Are you a health care provider who received funds from the Health Resources and Services Administration's ("HRSA' s") COVID-19 Uninsured Program? If so, more inquiries and repayment demands may be coming.

The OIG Findings

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

HRSA Blames HHS Policy Decision and Third-Party Data

The report provides some 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 roster listing the patients who received COVID-19 testing and treatment services and were determined by the provider to be uninsured. That’s where the problem arose.

According to HRSA, Health and Human Services made a "policy decision" not to require patient Social Security numbers (SSNs) as part of the patient roster, fearing it would 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 check for 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 attestation that health insurance coverage had been checked and the patient was uninsured. If no SSN was provided, there was also no attempt post-payment to check for potentially retroactive coverage, such as Medicaid or COBRA.

The vast majority of the claims paid by the Uninsured Program were for patients for whom no SSN was provided, making up 82% of patients in 2020, 91% in 2021, and 94% in 2022.

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

Other Eligibility Issues

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

HRSA Post-Payment Reviews Likely

What does this mean for providers? If you submitted claims and received payments from the Uninsured Program, it's likely you may receive (or already have received) an inquiry from HRSA. In March 2022, HRSA started a post-payment review process for the program. These efforts may escalate in light of the OIG's findings.

Although the OIG recommends HRSA identify and recoup all of the improper payments, it’s unclear whether HRSA will pursue repayment if a provider can substantiate it had appropriate processes in place to identify the insurance and its eligibility attestation was made in good faith.

Moreover, to identify and recoup improper payments, especially when the coverage was retroactive and could not have been identified at the time of service, would unfairly penalize providers. If insurance had been identified at or up to 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 typically no longer than one year after the date of service.

What should providers do now?

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

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

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

Providers receiving a post-payment review should work with legal counsel to respond, making sure to include detailed explanations of the policies and procedures the provider implemented to ensure claims submitted to the program were appropriate. If a provider identifies claims paid by the program that were not COVID-19 related, it should also work with counsel to notify HRSA and repay the program.

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