Attorney Sees Problems for Providers With 60-Day Overpayment Proposed Rule

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By James Swann  

A proposed rule from the Centers for Medicare & Medicaid Services that would require the return of Medicare overpayments within 60 days of their identification would dramatically increase administrative burdens for providers, an attorney said during an April 3 Bloomberg BNA webinar.

“If the proposed rule is finalized, it will create intense time pressure for providers and will significantly increase the operational--and potentially financial--burdens of overpayment disclosure,” Robert L. Roth, an attorney with Hooper, Lundy & Bookman PC in Washington, said during the webinar.

Potential penalties under the proposed rule include a $10,000 fine for each identified overpayment, as well as the possibility of Medicare exclusions.


“What do providers do when they can't quantify the overpayment amount within 60 days? The proposed rule is silent on this.”



--Robert L. Roth, Hooper, Lundy & Bookman PC

Roth said the proposed rule is inconsistent with providers' long-held expectations under current regulations. He said the rule's approach to enforcement is in line with the Department of Justice's more stringent litigation position in False Claims Act (FCA) cases.

“The proposed rule includes a 10-year look-back period [the time period for which providers are responsible for any identified overpayments], which CMS chose because it is the outer limit of the federal FCA statute of limitations,” Roth said. “The 10-year standard inappropriately links simple payment errors with the FCA liability standard, which is intended for intentional fraud.”

Created Under PPACA.

Section 6402 of the Patient Protection and Affordable Care Act requires providers to report and return Medicare Part A and Part B overpayments to CMS, as well as identify why the overpayment occurred, within 60 days of identification. Retention of an identified overpayment past the 60-day window would create a False Claims Act obligation.

CMS published the proposed 60-day overpayment rule in the Feb. 16 Federal Register, and comments are due April 16 (16 HFRA 135, 2/22/12).

Roth also said the proposed rule is silent on several topics, increasing uncertainty for providers.

“What do providers do when they can't quantify the overpayment amount within 60 days?” he asked. “The proposed rule is silent on this.”

The proposed rule also does not address potential retroactive enforcement issues created by the 10-year look-back period, Roth said.

Specifically, Roth said it would not be easy to collect documentation surrounding an old overpayment, as many providers have changed their data management systems over the years.

He said the proposed rule is also silent on whether the 60-day time frame applies to any overpayment identified prior to the enactment of PPACA.

Heavy Burdens.

Roth said he expects the proposed rule will generate many comments on the financial burden it imposes on providers.

“The language in the proposed rule says that, on average, it takes two-and-a-half hours to resolve an overpayment issue,” Roth said. “That seems completely unrealistic to me.”

He also said CMS's estimates of implementation costs do not appear to reflect the compliance reality providers would face, and that the proposed rule's cost estimates include only those of accountants and administrative staff, not those of attorneys and billing consultants.

By James Swann  

The proposed rule is at

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