CMS Finalizes Medicare Overpayment Reporting Rule

by Steven Andrews

Three years after publishing a notice of public rulemaking requiring hospitals to report Medicare overpayments to CMS, the agency finalized a rule that makes significant concessions to providers, but still requires a six-year lookback period.

An overpayment is considered identified by Medicare when an employee using “reasonable diligence” has, or should have, determined it was received and quantified the amount, according to the final rule.

The rule requires hospitals to report and return overpayments by the later of:

• 60 days after the date on which the overpayment was identified
• The date any corresponding cost report is due, if applicable

The final rule creates regulations originally established by the Affordable Care Act (ACA) in 2010 to combat Medicare overpayments “knowingly” received by a provider or supplier. A 2012 proposed rule to implement these provisions included a 10-year lookback period that many providers found to be too administratively burdensome, according to comments in the final rule.

CMS reminds providers that even in the absence of the final rule, they are still required to follow the requirements of the ACA regarding overpayments and could face False Claims Act and Civil Monetary Penalty liability, as well as exclusion from federal healthcare programs.