CMS relaxes 60-day overpayment rule requirements: 5 things to know

CMS has released a final rule that provides clarification to healthcare providers regarding their obligation to return overpayments to avoid False Claims Act liability.

Here are five things to know about the final rule.

1. Mandated by the Affordable Care Act, the 60-day overpayment rule requires a healthcare provider that receives an overpayment from the state or federal government to report the overpayment within 60 days of the date on which the overpayment was identified. If a provider fails to report an overpayment, liability under the False Claims Act may be triggered.

2. The final rule from CMS establishes a process for Medicare Part A and B providers and suppliers to report and return overpayments.

3. The final rule includes a crucial clarification on the meaning of overpayment "identification." The final rule states "a person has identified an overpayment 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." This differs from the proposed rule, which stated an overpayment was identified when a person had actual knowledge of the overpayment or acted in reckless disregard or deliberate ignorance of the existence of the overpayment.

4. CMS reduced the look-back period from 10 years in the proposed rule to six years in the final rule. "This change will reduce the burden on providers when investigating suspected overpayments because providers will have to look back through six (rather than 10) years of data," said Brian P. Dunphy, an associate at law firm Mintz Levin.

5. Under the final rule, healthcare providers are given several options for reporting overpayments. According to CMS, providers "must use an applicable claims adjustment, credit balance, self-reported refund or another appropriate process to satisfy the obligation to report and return overpayments."

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