OIG estimates uninsured COVID-19 program paid nearly $784 million in ineligible claims | Denton

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Are you a healthcare provider who has received funding from the Health Resources and Services Administration (“HRSA”) Uninsured COVID-19 Program? If so, further inquiries and refund requests may be forthcoming.

The conclusions of the OIG

A recent Office of Inspector General (OIG) audit found that for 19% of the 300 patients sampled, improper payments were made by HRSA because the patient had health insurance coverage or received tests and treatment unrelated to COVID-19. The audit estimates that the Uninsured Program reimbursed $783.6 million in ineligible claims.

HRSA blames HHS policy decision and third-party data

The report provides fascinating insight into how claims ended up being paid for patients who actually had health insurance coverage. When providers submitted claims to the Uninsured Program, they were required to include a patient list listing patients who had received COVID-19 testing and treatment services and whom the provider had determined to be uninsured. This is where the problem arose.

According to the HRSA, Health and Human Services made a “political decision” not to require patients’ Social Security Numbers (SSNs) as part of the patient list, fearing this could deter patients from receiving treatment or result in unpaid claims for providers who gave treatment in the absence of an SSN.

This ultimately mattered because HRSA’s contractor used its health insurance verification process to verify third-party health insurance coverage only when an SSN was provided. If no SSN was collected or reported by the provider, the contractor relied solely on the provider’s certification that the health insurance coverage had been verified and the patient was uninsured. If no SSN was provided, there was also no post-payment attempt to verify potentially retroactive coverage, such as Medicaid or COBRA.

The vast majority of claims paid by the uninsured program were for patients for whom no SSN was provided, representing 82% of patients in 2020, 91% in 2021 and 94% in 2022.

The OIG audit also calls into question the accuracy of the process used to verify third-party coverage of patients for whom an SSN has been provided. According to the report, the verification process failed to identify insurance for 9 of the 300 patients sampled by the OIG. The OIG noted that HRSA’s contractor relied on a third-party vendor to provide the assurance data it used in its process. HRSA claims that it was unable to independently verify the accuracy of third party data because the third party provider was not a sub-contractor of HRSA.

Other eligibility issues

Misidentification as an uninsured patient was not the only reason for the large percentage of ineligible claims. The OIG found that 22 of the 300 sampled patients had paid claims for services not provided or unrelated to COVID-19, which could occur if COVID-19 was not the patient’s primary diagnosis. For example, requests submitted for COVID-19 testing prior to a patient’s scheduled surgery.

Likely HRSA post-payment reviews

What does this mean for suppliers? If you have submitted claims and received payments from the Uninsured Program, it is likely that you are receiving (or have already received) an HRSA claim. In March 2022, HRSA initiated a post-payment review process for the program. These efforts could be intensified in light of the findings of the OIG.

Although the OIG recommends that HRSA identify and recover all improper payments, it is unclear whether HRSA will pursue reimbursement if a provider can demonstrate that it had appropriate processes in place to identify insurance and that its certification of eligibility was made in good faith.

Additionally, identifying and recovering abusive payments, especially where coverage was retroactive and could not have been identified at the time of service, would unfairly penalize providers. If insurance had been identified no later than 90 days after payment, the provider could have submitted claims to the patient’s insurer. This opportunity has passed since payers have timely filing requirements generally no more than one year after the date of service.

What should suppliers do now?

Providers have reason to be optimistic that the HRSA will not require reimbursement if they can prove through their policies and patient intake forms that at the time of claims submission, the patient was, to their knowledge, uninsured.

According to the HRSA’s response to the OIG’s recommendation to seek reimbursement of claims paid for insured patients, it intends to review the provider’s compliance with the terms and conditions of the program, noting that it may not require reimbursement if the provider can establish that it acted appropriately in submitting the claims.

Providers who have received payment from the Uninsured Program should be prepared to respond to HRSA requests for documentation of the processes used to verify patient insurance, including how they determined that a patient was uninsured and eligible for the program.

Suppliers who receive a post-payment review should work with legal counsel to respond, making sure to include detailed explanations of the policies and procedures implemented by the supplier to ensure claims submitted to the program were appropriate. If a provider identifies claims paid by the program that were unrelated to COVID-19, they should also work with an attorney to notify HRSA and reimburse the program.

Read the full OIG report at https://oig.hhs.gov/oas/reports/region2/22101013.pdf

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