, you send the money back and immediately file an appeal. But I would rarely recommend that approach. If my client felt compelled to contact the government, I would recommend that they disclose the facts without submitting a refund. By notifying the government of the circumstances, they make it nearly impossible for anyone to assert that they have committed fraud. It’s true that under the 60-day rule, simply notifying the government doesn’t fulfill your legal duty, if you have an overpayment. But here we do not believe that we have an overpayment, so the 60- day rule isn’t triggered. Moreover, from a practical standpoint, it’s very difficult for anyone to criticize transparent behavior.
When the government concludes that an organization has not violated a particular rule, but it still has been unjustly enriched by a particular situation, the government will bring what lawyers call an “equitable claim.” In essence, the government is saying “it isn’t fair for you to keep the money.” That principle should apply both ways. When recipients of government programs get a benefit from you, you’re entitled to receive fair compensation for that work. Use counsel that will think creatively to help you keep the money to which you are entitled. Unfortunately, not all lawyers will do that. Refund only after careful thought.
While it is sometimes possible to claw back money that you have refunded, it is challenging. Far better to look before you leap, or reason before you refund.
Programming Note:
Listen to healthcare attorney David Glaser every Monday on Monitor Monday, 10-10:30 a.m. EST.
I do not usually report on what other media are reporting (with the exception of Nina Youngstrom’s reports on Medicare compliance!), but John Oliver’s story
In the Medicare fee-for-service world, “prepayment review” (also sometimes called “prepayment medical review” or “pre-claim review,” depending on the context) means that a claim is
Please log in to your account to comment on this article.
Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.
Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.
Sepsis remains one of the most frequently denied and contested diagnoses, creating costly revenue loss and compliance risks. In this webcast, Angela Comfort, DBA, MBA, RHIA, CDIP, CCS, CCS-P, provides practical, real-world strategies to align documentation with coding guidelines, reconcile Sepsis-2 and Sepsis-3 definitions, and apply compliant queries. You’ll learn how to identify and address documentation gaps, strengthen provider engagement, and defend diagnoses against payer scrutiny—equipping you to protect reimbursement, improve SOI/ROM capture, and reduce audit vulnerability in this high-risk area.
Only ICD10monitor delivers what you need: updates on must-know changes associated with the FY26 IPPS, including new ICD-10-CM/PCS codes, CCs/MCCs, and MS-DRGs, plus insights, analysis and answers to your questions from two of the country’s most respected subject matter experts.
Federal auditors are zeroing in on Inpatient Rehabilitation Facility (IRF) and hospital rehab unit services, with OIG and CERT audits leading to millions in penalties—often due to documentation and administrative errors, not quality of care. Join compliance expert Michael Calahan, PA, MBA, to learn the five clinical “pillars” of IRF-PPS admissions, key documentation requirements, and real-life case lessons to help protect your revenue.
During this essential RACmonitor webcast Michael Calahan, PA, MBA Certified Compliance Officer, will clarify the rules, dispel common misconceptions, and equip you with practical strategies to code, document, and bill high-risk split/shared, incident-to & critical care E/M services with confidence. Don’t let audit risks or revenue losses catch your organization off guard — learn exactly what federal auditors are looking for and how to ensure your documentation and reporting stand up to scrutiny.
Learn how to navigate the proposed elimination of the Inpatient-Only list. Gain strategies to assess admission status, avoid denials, protect compliance, and address impacts across Medicare and non-Medicare payors. Essential insights for hospitals.
RACmonitor is proud to welcome back Dr. Ronald Hirsch, one of his most requested webcasts. In this highly anticipated session, Dr. Hirsch will break down the complex Two Midnight Rule Medicare regulations, translating them into clear, actionable guidance. He’ll walk you through the basics of the rule, offer expert interpretation, and apply the rule to real-world clinical scenarios—so you leave with greater clarity, confidence, and the tools to ensure compliance.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
