Medicare overpayment rule might take effect in February

Medicare Part A and B providers would have 60 days to return overpayments under the new rule.
Medicare Part A and B providers would have 60 days to return overpayments under the new rule.

Barring objections from the Office of Management and Budget, the Centers for Medicare & Medicaid Services will implement a new rule early next year aimed at retrieving hundreds of millions of dollars of provider overpayments dating back to 2010.

Providers also will remain on the hook for up to 10 years of unreported and uncollected overpayments under the rule, which is mandated by the Affordable Care Act and requires overpayments be returned two months after they've been identified, or the due date of applicable cost reports, whichever comes later.

At press time, OMB had 90 days to review the plan. It was not known whether the Department of Health & Human Services would extend the rule's implementation date after four years of false starts and procedural wrangling. Thorny legal arguments over how to identify Medicaid overpayments have been a big reason for many of the delays. 

As proposed, the rule would give Medicare Part A and B providers and suppliers 60 days to return overpayments once they are identified. The rule also includes a 10-year “look back” period on claims not identified by a provider. CMS has been roundly criticized for the move because it conflicts with shorter look back periods for Part C and D overpayments.

The CMS plan came to light in February 2012 after an Inspector General report disclosed the agency's failure to collect more than $300 million in overpayments dating back to 2010. 

Even now, entities are required under the False Claims Act to report known overpayments within 60 days or face penalties of up to $10,000 apiece and potential exclusion from federal healthcare programs such as Medicare and Medicaid.