Rules Proposed for Reporting Medicare Overpayments Proposed federal regulations require Medicare providers to report and return overpayments, including a written explanation of the reason for the overpayment, within 60 days of identifying the error. The regulations, issued by the Centers for Medicare and Medicaid Services (CMS) and published in the February 16 Federal Register, would implement ... Policy Analysis
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Policy Analysis  |   May 01, 2012
Rules Proposed for Reporting Medicare Overpayments
Author Notes
  • Mark Kander, director of health care regulatory analysis, can be reached at mkander@asha.org.
    Mark Kander, director of health care regulatory analysis, can be reached at mkander@asha.org.×
Article Information
Regulatory, Legislative & Advocacy / Policy Analysis
Policy Analysis   |   May 01, 2012
Rules Proposed for Reporting Medicare Overpayments
The ASHA Leader, May 2012, Vol. 17, 7. doi:10.1044/leader.PA1.17062012.7
The ASHA Leader, May 2012, Vol. 17, 7. doi:10.1044/leader.PA1.17062012.7
Proposed federal regulations require Medicare providers to report and return overpayments, including a written explanation of the reason for the overpayment, within 60 days of identifying the error.
The regulations, issued by the Centers for Medicare and Medicaid Services (CMS) and published in the February 16 Federal Register, would implement Section 6402(a) of the Affordable Care Act.
Definition
The proposed rule adopts the definition of overpayment contained in the law: “any funds that a person receives or retains under [Medicare] ... to which the person is not entitled.” A “person” means a provider or supplier of services (the legal entity to which payments are made). Examples include payment for noncovered services; payments greater than the allowable amount; and amounts paid by Medicare as the primary payer when, in fact, Medicare should have paid secondary to some other payment source.
Date of Identification
The date an overpayment is identified triggers the 60-day deadline for reporting. CMS proposes that a person has “identified” an overpayment when a provider has “actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment.”
CMS expects providers to investigate the reasons for overpayment. CMS provides examples of scenarios that would prompt a “reasonable investigation”—a provider receives an anonymous tip about a potential overpayment, the provider learns that services were provided by an unlicensed or excluded practitioner, a billing review reveals incorrect coding, or a provider has an unexplained significant increase in Medicare revenues.
In comments on the proposed rule, ASHA policy analysts raised concern that the proposal lacks sufficient detail in defining when an overpayment has been identified, and in determining if the provider’s investigation is adequate or reasonable.
10-Year Look-Back Period
CMS proposes that providers be required to report and return overpayments identified within 10 years of the date the overpayment was received. ASHA policy analysts believe that the 10-year period is an unreasonable constraint on business operations. Current Medicare rules allow review of claims dated within the previous three years.
Reporting Process
Until CMS develops a specific reporting form, providers can use existing forms created for voluntary overpayment reporting that are available from Medicare Administrative Contractors. The forms request a summary of how the error was discovered, a corrective action plan for preventing future error, and the timeframe and total amount of the refund.
Repayment
The proposed rule acknowledges that, because of the magnitude of an overpayment, additional time may be needed for repayment; although the overpayment must be reported within 60 days, an extended repayment schedule is available.
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May 2012
Volume 17, Issue 6