CMS Releases Proposed Rule on 60 Day Medicare Repayment Provision
The Centers for Medicare and Medicaid Services (CMS) has released a draft of the Proposed Rule on reporting Medicare overpayments. The Proposed Rule is expected to be published in the Federal Register on February 16, 2012.
The reporting provision, which was included as part of the 2010 Patient Protection and Affordable Care Act, requires health care providers to report and return Medicare overpayments within 60 days after the overpayment is identified, or the date any corresponding cost report is due. Significantly, providers who fail to do so are subject to liability under the Federal False Claims Act.
The reporting provision caused significant concern in the health care industry, as providers and their counsel scrambled to decipher when exactly the provision might apply. What constitutes an “overpayment”? When is an overpayment “identified”? What if a provider thinks he/she may have identified an overpayment, but needs more than 60 days to figure it out?
The Proposed Rule, which is open for public comment until 60 days after Feb. 16, provides clarification on some of these provisions. Some of the more pertinent details include:
- The reporting provision will apply only to Medicare Part A and Part B providers and suppliers.
- The Proposed Rule contains several examples of what may constitute an “overpayment”, such as:
o Medicare payments for noncovered services
o Payments in excess of the allowable amount for an indentified covered service
o Errors and nonreimburseable expenditures in cost reports
o Duplicate payments
o Receipt of Medicare payment when another payor had the primary responsibility for the payment.
- An overpayment is “identified” when a person acts with actual knowledge of, in deliberate ignorance of, or with reckless disregard to the overpayment’s existence. Importantly, if a provider receives information that creates an obligation to make a reasonable inquiry to determine if an overpayment exists, the failure to make such an inquiry could result in a provider “retaining” an overpayment. The Proposed Rule states that for example, a provider who receives an anonymous hotline telephone complaint about a potential overpayment has incurred an obligation to timely investigate that matter. (This will likely be a source of significant concern and generate many comments to the Proposed Rule.)
- The reporting requirement is suspended for providers who disclose actual or potential Stark law violations under the Medicare Self-Referral Disclosure Protocol; or who report self-discovered evidence of potential fraud to the Office of the Inspector General (OIG) through the OIG Self-Disclosure Protocol.
- Providers who have identified an overpayment, but need additional time to make repayment must use CMS’ existing Extended Repayment Schedule. No exceptions to the 60-day rule will be made.
