Insights
Thought Leadership
February 24, 2012
CMS Proposes to Crack Down on Delinquent Refund of Medicare Overpayments
The Centers for Medicare & Medicaid Services (CMS) plans to get aggressive about Medicare overpayments. The agency has recently proposed a rule requiring providers and suppliers receiving funds under the Medicare program to report and return any overpayment within 60 days after the date on which the overpayment was identified.[1] The proposed rule is designed to implement a provision in the Affordable Care Act.[2] Failure to report and refund overpayments within the specified time frame could result in liability under the False Claims Act[3] and other penalties, including exclusion from federal healthcare programs.
An "overpayment" is defined as any funds that a provider or supplier is not entitled to retain. Such overpayment could include:
[1] Medicare Program; Reporting and Returning of Overpayments, file code CMS-6037-P (proposed Feb. 16, 2012) at http://federalregister.gov/a/2012-03642.
- Medicare payments for noncovered services.
- Medicare payments in excess of the allowable amount for an identified covered service.
- Errors and nonreimbursable expenditures in cost reports.[4]
- Duplicate payments.
[1] Medicare Program; Reporting and Returning of Overpayments, file code CMS-6037-P (proposed Feb. 16, 2012) at http://federalregister.gov/a/2012-03642.
[2] Patient Protection and Affordable Care Act (Pub. L. 111-148) as amended by Health Care Education Reconciliation Act of 2010 (Pub. L. 111-152), collectively known as the Affordable Care Act. Section 6402(a) of the Affordable Care Act establishes a new section 1128J(d) of the Social Security Act (title XVIII) titled "Reporting and Returning of Overpayments."
[3] False Claims Act, 31 U.S.C. 3729 et seq. The government has the authority to impose severe penalties on contractors who knowingly present false or fraudulent claims to the government for payment or approval or to avoid or decrease an obligation owed to the government. Liability under the act can be established in the absence of actual knowledge of the falsity of information where it can be shown that a contractor submitted claims in deliberate ignorance, or in reckless disregard, of the truth or falsity of the information.
[4] Overpayments can also result from estimated payments made to providers or suppliers for services with the knowledge that a reconciliation of those payments to actual costs will be done when the actual costs or related information becomes available. In those situations (e.g., payments for graduate medical education), the overpayment is due either 60 days after it has been identified or on the date any cost report is due, whichever is later.