Successfully Challenging $1M Medicaid Overpayment Claim


Our client, a healthcare provider, was told by a third-party auditor and claims administrator (“TPA”) for Medicaid claims that the provider had substantially overbilled for its services. The TPA demanded reimbursement of nearly $1 million. We attacked the audit and its methodology, saving the client 90 percent of the amount demanded, and freeing them up to continue to process claims for reimbursement without problems going forward. 

The Challenge

Healthcare providers are routinely reimbursed for patient services by commercial insurers and government programs like Medicare and Medicaid. Both private and public health insurance payers hire third party contractors to manage claims and conduct post-payment audits to determine whether they believe they have overpaid particular healthcare providers for services over a given period of time. After gathering records and analyzing billing and coding practices from the healthcare provider, these auditors may determine that the health insurance payor overpaid for services. When this happens, the payor will attempt to claw back the amount it claims to have overpaid by demanding the money back from the healthcare provider and, in many circumstances, offsetting the amounts from future claims. 

Our client, a healthcare provider, was hit with a bill for nearly $1 million after the TPA audited a sample of the client’s claims and determined that Medicaid overpaid the client by that sum over several years. 

The Solution 

The healthcare provider hired Schwartz, Conroy & Hack PC to deal with this nearly $1 million reimbursement demand. We evaluated the audit on which this demand was based, and we hired our own expert to conduct our own independent audit of the billing and medical information in connection with these claims. Our auditor found that our client had properly billed Medicaid for services that were properly performed, and that the reimbursement demand was based on statistically invalid information. 

When conducting analyses of providers’ claims data, insurance auditors often use extrapolation. For instance, say the services rendered for $1 million worth of claims involved 1,000 patient charts. The auditors may examine 20, 30 or 50 charts and conclude that the trends in that sample were representative of the activity for the entire population of charts. Extrapolation relies on assumptions that may be statistically unsound and often leads to conclusions that are legally invalid. We were able to attack the auditors’ use of extrapolation and poke holes in their analysis of our client’s billing and supporting documentation.

The Result

As a result of our attack on the auditors’ extrapolation methods, as well as the assistance of the expert we engaged on behalf of our client, Schwartz, Conroy & Hack PC was able to resolve a nearly $1 million claim with a mid-five-figure settlement. Further, we negotiated that sum agreed to be paid by our client to be deducted over time from future reimbursements, so that our client would not be required to write a check for a lump sum.

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Evan S. Schwartz
Founder of Schwartz, Conroy & Hack