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CMS Issues Long-awaited 60-Day Overpayment Final Rule

CMS finally published the long-awaited final rule for reporting and returning overpayments, four years after CMS published the proposed rule, which requires hospitals and other providers to report and return any overpayments within 60 days of the date that the overpayment is identified or on the due date of any corresponding cost report, whichever is later.

The Affordable Care Act requires any person who received an overpayment to report it and return it to the state, intermediary, or carrier within 60 days. Failure to return overpayments within 60 days can result in treble damages, which are three times the amount of the overpayment. The federal False Claims Act also imposes penalties of a minimum of $5,500 and a maximum of $11,000 for each Medicaid claim.

The 60-day clock starts “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. A person should have determined that the person received an overpayment and quantified the amount of the overpayment if the person fails to exercise reasonable diligence and the person in fact received an overpayment.” The key provision is that the person exercises reasonable diligence and is quantifying the amount of the overpayments.

The final rule negates the concerns of the Kane case, which found the 60-day clock starts to run as soon as the provider is put on notice of a potential overpayment. (United States ex rel. Kane v. Healthfirst, Inc.) The clock is not ticking while the provider is conducting its reasonable diligence into whether there is an overpayment.

The requirements protect the Medicare Trust Fund against fraud and improper payments. It also ensures compliance with the current requirements.

To see a copy of the rule, please visit: