Effective March 14, 2016, the CMS Final Rule regarding the reporting of overpayments took effect. This ruling clarifies the standards that have been unclear for years since the the PPACA created what is called the "60-day rule." The problem has been the unclear standards on what it means to "identify" an overpayment and when the 60 day clock begins running.
Now, the 60-day rule requires anyone who has received an overpayment from either Medicare or Medicaid to report and return the overpayment within the latter of:
Failure to both report and return an identified overpayment within the time-frames specified may be subject to substantial liability under the False Claims Act.
The following are some key points of this rule:
Under the rule, providers have an obligation to exercise “reasonable diligence” through “timely, good faith investigation of credible information.” No longer can a provider simply respond to refund requests by CMS or compliance hotline calls. They must also be proactive and perform their own internal audits. IF the provider suspects there is an overpayment, reasonable diligence must be taken to investigate, but the provider's investigation cannot take more than 6 months from the receipt of the credible information to be completed.
Overpayments may only be identified within 6 years after they were received. Additionally, reopenings are also extended to 6 years and are limited to reopenings by the provider or supplier.
The 60-day clock begins after the reasonable diligence period has concluded, which may take “at most 6 months from receipt of credible information, absent extraordinary circumstances” such as Stark Law violations, that are referred to the CMS Voluntary Self-Referral Disclosure Protocol. In extraordinary situations, an overpayment is not “identified” until the amount of the refund has been “quantified.”
Bottom line: Providers have 6 months to investigate and then another 60 days to report and return the overpayment for a grand total of 8 months.
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