Long-Awaited Final Rule Clarifies 60-day Repayment Deadline

By Kelly A. Briganti, Editorial Director, G2 Intelligence

Labs and other providers are required by a provision enacted in the Affordable Care Act to return to Medicare overpayments within 60 days of identifying the overpayment. Violations of the rule subject the provider to False Claims liability and civil monetary penalties including treble damages and a fine ranging from $5,500 to $11,000 per claim. What constituted identification of an overpayment, however, caused much debate. A 2012 proposed rule didn’t add much clarity and a New York federal court decision last year in U.S. ex rel. Kane v. Continuum Health Partners, Inc., caused much consternation.

That court said the 60-day deadline for returning overpayments is triggered when providers are on notice that they may have received overpayments—not after they’ve determined with certainty the precise amount. The court argued that triggering the 60-day deadline only after providers did all they needed to “determine conclusively the precise amount owed to the Government” created “a perverse incentive to delay learning the amount due and relegat[ed] the sixty-day period to merely the time within which they would have to cut the check.”

Now, however, CMS has issued a final rule interpreting the 60-day repayment requirement. The agency says, in its press release announcing the final rule, that it includes “clarification around: the meaning of overpayment identification; the required lookback period for overpayment identification; and the methods available for reporting and returning overpayments to CMS.”

On those three issues, the final rule states:

• An overpayment is identified “when the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.”
• The lookback period is six years, meaning if an overpayment is identified within six years of the date payment was received, the recipient must comply with the 60-day rule.
• Repayments must be achieved using “an applicable claims adjustment, credit balance, self-reported refund, or another appropriate process.”

Additionally, CMS notes in its release that reporting through CMS’ Self-Referral Disclosure Protocol or the OIG’s Self-Disclosure Protocol complies with the rule if the reporting provider is “actively engaged in the respective protocol.”

For further discussion of this final rule and its implications, see upcoming issues of National Intelligence Report and G2 Compliance Advisor.