CMS Might Be Waiting on N.Y. Court Ruling In Delay of 60-Day Overpayment Final Rule

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By Eric Topor

March 26 — The Centers for Medicare & Medicaid Services might be waiting for the U.S. District Court for the Southern District of New York to rule on a pending motion concerning when a Medicaid overpayment is identified before issuing a final rule on the matter, according to Hooper Lundy & Bookman PC attorney Robert L. Roth.

Roth, speaking March 26 during a session of the American Health Lawyers Association's Institute on Medicare and Medicaid Payment Issues, referenced the year-long delay of a final rule implementing an Affordable Care Act provision (Section 6402(a)) that mandates the repayment of Medicare overpayments within 60 days. The CMS announced on Feb. 13 that the final rule is now scheduled for release on Feb. 16, 2016. 

Noting that the CMS cited the rule's “complexities” in the delay announcement, Roth, who's in Hooper Lundy's Washington office, said the pending motion to dismiss in United States ex rel. Kane v. HealthFirst, Inc. (S.D.N.Y., No. 11–cv-02325, intervenor complaint filed 6/27/14) may be “one of the reasons that the government is having trouble finalizing the rule” as perhaps it's waiting for the court to decide what it means to identify an overpayment.

Thomas S. Crane, an attorney with Mintz Levin Cohn Ferris Glovsky & Popeo PC in Boston, said he believed that the CMS was “playing fast and loose with the [Administrative Procedure Act] on this,” again referencing the delay for a 60-day overpayment final rule.

However, he added that the industry might be “better off without a final rule, given how bad it will probably be.”

Provider Self-Disclosures Proceeding

Providers are currently subject to the proposed rule for the 60-day overpayment provision, and many are utilizing the CMS's Self-Referral Disclosure Protocol (SRDP) to satisfy their overpayment obligations and limit liability.

Lisa Ohrin Wilson, senior technical adviser at the CMS, said that there have been 554 self-disclosure submissions through the SRDP so far, and there was a 33 percent increase in submissions from 2013 to 2014. In addition, Wilson said that 115 disclosures have been classified as “completed,” meaning the submissions have been either settled or withdrawn.

An additional 15 submissions are close to completion, Wilson said, with the disclosing parties aware of the settlement amount and terms.

Wilson added that SRDP settlement amounts aren't open to negotiation, and a refused settlement offer will usually be followed up with a repayment demand for the full amount owed.

Wilson said factors in the CMS's crafting of settlement agreements are how long it takes providers to identify their noncompliance and notify the CMS, harm to the program and the risk to beneficiaries.

Roth said it was a testament to the popularity of the program that providers are willing to go through the process.

SRDP Tips, Considerations 

Wilson said “our goal is transparency” in accepting and processing SRDP submissions. She said it's helpful if disclosing providers notify the CMS of any disclosures to other agencies. In addition, she said the CMS was on the lookout for “indicia of fraud” in SRDP submissions.

Wilson also said that SRDP submissions won't be disqualified for possible minor fraud indications; for instance when there isn't an obvious disregard for fair market value, “like a typo,” in a contract, then the CMS will handle the fair market value problem in the disclosure. However, she cautioned that “we will consult with our partners in law enforcement” in possible fraud situations.

Wilson said it's easier for the CMS to analyze an SRDP when the provider formats its submission in a “physician-by-physician structure.” She also said providers can't “hedge” their certification of noncompliance. She said a disclosing party must certify noncompliance and that money is owed to CMS before CMS will accept repayment.

Crane said that several considerations can drive whether a provider should disclose overpayments or noncompliance to the CMS through the SRDP, or to some other agency like the Department of Justice.

“If you think you have a whistle-blower, then all bets are off ” for disclosure to CMS, Crane said, adding, “that whistle-blower will drive your thinking.”

Crane also said that self-disclosure of overpayments doesn't necessarily trigger the False Claims Act's public disclosure bar, but self-disclosure might discourage a relator from filing a qui tam action. Wilson added that the automatic e-mail to a provider generated by the CMS after submission under the SRDP will toll the 60-day time period for overpayment.

Additionally, Crane said that the type of release a provider client requires can also drive which agency to make a disclosure to.

Crane said disclosure to the Department of Health and Human Services Office of Inspector General will provide a client with an administrative release from the OIG's exclusionary authority, while a disclosure to the DOJ can result in an FCA release.

Crane said an inevitable part of the self-disclosure process is that “once you start digging,” a provider ends up disclosing more than it originally intended.

To contact the reporter on this story: Eric Topor in Washington at

To contact the editor responsible for this story: Ward Pimley at


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