CMS Delays Publishing Final Rule On Repaying Provider Overpayments

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By James Swann

Feb. 13 — The Centers for Medicare & Medicaid Services announced a one-year delay in the publication of a final rule that will require providers to repay Medicare overpayments within 60 days of discovering them.

The delay is in a notice released Feb. 13. The CMS cited “the complexity of the rule and the scope of comments” as its reasons for delaying publication of the final rule until Feb. 16, 2016, according to the notice (CMS-6037-RCN, RIN 0938-AQ58), which was published in the Feb. 17 Federal Register (80 Fed. Reg. 8,247).

Kirk Ogrosky, a partner with Arnold & Porter LLP in Washington, told Bloomberg BNA the delay reflects “a need for all agencies to stake out ground on who is responsible for various processes and procedures.”

“All stakeholders should be satisfied that CMS is listening to comments and not rushing this process,” Ogrosky said.

The CMS notice makes clear that even without a final rule, providers still face penalties and potential False Claims Act liability for failing to return Medicare overpayments, Ogrosky said.

In addition to addressing how quickly providers and suppliers have to repay identified Medicare overpayments, the final rule would also establish a look-back period. The proposed rule included a 10-year look-back period, meaning that the CMS could review 10 years of claims for any additional overpayments on top of the original overpayment identified by the provider or supplier.

Publication Schedule

The final rule was originally scheduled to be published in February to fulfill a regulatory requirement that final rules be published within three years of the publication of a proposed rule or an interim final rule.

However, the CMS said extensions can be granted under certain circumstances.

The Department of Health and Human Services Office of Inspector General and the Department of Justice must collaborate on the final rule's development, the CMS said.

The 60-day repayment rule was originally proposed in February 2012.

The rule would implement Section 6402(a) of the Affordable Care Act, which amended Section 1128J(d) of the Social Security Act to require providers to repay an overpayment and “to notify the Secretary, State, intermediary, carrier or contractor to whom the overpayment was returned in writing of the reason for the overpayment,” all within 60 days of first identifying the overpayment.

Stakeholder Criticism

Brian Roark, an attorney with Bass Berry & Sims in Nashville, Tenn., told Bloomberg BNA the final rule delay wasn't surprising considering what he described as the “harsh criticism” directed at the proposed rule.

“In particular, requiring providers to report and return overpayments that occurred within the preceding 10 years exceeds CMS’s statutory authority and is inconsistent with the shorter look-back period for overpayments in the Part C and D programs,” Roark said.

Under the proposed rule, providers and suppliers could face penalties of $10,000 for each identified overpayment, as well as potential exclusion from Medicare.

The CMS published a final rule May 23, 2014 (79 Fed. Reg. 29,843) that limited the look-back period for Medicare Advantage and Medicare Part D plan overpayments to six years, McAnaney said, and the health-care industry assumed that six years would be the standard for Medicare fee-for-service as well, as opposed to the 10-year period contained in the 60-day proposed rule.

With the 60-day final rule delayed, there might be less certainty that the six-year look-back period will be the standard.

While acknowledging that he didn't know why the final rule was delayed, Kirk Nahra, an attorney with Wiley Rein in Washington, told Bloomberg BNA that it takes a long time to develop complicated rules. “I don’t think it is a particularly big deal, as companies will still need to address overpayment issues and will always need to factor their evaluation into any overall assessment of how enforcement could play out,” Nahra said.

To contact the reporter on this story: James Swann in Washington at jswann1@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

The CMS notice is at http://www.gpo.gov/fdsys/pkg/FR-2015-02-17/pdf/2015-03072.pdf.