The Centers for Medicare & Medicaid Services (“CMS”) released today the long awaited final rule clarifying the statutory requirement under the Affordable Care Act for providers and suppliers to report and return Medicare overpayments within 60 days (the “Overpayment Final Rule”).  The Rule only applies to Medicare Part A and Part B providers and suppliers and will be effective 30 days after publication, which will occur tomorrow.

Noteworthy provisions of the Overpayment Final Rule include:

  • Clarifying that a person has “identified” an overpayment when the person has or should have, through the exercise of “reasonable diligence,” determined that the person has received an overpayment and quantified the amount of the overpayment;
  • Establishing, in the preamble to the final regulations only, that “reasonable diligence” is demonstrated through the timely, good faith investigation of credible information, which is, at most, 6 months from the receipt of the credible information, except in extraordinary circumstances;
  • Starting the 60-day clock when either the reasonable diligence is completed or on the day the person received credible information of a potential overpayment if the person failed to conduct reasonable diligence and the person in fact received an overpayment;
  • Indirectly requiring all Medicare Part A and Part B providers and suppliers to have effective compliance programs (via an interpretation of “reasonable diligence” that includes both “proactive and reactive activities”);
  • Omitting Medicaid from the scope of any existing regulations;
  • Narrowing the lookback period during which identified overpayments must be reported and returned from 10 years to 6 years;
  • Tolling the deadline for returning overpayments when a provider or supplier files for an extended repayment plan; and
  • Revising the allowable reporting process to include an applicable claims adjustment, credit balance, self-reported refund, or other reporting process set forth by the applicable Medicare Contractor.