The Centers for Medicare & Medicaid Services (CMS) today published a final rule detailing how Medicare Parts A and B providers and suppliers are to report and return overpayments within 60 days of their identification.

“The final rule makes it clear that the 60-day period does not begin … until you have quantified the amount of the overpayment – or, ‘you should have quantified the overpayment had you been acting diligently,’” said healthcare attorney David Glaser. “In other words, the 60-day clock does not start to run when you first discover a potential billing situation.” 

The new rule takes effect 30 days after publication. The preamble to the rule indicates that it is not retroactive. 

“If you are in the process of calculating a refund right now, there is a strong incentive to complete the process and submit the check in the next 30 days, when you can quite clearly cap the refund amount at 48 months,” Glaser advised. “Thereafter, the situation is more legally ambiguous.”

Glaser said that while the lookback period is six years, he expects that there will be legal arguments that a shorter time period may apply.

“That requirement is completely inconsistent with the fact that Medicare contractors may only reopen claims for 48 months absent fraud or similar fault,” Glaser explained. “It is also inconsistent with a federal statute that indicates providers and suppliers are generally ‘without fault’ and an overpayment should be waived five years after the year in which the payment was made.” 

Glaser noted that CMS is taking the position that while contractors will only be able to reopen claims for 48 months, and recovery auditors (RAs) for three years, providers or suppliers have a duty to go back six years. 

“One part of the rule is well-reasoned, (while) another is completely inconsistent with existing statutes and regulations,” Glaser said. “Having the 60 days start to run only after you have, or should have, quantified the overpayment (is) totally reasonable.”

“It appears (that) CMS is saying that if a contractor audits you, that audit will look at 48 months, and then, you have a duty to look back at the two years immediately prior to the audit period,” Glaser added. “That doesn’t make any sense at all. Fortunately, most audits take long enough that from a practical perspective, this may not matter. But the inconsistency in approach is terrible policy.” 

Details are to follow on Monitor Mondays and RACmonitor. 

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Chuck Buck is the publisher of RACmonitor and the executive producer and program host for Monitor Mondays.

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