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  • CMS Sheds Light on '60-Day Rule' on Overpayment

    The US Centers for Medicare and Medicaid Services (CMS) issued a final rule that attempts to clarify just how providers are supposed to handle self-identified overpayments, and while some of the changes have been characterized as generally favorable to providers, the bottom line remains the same: don't ignore payments that seem too high.

    In a rule announced earlier in February, CMS established its expectations around the "60-day rule," a provision that addresses when an "identified" overpayment must be repaid before it becomes subject to federal False Claims Act (FCA) liability. The new provisions provide details on when the 60-day clock starts ticking, and how far back providers must review—the so-called "lookback" period—for overpayments they may have received.

    The rule adopted by CMS (.pdf) sets the lookback period at 6 years—a shorter time period than the 10-year window specified in the proposed rule. According to CMS, the 6 year lookback rule will begin on March 14, 2016, and will not be retroactive.

    As for the 60-day rule, CMS specified that the countdown does not begin until after a provider has identified an overpayment "through the exercise of reasonable diligence" and quantified the amount of the overpayment.

    The notion of what does and doesn't constitute "the exercise of reasonable diligence," and just how long that should take, is left somewhat open to interpretation. But in its commentary on the rule, CMS writes that "we adopt the standard of reasonable diligence and establish that this is demonstrated through the timely, good faith investigation of credible information, which is at most 6 months from receipt of the credible information, except in extraordinary circumstances."

    And simply ignoring a potential overpayment is definitely not a good option. CMS states that just as providers face FCA liability for not reporting and returning identified overpayments within the 60-day deadline, providers who fail to exercise "reasonable diligence" in the first place could wind up in a similar situation due to their "reckless disregard or deliberate ignorance."

    Providers who report a self-identified overpayment to either the Self-Referral Disclosure Protocol managed by CMS or the Self-Discloser Protocol managed by the Office of the Inspector General will be considered to be in compliance with the rule "as long as they are actively engaged in the respective protocol," according to a fact sheet from CMS.

    The final rule also lays out the ways providers and suppliers may return overpayments, through what CMS describes as "an array of familiar options from which providers and suppliers may select."

    APTA regulatory affairs staff will conduct an analysis of the rule and post a summary and other information in the coming weeks.

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