The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule as to how it will implement the 60-day deadline for returning Medicare and Medicaid overpayments enacted as part of the Affordable Care Act (ACA).
Section 6402(a) of the ACA created section 1128J of the Social Security Act (SSA), and it establishes that the failure to report and return an overpayment within 60 days of identifying its existence can give rise to liability under the False Claims Act (FCA). The proposed rule applies to overpayments identified by Medicare Part A and B providers and suppliers.
According to the proposed rule, an overpayment is “identified” if the provider or supplier has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment. CMS believes that this standard, which is consistent with the FCA, will motivate providers and suppliers to exercise reasonable diligence to determine whether an overpayment exists.
Section 1128J allows providers who submit cost reports to report certain types of overpayments when the cost report is due rather than within 60 days of identification, but CMS said that such providers cannot delay the return of claims-based overpayments.
Providers and suppliers would report overpayments to the appropriate Medicare contractors using the existing voluntary refund process in Chapter 4 of the Medicare Financial Management Manual, which will be renamed the “self-reported overpayment refund process.” Because the self-disclosure mechanisms employed by CMS and the Office of Inspector General (OIG) may create duplicate reporting obligations, CMS proposed that providers and suppliers who report overpayments through the OIG self-disclosure protocol should not also report and return overpayments through the self-reported overpayment refund process. But providers and suppliers who report overpayments through CMS’s self-referral disclosure protocol still must go through the self-reported overpayment refund.
For now, CMS has determined that all providers should report overpayments that may have occurred within a ten-year look-back period, which is consistent with the ten-year statute of limitations under the FCA. CMS therefore proposed an amendment to the reopening rules to allow for this change. At present, the reopening rules state that the Medicare contractors can reopen claims within one year for any reason, within four years for “good cause,” and any time if evidence of “fraud or similar fault” exists.
CMS is seeking comment on anticipated burdens and costs associated with the proposed rule’s reporting and repayment requirements, alternative approaches that would eliminate the need for multiple reports of identified overpayments, the appropriateness of the ten-year look-back period, and other ways to alleviate provider and supplier burdens that may arise from complying with the increased overpayment reporting and repayment obligations under the ACA. The comments are due by April 16, 2012.