CMS Releases Final “60-Day Rule”

The Centers for Medicare & Medicaid Services (CMS) released the final version of a 2012 proposed rule that requires Medicare Parts A and B health care providers and suppliers to report and return overpayments by the later of the date that is “60 days after the date an overpayment was identified, or the due date of any corresponding cost report if applicable.” A separate final rule was published on May 23, 2014, that addresses Medicare Parts C and D overpayments.

Background

The final rule implements Section 6402(a) of the Affordable Care Act (ACA), now also Section 1128J(d) of the Social Security Act. The provision impacted Medicare and Medicaid immediately upon implementation in March 2010. Section 6402 increased the penalty for failure to return overpayments from Medicare and Medicaid payments and mandated the timeline for returning those overpayments. Its impact solely under the statute has not been determined. CMS issued an implementing proposed rule on February 16, 2012, with comments due by April 16. AHCA’s comments are available here.

Preliminary Details

Section 6402 increases the penalty for failure to return overpayments from Medicare and Medicaid and mandates the timeline for returning those overpayments by providing a return deadline of 60 days after the identity of an overpayment.

• 60-Day Timeframe Further Defined: The 60 day timeline is a new requirement as stipulated in Section 6402. No timeline had ever before been provided. However, CMS did modify its interpretation of when the 60 day clock starts stating that “the 60-day time period begins when either the reasonable diligence is completed or on the day the person received credible information of a potential overpayment if the person failed to conduct reasonable diligence and the person in fact received an overpayment.”
• Look-Back Period Reduced: In the proposed rule, CMS indicated a 10 year look-back period for potential overpayments. In the final rule the look-back period for overpayments is six years, reduced from 10 years in the proposed rule.

Finally, as stated in the proposed rule, failure to report overpayments within the 60-day time period looking-back over six years could put providers at risk of a possible violation of the False Claims Act (FCA). Click here for AHCA/NCAL member guidance on the FCA.

Further Information

This week, AHCA/NCAL will produce a summary of the final rule as well as a suggested checklist of 60-Day Rule activities members should undertake to avoid challenges under the final regulation. If you have questions, suggestions or concerns, please contact Mike Cheek at mcheek@ahca.org.