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60 Day Overpayment Questions Answered – CMS Releases Final Rule

Calendar CMSThe Centers for Medicare & Medicaid Services (CMS) published the Final 60 Day Overpayment Rule on Thursday, four years after the initial rule was released.

This Final Rule clarifies application of the 60-day reporting requirements instituted pursuant to the Affordable Care Act. Under the 60-day Overpayment Rule Medicare providers must report and return overpayments within 60 days of when an overpayment is identified (or the cost report due date, when applicable).

Prior to the publication of the Final Rule, there was much speculation, and interpretation by courts as to how to define “Identification.” This definition is important because when an overpayment has been “identified” as provided in the law, the 60 day clock starts ticking and the deadline for reporting and repayment is set.

Key Clarifications On Overpayment

The Final Rule provides a key addition in how “identification” is defined by adding that an overpayment is “identified” after such overpayment has been quantified. The Rule also requires that providers exercise “reasonable diligence,” which according to CMS requires “both proactive compliance activities to monitor claims and reactive investigative activities undertaken in response to receiving credible information about a potential overpayment.”

The Final Rule further clarifies that providers have up to 6 months to investigate a possible billing error before the 60-days start to run. This replaces an indefinite requirement set forth in the Proposed Rule that providers act with “all deliberate speed.”

Another noteworthy change in the Final Rule is the stated “look-back period.” In the Proposed Rule, overpayments had to be reported and returned if a person identified the overpayment within ten years of the date the overpayment was received. However, the Final Rule reduces this time frame to six years. This shortened “look-back period” is likely to reduce the administrative burden of complying with the law.

To review the Final Rule in its entirety it is available at here

Need Help?

If you have questions about the overpayment rules or need assistance, we can help you. Please contact Danielle Hildebrand at dhildebrand@jeylaw.com or 678.325.3872.

 

Medicare & Medicaid Deadline For Overpayment Clarified

60 Days Medicaid and Medicare RuleFederal Court Finds Sixty Day Rule Deadline Begins to Run When Put on Notice of Potential Overpayments

When the Affordable Care Act (ACA) was passed, a new requirement for reporting overpayments was created. This new obligation, often referred to as the ‘Sixty Day Rule’ requires providers who receive an overpayment of Medicare or Medicaid funds to “report and return” the overpayment to the government.

According to the statute, an overpayment must be reported and returned within sixty days of the “date on which the overpayment was identified.” Failing to do so is a violation of the False Claims Act.

Although Centers for Medicare and Medicaid Services (CMS) has provided some guidance on when an overpayment is “identified” within the context of Medicare, now a New York Federal Court has weighed in on the meaning and application of the ACA sixty-day rule as it applies to Medicaid.

In a case before a New York Federal Court, the U.S. Department of Justice asserted that a hospital improperly billed Medicaid in 2009 and 2010 and violated the FCA by delaying the return of overpayments. Such overpayments were the result of a billing system software glitch. The case was brought with the assistance of a former employee who had investigated the issue. Such employee had provided to hospital administrators a list of around 900 claims that were likely affected by the glitch which was subsequently ignored by the hospital.

The Court had to decide how to define the key term in the statute – “identified.” In the case, the former employee had not conclusively proven the identity of any overpayments. As it turned out, hundreds of the claims he listed had not actually been overpaid. However, he did recognize nearly five hundred claims that did in fact turn out to be overpaid as worthy of attention.

After looking at the legislative history and purpose, the Court concluded that the 60-day clock begins ticking when a provider is put on notice of a potential overpayment, rather than when the overpayment is conclusively ascertained. This holding is in line with CMS’s patchwork of guidance for Medicare overpayments.

As a result, providers facing a potential overpayment must take action immediately to meet the 60 day deadline and avoid False Claims liability. Every health care practice should have a protocol in place to ensure that possible overpayments are investigated in a timely manner and such investigation is documented appropriately. Failure to report overpayments within that time frame could subject providers to huge penalties.  

If you have any questions about the 60-day rule or need assistance with investigating and reporting a potential overpayment contact Danielle Hildebrand at dhildebrand@jeylaw.com.