Medicare Releases Final Rule on Overpayments

Rule clarifies when providers must report and return self‑identified overpayments.

CMS has published a final rule that requires Medicare Parts A and B providers and suppliers to report and return overpayments by either 60 days after the date an overpayment was identified, or the due date of any corresponding cost report, whichever is the later date.

The rule clarifies requirements for the reporting and returning of self‑identified overpayments. Healthcare providers and suppliers have been subject to the statutory requirements found in section 1128J(d) of the Social Security Act and could face potential False Claims Act liability, Civil Monetary Penalties Law liability, and exclusion from federal health care programs for failure to report and return an overpayment. 

The Act requires a person who has received an overpayment to report and return the overpayment to the Secretary, the state, an intermediary, a carrier, or a contractor, as appropriate, at the correct address, and to notify the Secretary, state, intermediary, carrier, or contractor to whom the overpayment was returned in writing of the reason for the overpayment.

Additionally, the Act requires that an overpayment be reported and returned by the later of either 60 days after the date on which the overpayment was identified; or the date any corresponding cost report is due, if applicable. 

The final rule establishes a lookback period so that overpayments must be reported and returned only if a person identifies the overpayment within six years of the date the overpayment was received. Specifying the length and other parameters of the look back period provides additional clarity for providers and suppliers who have identified an overpayment.

The final rule also stipulates that providers and suppliers must use an applicable claims adjustment, credit balance, self‑reported refund, or another appropriate process to satisfy the obligation to report and return overpayments.  This approach for returning overpayments provides an array of familiar options from which providers and suppliers can select.

The rule also specifies that if a provider or supplier has reported a self-identified overpayment to either the Self-Referral Disclosure Protocol managed by CMS or the Self-Disclosure Protocol managed by the Office of the Inspector General (OIG), the provider or supplier is considered to be in compliance with the provisions of this rule as long as they are actively engaged in the respective protocol.

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About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.

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