CMS extends overpayment payback window to one year

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Federal regulators have relented and given state Medicaid programs a full year to collect and return overpayments made to providers. 

In its initial draft of the rule, the Centers for Medicare & Medicaid Services proposed forcing states to return the federal portion of any overpayments within 60 days.

Regulators were deluged with comments, which were collected until April 16. The final rule was published May 29 in the Federal Register.

The rule adds time for the recovery of overpayments resulting directly from fraud.

Providers and their advocates were up in arms about the proposed rule because it appears to add more layers of burden on them, such as having to conduct extra audits and inquiries to recover possible overpayments.

They also did not like the proposed 10-year look-back period, or the fact that authorities would be able to pursue legal remedies under the False Claims Act.

Providers also fear that administrative time and costs will be much more than regulators have suggested.

The rule (CMS-2292-F) comes under Section 6506 of the Patient Protection and Affordable Care Act.

By offering three options, regulators grant states more flexibility in collecting and returning overpayments:

• A standard schedule, under which states would entirely return any federally deserved overpayments within three years.

• A payment schedule that makes allowances for times of economic distress. Lower installment payments would be allowed at the beginning of a three-year payback period.

• The option of an additional three-year repayment window that states could request during periods of economic distress.