CMS delays repayment final rule a year

CMS announces long-term care providers participating in bundled payments initiative
CMS announces long-term care providers participating in bundled payments initiative

The Centers for Medicare & Medicaid Services on Tuesday made official its plan to postpone implementation of a new rule on collecting hundreds of millions of dollars in overpayments until Feb. 16, 2016 — but providers remain on the hook for returning the money before then.

The proposed rule would require Medicare providers and suppliers of services under Parts A and B of title XVIII to return overpayments within 60 days — a move the agency says is required by the Affordable Care Act. In Tuesday's Federal Register notice, CMS justified the one-year delay because of “exceptional circumstances” regarding the “complexity of the rule and scope of comments.” CMS first proposed the rule in February 2012.

A key feature of the new rule would give CMS a 10-year “look-back” period on claims not identified by a provider or supplier, something that has led to harsh industry criticism that the agency is overstepping its statutory authority because it conflicts with shorter look-back periods for Part C and D overpayments.

Kirk Ogrosky, a partner with Arnold & Porter LLP in Washington, said while stakeholders generally welcome the one-year extension, providers and suppliers will still be culpable for failing to give back overpayments — rule or no rule. Penalties now include potential False Claims Act liability carrying fines as high as $10,000 per unreturned overpayment, as well as possible exclusion from Medicare.

A 2012 Office of Inspector General report noted that the CMS had failed to collect over $300 million in overpayments dating back more than two years. The agency had succeeded in collecting a little more than $84 million by 2010, the OIG noted.