The CMS has finalized a controversial rule that will require providers to return Medicare overpayments.
The Affordable Care Act compels providers to return overpayments within 60 days of identifying them. Failing to report can result in liability under the False Claims Act. That means a provider could face either financial penalties or be excluded from billing the CMS programs.
The CMS estimates that the annual administrative costs for industry reporting and overpayment returns will fall between $120 million and $200 million.
The rule, first proposed in 2012, alarmed many healthcare organizations when the CMS floated the idea that providers would be liable for returning Medicare overpayments going back as far as 10 years. The American Hospital Association and the Federation of American Hospitals criticized the proposal at the time, saying the time frame was unreasonable.
In response to the objections, the CMS said the period will now be six years. Many providers and suppliers retain records and claims data for six to seven years based on various federal and state requirements.
“Thus, we believe our final rule does not create additional burden or cost on providers and suppliers in this regard,” according to the CMS rule.
Still, industry stakeholders were disappointed.
“We had requested a three-year look-back period, but six is better than 10,” said Dr. Wanda Filer, president of the American Academy of Family Physicians.
For years, the CMS has told Medicare Administrative Contractors that they could reopen claims only from the past 48 months for review of potentially improper payments.
An overpayment is identified if the provider or supplier has knowledge of the existence of the overpayment, or acts in reckless disregard or deliberate ignorance of the overpayment, according to the rule.