Section 405IAC1-1-5. Overpayments made to providers; recovery

   (a) Under IC 12-15-21-3(5) and IC 12-15-21-3(7), the office of Medicaid policy and planning (office) may recover payment, or instruct the fiscal contractor to recover payment, from any Medicaid 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 405 IAC 1-5-1;

(2) the amount paid for such services has been or can be paid from other sources;

(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 medical assistance 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) 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) overpayment to the provider resulted from any other reason not specified in this subsection.

  (b) Under IC 12-15-21-3(5), the office may determine the amount of overcharges made by a Medicaid provider by means of a random sample audit. The random sample audit shall be conducted in accordance with generally accepted statistical methods, and the selection criteria shall be based on a table of random numbers derived from any book of random sampling generally accepted by the statistical profession.

  (c) The office or its designee may conduct random sample audits for the purpose of determining overcharges to the Indiana Medicaid program. The following criteria apply to random sample audits:

(1) In the event that the provider wishes to appeal the accuracy of the random sample methodology under IC 4-21.5-3, the provider may 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.

(2) The provider may also 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 must:

(A) be completed within one hundred eighty (180) 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 to demonstrate this compliance.

  (d) If the office determines that an overcharge has occurred, the office shall notify the provider by certified mail. The notice shall include a demand that the provider reimburse the office, within sixty (60) days of the provider's receipt of the notification, for any overcharges determined by the office. A provider who receives a notice and request for repayment may elect to do one (1) of the following:

(1) Repay the amount of the overpayment not later than sixty (60) days after receiving notice from the office, including interest from the date of overpayment.

(2) Request a hearing and repay the amount of the alleged overpayment not later than sixty (60) days after receiving notice from the office.

(3) Request a hearing not later than sixty (60) days after receiving notice from the office and not repay the alleged overpayment, except as provided in subsection (e).

  (e) If:

(1) a provider elects to proceed under subsection (d)(3); and

(2) the office of the secretary determines after the hearing and any subsequent appeal that the provider owes the money;

the provider shall pay the amount of the overpayment, including interest from the date of the overpayment.

  (f) Under IC 12-15-23-2, the office may enter into an agreement with the provider regarding the repayment of any overpayment made to the provider. Such agreement shall state that the amount of overpayment shall be deducted from subsequent payments to the provider. Such subsequent payment deduction shall not exceed a period of six (6) months from the date of the agreement. The repayment agreement shall include provisions for the collection of interest on the amount of the overpayment. Such interest shall not exceed the percentage as set out in IC 12-15-13-3(e)(1) [IC 12-15-13-3 was repealed by P.L.229-2011, SECTION 270, effective July 1, 2011.].

  (g) Whenever the office determines, after an investigation or audit, that an overpayment to a provider should be recovered, the office shall assess an interest charge in addition to the amount of overpayment demanded. Such interest charge shall not exceed the percentage set out in IC 12-15-13-3(e)(1) [IC 12-15-13-3 was repealed by P.L.229-2011, SECTION 270, effective July 1, 2011.]. 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 from the date of the overpayment to the provider; and

(2) apply to the net outstanding overpayment during the periods in which such overpayment exists.

When an overpayment is determined pursuant to the results of a random sample audit, the date the overpayment occurred shall be considered to be the last day of the audit period and interest will be calculated from the last day of the audit period.

  (h) 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 will pay to the provider interest on the amount erroneously recovered from the provider. Such interest will accrue:

(1) from the date that the overpayment was recovered by the office until the date the overpayment is restored to the provider; and

(2) at the rate of interest set out in IC 12-15-13-3(e)(2) [IC 12-15-13-3 was repealed by P.L.229-2011, SECTION 270, effective July 1, 2011.].

Also, 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 will pay interest to the hospital on the amount of the underpayment, consistent with 405 IAC 1-1.5-5(c). The office will not pay interest to a provider under any other circumstances except under the condition described in this subsection.

  (i) If, after receiving a notice and request for repayment, the provider fails to elect one (1) of the options listed in subsection (d) within sixty (60) days, and the administrator determines that reasonable grounds exist to suspect that the provider has acted in a fraudulent manner, then the administrator shall immediately certify the facts of the case to the Indiana Medicaid fraud control unit established under IC 4-6-10.

  (j) If, at any time after the discovery of the overpayment, the administrator determines that reasonable grounds exist to suspect that the provider has acted in a fraudulent manner, the administrator shall immediately certify the facts of the case to the Indiana Medicaid fraud control unit established under IC 4-6-10.

  (k) Nothing in this section shall be construed to preclude the office from revising a provider's rate of reimbursement under 405 IAC 1-12, 405 IAC 1-14.5, or 405 IAC 1-14.6 as a result of an audit. (Office of the Secretary of Family and Social Services; 405 IAC 1-1-5; filed Sep 23, 1982, 10:05 a.m.: 5 IR 2347; filed Mar 14, 1986, 4:35 p.m.: 9 IR 1859; filed May 22, 1987, 12:45 p.m.: 10 IR 2281, eff Jul 1, 1987; filed Jul 29, 1992, 10:00 a.m.: 15 IR 2567; filed Apr 4, 1995, 10:45 a.m.: 18 IR 2024; errata filed May 17, 1995, 8:10 a.m.: 18 IR 2415; filed Jul 18, 1996, 3:00 p.m.: 19 IR 3371; errata filed Sep 24, 1996, 3:20 p.m.: 20 IR 331; readopted filed Jun 27, 2001, 9:40 a.m.: 24 IR 3822; filed Feb 14, 2005, 10:25 a.m.: 28 IR 2129; readopted filed Sep 19, 2007, 12:16 p.m.: 20071010-IR-405070311RFA; readopted filed Oct 28, 2013, 3:18 p.m.: 20131127-IR-405130241RFA) NOTE: Transferred from the Division of Family and Children (470 IAC 5-1-3.6) to the Office of the Secretary of Family and Social Services (405 IAC 1-1-5) by P.L.9-1991, SECTION 131, effective January 1, 1992.