Navigating Billing Mistakes and Self-Disclosure for Nursing Homes: Managing Credentialing Issues

Introduction
Nursing homes play a critical role in the care of federal beneficiaries, particularly through Medicare and Medicaid. Billing for services provided to these beneficiaries requires strict adherence to regulatory guidelines, including ensuring that staff credentials are up-to-date. Billing mistakes can occur when nursing homes inadvertently bill for services rendered by staff with expired or lapsed credentials. These errors can trigger self-disclosure requirements, potentially leading to significant financial and legal consequences. 

This article explores why credentials are essential for billing, the implications of lapses, and the self-disclosure process for nursing homes.

The Role of Credentials in Billing
Proper credentials ensure that nursing home staff—such as registered nurses, physical therapists, and certified nursing assistants—meet the qualifications required to provide care to residents. For services billed to Medicare or Medicaid, these credentials are essential to verify the legitimacy of the care provided. Unqualified staff may be seen as providing care that does not meet federal standards, making any associated billing non-compliant.

Why Credentials Matter for Billing Federal Beneficiaries
Credentials validate that a healthcare professional has met state licensure requirements, training, and continuing education standards. For federal reimbursement, especially from programs like Medicare and Medicaid, the qualifications of the care provider directly impact the claim's validity. Services provided by staff with lapsed credentials can be considered non-covered services, leading to denials, recoupments, or potential false claims allegations.

Common Billing Mistakes Due to Lapsed Credentials
Billing for services performed by staff with expired licenses or certifications can result in:

• Denials of Claims: Medicare and Medicaid may deny claims if it is discovered that the staff providing the care did not have valid credentials at the time of service.
• Overpayments: If a claim is paid but later determined to have been submitted by unqualified staff, nursing homes may need to repay the overpaid amount.
• False Claims Allegations: Submitting claims for payment while knowing that the staff member’s credentials had lapsed can be considered a violation under the False Claims Act (FCA).

CMS Compliance with Staff Credentials
Several CMS operating manuals emphasize the requirement for compliance with staff credentialing. The Medicare Claims Processing Manual and the State Operations Manual are particularly pertinent, as they outline conditions of participation, the role of properly credentialed staff, and the consequences of non-compliance. Nursing homes must ensure that their credentialing practices align with these requirements to avoid legal exposure and financial penalties.

Managing False Claims Due to Credentialing Issues
Nursing homes should implement a robust credentialing management process to mitigate the risks of false claims. This includes regular audits of staff credentials, prompt action to address expired licenses, and clear documentation of staff qualifications. If a billing mistake occurs due to lapsed credentials, the facility must determine whether to self-disclose the error to the Office of Inspector General (OIG) or simply repay the overpaid amount.

Determining Whether to Self-Disclose or Refund the Contractor
The decision between self-disclosure and returning the money depends on the severity and nature of the billing mistake. The complex nature of determining whether to return the money to self disclose may require involvement of experienced healthcare legal counsel and an internal investigation:

• Minor, Isolated Errors: If the billing mistake is an isolated incident, repayment to the contractor might suffice, but documentation is crucial.
• Systemic Issues or Knowledge of Non-Compliance: If the mistake suggests a broader pattern of non-compliance or if the facility knew about the credentialing lapse, self-disclosure to the OIG may be required to avoid allegations of fraud.

Why Simply Returning the Money Can Be Risky
Repaying overpayments without proper disclosure can be risky because it may not address the underlying compliance issue. This approach could leave nursing homes vulnerable to further audits or investigations by the Office of Inspector General (OIG) or the Department of Justice (DOJ). It may also result in additional liabilities under the FCA if the repayment is seen as an attempt to cover up a more significant compliance failure.

Pros and Cons of Self-Disclosure for Billing Mistakes
Self-disclosure can demonstrate a nursing home’s commitment to compliance and transparency, but it is not without its challenges:

• Pros:
  • Reduced Pealties: The OIG often reduces penalties for entities that voluntarily disclose billing errors.
  • Demonstration of Good Faith: It shows that the facility is proactive in correcting mistakes.
• Cons:
  • Financial Impact: Self-disclosure can still lead to significant financial penalties, even if they are reduced and can also lead to exclusion from federal payors.
  • Extended Oversight: Self-disclosure may invite further scrutiny from regulatory bodies, leading to ongoing monitoring of compliance practices.

Liabilities with Self-Disclosure to OIG vs. Department of Justice

• Self-Disclosure to the OIG: Typically addresses administrative penalties and focuses on resolving compliance issues without criminal prosecution.
• Involvement of the Department of Justice (DOJ): May occur if the disclosed issue involves intentional fraud or a broader pattern of non-compliance, potentially leading to more severe penalties, including criminal charges.

Steps Nursing Homes Should Take Before Self-Disclosure

1. Internal Audit and Investigation: Conduct a thorough audit to determine the scope of the credentialing lapse and the extent of billing mistakes.
2. Consult Legal Counsel: Engage with legal experts specializing in healthcare compliance to assess risks and prepare the disclosure.
3. Develop a Corrective Action Plan: Outline how the facility plans to address the issue, including measures to prevent future occurrences.
4. Prepare Documentation: Compile all relevant documentation of the error, the corrective actions taken, and evidence of internal policies.

Possible Outcomes of Self-Disclosure
The results of self-disclosure can vary but may include:

• Fees and Penalties: Reduced financial penalties compared to those imposed following an external audit.
• Investigations: Regulatory bodies may conduct further investigations to ensure compliance.
• Enhanced Oversight: OIG or other agencies may place the facility under a compliance program for a specified period.
• Exclusion Risks: In severe cases, self-disclosure can still result in the facility or certain individuals being excluded from participating in federal healthcare programs.
• License Repercussions: If significant compliance failures are discovered, state licensing bodies may take action, potentially resulting in suspension or revocation of licenses.

How Automation of Staff Credentials Can Avert These Issues
Automation tools for tracking staff credentials can significantly reduce the risk of billing mistakes. By using software that automatically tracks credential expiration dates, sends reminders for renewals, and integrates with billing systems, nursing homes can ensure that only properly credentialed staff are providing billable services. This proactive approach can prevent errors before they occur, ensuring compliance with federal requirements and safeguarding revenue. Additionally, implementing robust credential management software, such as Perla, demonstrates a facility’s commitment to compliance, which can serve as a significant mitigating factor when determining liability in cases of billing mistakes due to credentialing errors. By showing that the nursing home has taken concrete steps to maintain accurate credentialing records, regulators may view the facility more favorably, potentially reducing penalties and emphasizing the organization’s good faith efforts to comply with applicable laws.

Conclusion
Billing mistakes due to lapsed credentials can pose serious risks for nursing homes, from financial penalties to potential exclusion from federal programs. Understanding when to self-disclose, managing compliance proactively, and leveraging automation can help facilities navigate these complex challenges. Ultimately, prioritizing a strong compliance culture and using technology to support credentialing can protect both the facility's reputation and its bottom line.

‍Disclaimer: This article is for educational and informational purposes only. It is not intended as legal advice. Each self-disclosure case is unique, and nursing homes should consult with qualified legal counsel to address the specific complexities and risks involved in their situation. Engaging legal professionals ensures that appropriate steps are taken and that compliance with all relevant laws and regulations is maintained.