Identifying overpayments within 60 days is critical because failure to report identified overpayments carries False Claims Act liability.
The Patient Protection and Affordable Care Act (ACA) "60-day rule" requires providers who submit claims to Medicare and Medicaid to report and return identified overpayments within 60 days, according to a Health Care Compliance Association (HCCA) webinar presented by Jean Acevedo of Acevedo Consulting Incorporated and Lester Perling of Nelsons Mullins Broad and Cassel. Acevedo and Perling discussed how to identify Medicare and Medicaid overpayments, in light of the 60-day rule.
Overpayments. An "identified" overpayment is an overpayment for which the provider knew or should have known about through the exercise of "reasonable diligence." Perling noted that providers can be held liable for identified overpayments that both were and were not caused by the provider—e.g. errors by CMS or a Medicare Administrative Contractor (MAC). Thus, whether the provider caused the overpayment or not, if the provider deliberately chooses not to investigate when made aware of potential overpayments, the provider can be held liable under the False Claims Act (FCA).
Perling noted that reasonable diligence occurs when a provider implements proactive activities to monitor potential overpayments and undertakes investigations in a timely manner in response to obtaining credible information of a potential overpayment. He explained that CMS considers "timely" to be, at most, six months from the receipt of credible information regarding a potential overpayment. CMS has also said that further inquiry is advisable when overpayments are identified. In such cases, reasonable diligence might require a provider to use statistical sampling to understand the quantity of overpayments. Notably, however, the 60-day clock does not begin to run until after the provider has the opportunity to conduct follow-up activities and quantify the full nature of the overpayment. Additionally, the 60-day rule applies to a six year lookback period—meaning providers have 60-days to return identified overpayments identified within six years after they were received.
Repayment. Providers have several choices as to how they repay CMS, including claims adjustment, credit balance, and the HHS Office of Inspector General’s (OIG’s) Self-Disclosure protocol. Perling cautioned that repayments should include an explanation of the statistical sampling methodology the provider used, if the quantification of the overpayment was done through extrapolation.
Examples. Acevedo provided a number of examples to help listeners understand different circumstances which might give rise to overpayments. Perling and Acevedo cautioned providers to remember that what constitutes an overpayment is very often a legal conclusion, which requires more in-depth analysis than a knee-jerk reaction. In other words, providers should be cautious in their overpayment determinations and engage in prudent and rigorous auditing. Additionally, Perling and Acevedo explained that providers should be careful when determining the amount of the overpayment. For example, the mere fact of an overpayment does not necessarily mean the provider was entitled to no reimbursement, but, instead, may only mean the provider was entitled to less reimbursement than received.
Attorneys: Lester Perling (Nelson Mullins Broad and Cassel).
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