Final Rule on Medicare Reporting and Returning of Self-Identified Overpayments

Posted on 28. Mar, 2016 by Jana Gill in Regulatory

Written by Brooke Haycraft, CEMC, CFPC, CPC-H, CPC

The Centers for Medicare & Medicaid Services (CMS) announced mid-February its final rule that will necessitate Medicare Parts A and B health care providers and suppliers alike to report and return self identified overpayments. This Final Rule will be implemented under sections of the Affordable Care Act (ACA). Below lists a synopsis of the major provisions that are set to become effective March, 2016.

"Definition of “Identification”
The Final Rule specifies that an overpayment must be reported and returned by:

I. The date which is 60 days after the date in which the overpayment was identified

II. The date any corresponding cost report is due, if applicable

According to CMS, when does a person identify an overpayment? CMS states, ‘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 overpayment.’ Basically saying, when the Medicare provider receives a creditable notification of overpayment, the provider then has the 60-day allotment to research the potential overpayment and respond accordingly.

Lookback Period
Under this Final Rule, overpayments must be reported and returned only if personnel identifies the overpayment within six years of the date the overpayment was received.

Originally, CMS had recommended a ten-year lookback period to align with the limit of the False Claims Act (FCA) statute of limitations. Feedback from providers found this large lookback period as problematic and troublesome to provider’s record-keeping timelines and ultimately agreed upon a six-year period instead.

How to Report and Return Overpayments
This Final Rule states that providers and suppliers must use the following options that should be familiar to providers to report and/or refund overpayments—

• Claims adjustment
• Credit balance
• Self-reported refund
• Another appropriate process or system

To learn more regarding overpayments and final ruling, please click on the below link for a CMS fact sheet about Medicare Reporting and Returning of Self-Identified Overpayments—

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-02-11.html