CMS released a final rule (74 Fed. Reg. 47458) that limits recoupment of alleged overpayment and provides for the payment of interest to a provider/supplier whose overpayment determination has been reversed on appeal. The rule implements Section 935 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Providers have 41 days to file a redetermination request or 60 days to file a reconsideration request before recoupment may start. The rule could be significant as many providers/suppliers may be subject to Recovery Audit Contractor audits.

The rule sets forth specific timetables based on the level of the appeals process. At the first level of appeal, a provider/supplier must request redetermination from the Medicare contractor within 30 days of the claims determination to prevent recoupment. If it does not prevail at the first level of appeal, the provider/supplier must request reconsideration within 60 days to avoid recoupment during the second level of appeal. Providers/suppliers can forestall recoupment by not repaying alleged overpayments and appealing the disputed claims within the deadlines provided for the redetermination and reconsideration appeal levels. Interest does continue to accrue during those periods. In other words, should a provider/supplier lose at either level of appeal, and did not pay the overpayment, it will then owe the overpayment amount plus the accrued interest.

Significantly, if an overpayment determination is overturned at the third level of appeal (ALJ) or higher, CMS will be liable for interest that has accrued on the recouped overpayments. You can view the entire rule here.