CMS recently published its proposed rules on reporting and returning overpayments. These rules are intended to implement the 60 day overpayment reporting requirement pursuant to the Affordable Care Act (the “ACA”). The ACA created a new section 1128J(d) of the Social Security Act requiring a person who receives an overpayment to return and report the overpayment to HHS, the State, a carrier or a contractor and notify the recipient of the reason for the overpayment. The statute requires that all overpayments be refunded within 60 days after the date the overpayment was identified or the date of any corresponding cost report (as applicable), whichever is later.
The proposed regulations only relate to Medicare Parts A and B. Medicaid, Medicare Advantage, Part D, and managed care organizations are not covered by the proposed rules; however, the 60 day shot clock noted in the statute still applies.
Reporting Overpayments
The proposed rules rename the current voluntary refund process the “self-reported overpayment refund process” (described more fully in the Medicare Financial Management Manual). Providers will use voluntary refund forms currently on the websites of their Medicare contractors. Reports of overpayments will require the inclusion of the following information:
1) Name;
2) TIN;
3) How the error was discovered;
4) The reason for the overpayment;
5) The health insurance claim number, as appropriate;
6) Date of service;
7) Medicare claim control number, as appropriate;
8) NPI;
9) Description of the corrective action plan to ensure the error does not occur again;
10) Whether the person has a corporate integrity plan with the OIG or is under the OIG Self-Disclosure Protocol;
11) The timeframe and the total amount of the refund for the period during which the problem existed that caused the refund;
12) If a statistical sample was used to determine the overpayment amount, a description of the statistically valid methodology used to determine the overpayment; and
13) A refund in the amount of the overpayment.
Under the proposed rules, providers are required to report the overpayment within 60 days of identification and refund the overpayment within the same 60 day period. Providers may request a refund extension through the extended repayment schedule. A person has “identified” an overpayment if that person has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment. Providers who retain an overpayment after the 60 day deadline for reporting and returning the overpayment are liable under the False Claims Act. Additionally, any person who knows of an overpayment and does not report and return the overpayment may be found liable for Civil Monetary Penalties and excluded from participation in federal health care programs.
Significantly, the proposed rules also set a lookback period of 10 years, meaning that if a provider identifies an overpayment within 10 years of the date the overpayment is received it will have to report and refund such overpayment.
SRDP and OIG Self-Disclosure Protocol
CMS attempts to reconcile these proposed regulations with the OIG Self-Disclosure Protocol and the new CMS Self-Referral Disclosure Protocol (“SRDP”) (which allows reports of Stark Law violations). The reconciliation falls flat and creates confusion which will hopefully be remedied in the final rule.
The 60 day deadline for returning overpayments will be suspended if the OIG acknowledges receipt of submission to the OIG Self-Disclosure Protocol. This suspension will last until a settlement agreement is entered, the person withdraws from the OIG Self-Disclosure Protocol, or the person is removed from the OIG Self-Disclosure Protocol. Additionally, a person satisfies the reporting requirements listed above by making a disclosure under the OIG Self-Disclosure Protocol which results in a settlement agreement.
Similarly, the 60 day deadline for returning overpayments is suspended if CMS acknowledges receipt of a submission to the SRDP until such time as a settlement agreement is entered, a person withdraws from the SRDP, or the person is removed from the SRDP. However, the reporting requirement described above is not tolled by submission to the SRDP.
Conclusion
Regardless of these proposed rules, providers must currently report and refund overpayments within 60 days per the ACA. CMS has opened public comment on these proposed rules through April 16, 2012. If you would like assistance on drafting comments or assistance with reporting an overpayment please contact Don Black or Elana Zana.
