CMS Accepting Comments on Proposal Rule Related to Reporting and Returning Overpayments

The Centers for Medicare & Medicaid Services (CMS) is currently accepting comments on a proposed rule related to Medicare overpayments to providers. If finalized, the proposal would require providers to report and return overpayments within 60 days of identification, and gives CMS the authority to look back 10 years into providers’ claims to review potential overpayments. Click here to review the proposed rule. Providers and stakeholders can submit comments on the proposal through April 16.

In its proposed rule, CMS defines an overpayment as one of the following:

  • Medicare payments for non-covered services
  • Medicare payments in excess of the allowable amount for an identified covered service
  • Errors and non-reimbursable expenditures in cost reports
  • Duplicate payments
  • Receipt of Medicare payment when another payor has the primary responsibility for payment

When an overpayment is identified, CMS proposes that the overpayment must be reported and returned within 60 days. Further, CMS has proposed a look-back period that gives the agency the authority to review claims dating back 10 years. The 10-year timeline was selected because it is the outer limit of the False Claims Act statute of limitations. CMS rationalized the appropriateness of the 10-year look-back by stating that providers “should have certainty after a reasonable period that they can close their books and not have ongoing liability associated with an overpayment”. Further, CMS believes that the “length of the look-back period is long enough to sufficiently further [CMS’] interest in ensuring that payments are timely returned”.

If CMS’ proposed rule is becomes final, the existing voluntary refund process would remain in place. The process requires providers to submit a form made available by the Medicare contractor, which also requires providers to summarize why the refund is being made, how it was discovered, a description of the corrective action plan to ensure that it doesn’t happen again, and whether a Corporate Integrity Agreement with OIG is in place at the time of the refund.

Fortunately for providers experiencing reduced reimbursement due to continuous Medicare cuts, CMS recognizes there will be cases in which the overpayment might be impossible for the provider to pay back during the 60-day time period. In these instances, CMS recommends that the provider must use the existing Extended Repayment Schedule process to extend the repayment deadline. However, this process requires significant documentation to illustrate financial hardship and is not automatically granted.

HCAF and the National Association for Home Care & Hospice (NAHC) generally support much of the proposed rule, but offered recommendations to CMS that could improve it. Recommendations submitted in formal comments addressed the inevitable paperwork burden for agencies, which already cancel claims and submit a corrected claim for overpayment issues. Under the proposal, this would no longer be permitted. Further, the comments stress industry concerns that an anonymous complaint could trigger an audit of 10-year old claims just to avoid an accusation of a False Claims Act violation.

HCAF will continue monitoring this proposed rule and report any developments as they happen.

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