On February 11th, the Centers for Medicare and Medicaid Services (CMS) finalized the Medicare Overpayment Reporting Rule. Originally introduced by the Affordable Care Act (ACA) in 2010 as a means to combat fraudulent overpayments and ultimately protect the Medicare Trust, this rule clarifies the requirements for reporting and returning “self identified” overpayments to Medicare, and the timeframes in which providers are expected to do so.
Medicare Overpayment Reporting Rule
The rule requires providers to report and return overpayments within 60 days of the date that the overpayment was identified, or the date the corresponding Medicare Credit Balance Report is due – whichever is later. The final rule also reminds providers that they are subject to statutory requirements and may face potential penalties through the False Claims Act (FCA) or Civil Monetary Penalties Law (CMPL) as well as “exclusion from federal healthcare programs for failure to report and return overpayments”.
Self-identification is defined as “a person has identified an overpayment when the person has or should have, through the exercise of due diligence, determined that the person has received an overpayment and quantified the amount of the overpayment”. Additionally, overpayments must be reported and returned if identified within six (6) years of the date the overpayment was received. Recovery Auditors (RAs) are limited to a three (3) year look back period and Medicare Administrative Contractors (MACs) have a 48-month period to re-open claims, but through this rule providers have a duty to go back six (6) years in their review.
This rule goes into effect 30 days after publication, therefore we suggest that providers review their aging reports to identify overpayments and return these through adjustment or refund to the Medicare contractor within the next 30 days to avoid potential issues with the additional look back period once the rule goes into effect. Providers should be diligent in the identification and return of overpayments.
The Medicare program has several avenues for return of overpayment:
Refund directly to the contractor
Adjustment claim in the Medicare Common Working File