CMS's Final Overpayment Rule

    View Authors February 2016

    After receiving scores of comments over nearly four years, the Centers for Medicare and Medicaid Services (CMS) has released its final rule (the “Final Rule”) addressing the reporting and returning of overpayments made providers and suppliers who receive funds through Medicare. The Final Rule implements Section 6402(a) of the Affordable Care Act, which requires that healthcare providers and suppliers report and return overpayments by 60 days after (1) the overpayment is identified or (2) the date on which the corresponding cost report is due, whichever is later.

    The Final Rule goes a long way toward addressing and clarifying several important concerns raised by stakeholders, especially those surrounding the length of the “lookback” period (now set as six years) and the (often thorny) determination of when an overpayment is “identified.” Even with this added guidance, however, questions remain, and compliance with the Final Rule may impose significant administrative burdens on providers and suppliers. For example, certain statements in CMS’s commentary appear to raise the question of whether the Final Rule effectively imposes an obligation on providers and suppliers to uncover any overpayments received during the six-year lookback period.

    Despite these ambiguities, effective March 14, 2016 providers and suppliers will be required to comply with the Final Rule’s overpayment regime. Accordingly, compliance with the Final Rule is critical to avoid overpayment pitfalls and to mitigate the risk associated with potential False Claims Act liability, civil monetary penalties and possible exclusion from the Medicare program. This client alert highlights the major Final Rule provisions.