Statute of limitations for Medicare overpayment recovery extended two years

The Centers for Medicare & Medicaid Services (CMS) now has five years instead of three to recover non-fraudulent Medicare overpayments. A provision of the recently signed fiscal cliff legislation extended the statute of limitations effective last Wednesday.

The longer time frame could result in the collection of $500 million from providers and others by some estimates.

The change reflects a recommendation made in May by the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services. In its “Obstacles to Collection of Millions in Medicare Overpayments” report, the OIG stated the three-year statute of limitations prevented CMS from collecting more than $332 million in overpayments identified in 154 audit reports examined as of Oct. 8, 2010.

Critics say CMS should be able to handle overpayment recovery within three years, and auditing the additional two years will put an unreasonable burden on providers.

In addition, the legislative process leading to this provision was not transparent and many lawmakers “might not even have known what they were voting on,” said Rick Pollack, executive vice president of advocacy and public policy at the American Hospital Association, in a Modern Healthcare report.