Final Rule on Returning Overpayments
On February 11, 2016, CMS published a final rule (CMS 6037-F) requiring providers and suppliers to return an overpayment within sixty days of identifying it. The consequences for not returning an overpayment within this time frame could include potential False Claims Act liability, Civil Monetary Penalties Law liability, and exclusion from federal health care programs.
The final rule also provided clarification on the meaning of “identification”, the lookback period, and how to report and return overpayments.
Identification is defined as “. . . a person has identified an overpayment 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 the overpayment”.
The lookback period is quantified as identification within six years of the date the overpayment was received.
If CMS or its contractors determine an overpayment exists and issue a demand letter, providers and suppliers are required to adhere to CMS procedures outlined in the demand letter. But that isn’t all. The reporting and returning of overpayments is described as “use an applicable claims adjustment, credit balance, self-reported refund, or another appropriate process to satisfy the obligation to report and return overpayments.”
The final rule can be found at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-02789.pdf