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CLIENT ALERT: Medicare Trust Fund to Run Out of Funding Beginning in 2026, Likely to See an Increase in Audits, Overpayment Demands and Extrapolations

Client Alert

Pursuant to a Medicare Trustee Report released on June 5, 2018, the Medicare trust fund will run out of funding beginning in 2026, which is three years earlier than previously expected.  Although the Trustee’s report requests that Congress and the President act with urgency to remedy this problem, in the short term, we expect to see an increase in government payer audits, overpayment demands, and extrapolations.

 

If implemented in full strength, these overpayment demands and extrapolations can result in payers recovering millions of dollars from providers, which may be returned to the trust fund.  In the alternative, payers and their contractors may allege overpayments so that providers agree to a settlement requesting the provider to accept pennies on the dollar for the true amount owed to the provider.

 

Either way, it is now more crucial than ever before that providers take action when government payers and their contractors seek to conduct pre- and post-payment audits and otherwise seek the refund of overpayments.

 

BMD’s Healthcare Department can meet with you to discuss your options if your practice is facing pre- and/or post-payment audits and denials.  If you are subjected to an overpayment, including an extrapolation, our experienced team can strategize your appeal and arguments for success in challenging the overpayment allegations.

 

If you have any questions concerning payer audits, appeals, overpayments, and extrapolations, or the administrative appeal process in general, please contact  Amanda L. Waesch, Esq. (alwaesch@bmdllc.com) or Bryan E. Meek, Esq. (bmeek@bmdllc.com), attorneys in Brennan, Manna & Diamond’s Provider Relations, Audits, Appeals, and Negotiations Unit, a division of BMD’s Healthcare Department.

 


RNs and APRNs Take Note: Ohio Board of Nursing Mandates a New CE Reporting Period

Ohio’s Board of Nursing has updated the continuing education reporting period for RNs and APRNs. Beginning March 26, 2026, CE credits must be completed between July 1 and June 30 of odd-numbered years, replacing the previous November to October timeframe.

Ohio Med Spas: Peptide Do's and Do Not's

Recent guidance from the Ohio Board of Pharmacy outlines key compliance requirements for med spas using peptides. While some peptide drugs are FDA approved, others are not or cannot be compounded. Med spa operators should ensure they source medications from licensed suppliers, avoid non-approved or “research use only” products, and follow all compounding and storage regulations to maintain compliance and avoid enforcement actions.

Substance Use Disorder Providers: 42 CFR Part 2 Now Enforceable

Updates to 42 CFR Part 2 are now enforceable, bringing significant changes to how substance use disorder (SUD) records are handled. The Final Rule aligns Part 2 more closely with HIPAA, introduces updated penalties, allows a single patient consent for treatment, payment, and operations, and adds new requirements for Notices of Privacy Practices. It also creates a formal definition of SUD counseling notes and imposes strict consent requirements for their use and disclosure. Providers should review and update policies to ensure compliance.

AAA Introduces AI-Assisted Arbitrator for Certain Disputes

The American Arbitration Association has introduced an AI-assisted arbitration platform designed to streamline certain document-based disputes. While a human arbitrator still makes the final decision, the technology can improve efficiency, reduce costs, and accelerate case resolution. Companies should weigh these benefits against considerations such as transparency, risk, and contractual requirements before adopting AI-assisted arbitration.

Quiet Hours Texts and TCPA Claims: Consent Remains King as Courts Divide on Text Messages

Businesses face increasing TCPA lawsuits over off-hours marketing texts, but recent court decisions highlight strong defenses. Clear consumer consent and updated terms and conditions can defeat many claims, while a growing number of courts are finding that text messages are not “telephone calls” under the statute. Proactive compliance measures, including clickwrap agreements and forum-selection clauses, are critical to reducing risk.