CMS reiterates physicians must report Medicare overpayments, finalizes timeline for discovery

February 29, 2016

By Alex Mitchell, Director of Information and Content

After years of speculation regarding the 60-day time frame healthcare providers have to identify and return Medicare overpayments, CMS has finalized the regulation in an attempt to bring clarity to the matter.

  • CMS finalizes its 2012 draft regulation on the process for returning Medicare overpayments.
  • Clarifies 60-day limit to return overpayments begins once an overpayment is found, or on the date “a corresponding cost report is due, if applicable.”
  • Notes provider liability if sued for overpayments includes $11,000 fine for each claim, among other penalties.

However, it’s doubtful the finalized ruling — which clarifies Part A and Part B providers must notify CMS and return overpayments within 60 days of discovering the error or risk being sued by the federal government under the False Claims Act — will do much to assuage healthcare providers’ fears that this task will require a significant administrative commitment that could cut into doctors’ other duties or expose them to financial liabilities.

The potential financial ramifications, particularly, should be physicians’ biggest area of concern. CMS will not only seek to recover damages, but will also tack on $11,000 per claim, seek civil monetary penalties and may exclude the offending provider from future participation in Medicare and Medicaid programs.

At that cost, even just a handful of undiscovered Medicare overpayments could add up quickly, meaning some providers may be tempted to forgo monitoring for these overpayments strictly out of fear of what they may find. If providers aren’t searching for overpayments, then they’ll never be responsible for returning any findings to CMS, right?

Of course not.

The CMS regulation incorporates an already existing provision of the Affordable Care Act which requires providers to actively work to self-identify and return Medicare overpayments. Numerous medical providers and advocacy groups, including the American Medical Association, objected to this rule when CMS released a draft of this regulation in 2012, particularly taking issue with language stating providers have a “perpetual duty” to monitor for overpayments.

The finalized ruling does offer a minor concession to providers by noting they’re only responsible for identifying overpayments within a 6-year time frame, down from the 10-year period initially proposed by CMS.

But, in the eyes of many providers, the order to monitor and self-report overpayments has created an unfunded government mandate. Concerned physicians have also noted this increased administrative burden placed could reduce their face time with patients.

CMS, however, offers an opposing viewpoint.

The agency has stated previously that it believes self-audits, compliance checks, and other types of research necessary to track Medicare payments are simply sound business practices that should already be in place, and therefore, do not represent an unfunded mandate.

“We disagree that this rule creates a requirement for any formal compliance plan or audit strategy,” CMS said previously. “Rather, it requires that providers and suppliers maintain responsible business practices and conduct a reasonably diligent inquiry when information indicates that an overpayment may exist.”

Regardless of the viewpoint, it’s clear CMS expects providers should be able to identify overpayments through routine audits. That’s a significant problem for providers who don’t currently have these safeguards in place.

Ignorance of the rule won’t save you if CMS discovers overpayments on its own and comes calling to reclaim them. To ensure compliance with the 60-day deadline, providers must document the discovery process when a Medicare overpayment has been discovered. This ensures both that the overpayment is within the 6-year window for discovery and is returned to CMS within its 60-day time frame to do so.

When was the last time you personally reviewed the aging on your refund account? Simply leaving this task in the hands of your biller won’t absolve you of liability if the biller doesn’t have the proper procedure in place.

Contact Jake Vugrinac, Director of Business Development, at 419-699-2707 or to help ensure you’re both discovering overpayments and know the proper process for returning them once discovered.


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