Q: Are the timeframes for investigating and repaying Medicare overpayments changing?

A: Not exactly, but the Centers for Medicare & Medicaid Services may be taking a sooner-rather-than-later approach.

While not yet finalized, CMS issued a proposed rule in December 2022 that would, in part, amend existing regulations for Medicare Parts A, B, C and D regarding the standard for an “identified overpayment” and remove the “reasonable diligence” standard. As it stands, providers have a reasonable diligence period to investigate and quantify any Medicare overpayments that might have been received within a 6-year lookback period. Without this, providers may have much less time to quantify and refund a Medicare overpayment. 

How much time, exactly? That remains to be seen. Existing law requires providers to report and return the overpayment by the later of: (1) the date which is 60 days after the date on which overpayment was identified; or (2) the date any corresponding cost report is due, if applicable.

CMS proposes to replace “reasonable diligence” with language that gives the terms “knowing” and “knowingly” the same meaning given those terms in the False Claims Act if a supplier has identified an overpayment if it has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment. Obviously, it will be challenging to determine or “identify” the extent of potential overpayments within the 60-day period and without clarification on what “identified” means in this regard. 

Your compliance program and self-monitoring efforts will be as important as ever to avoid overpayment scenarios before they happen. CMS does not have a basis for estimating the impact associated with this amendment. When finalized, provisions will take effect beginning Jan. 1, 2024.

Please send your payment-related questions to Eleisha Wilkes at [email protected].