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The Centers for Medicare & Medicaid Services Delays Publication of Medicare & Medicaid Overpayment Final Rule

on Tuesday, 17 March 2015 in Health Law Alert: Erin E. Busch, Editor

Agency Cites Complexity and Disparate Opinions

The Centers for Medicare & Medicaid Services (CMS) bought itself a little time in early February delaying the publication of a final rule obligating Medicare and Medicaid providers to return and report overpayments under the programs within 60 days. Citing practical complexities and the wide range of nearly 400 public comments, the CMS decided to delay its interpretation of the provision, added by Section 6402(a) of the Affordable Care Act (Pub. L. 111-148), until February 2016.

The rule, originally proposed by the CMS in February 2012 (77 Fed. Reg. 9179), implements section 1128J(d) of the Social Security Act (42 U.S.C. § 1320a-7k), which requires providers, suppliers, Medicaid managed care organizations, and Medicare Advantage organizations to return overpayments to the Federal government, state governments, or contractors within 60 days of having knowledge of receipt of any overpayments. If a person knows of a potential overpayment and fails to act by the statutorily defined period, they risk Civil Monetary Penalty (CMP) and False Claims Act (FCA) liability, in addition to potential exclusion from Medicare and Medicaid.

Both industry commentators and the CMS have taken great pains to stress the importance that despite the one year delay, the 60-day window for overpayment reporting and repayment is still in effect since it is a statutory requirement created by the ACA. It is recommended that providers and suppliers maintain vigilance in detecting potential overpayment issues to avoid increasing its FCA, CMP and exclusion liability.

State Overpayment Reporting & Repayment Obligations

Providers are not only subject to Federal requirements related to overpayments, but must also comply with repayment obligations under the joint federal-state Medicaid program as states impose similar windows, some shorter than the 60-day period above, to return overpayments.

Medicaid overpayments must be reported within thirty (30) days in Nebraska (NEB. REV. STAT. § 68-940(2)) pushing providers to react more quickly upon discovery of a repayment obligation.

Iowa Medicaid overpayments are to be reported within sixty (60) days (441 I.A.C. §79.2(10)) in a report addressed to the Program Integrity Unit of the Iowa Medicaid Enterprise, requiring, among other information, how the error was discovered, the reason for the overpayment, a check in the amount of the overpayment, and a description of the action plan to ensure the root cause does not facilitate another overpayment (441 I.A.C. § 79.2(10)(c)). Similar to the ACA provision, Iowa requires actual knowledge of the overpayment.

Unlike Iowa, Nebraska does not define in either its Medicaid statutes or regulations the contents of a report accompanying a Medicaid repayment, although similar information is likely the best option. Informally, Nebraska Medicaid authorities have requested reports in a format similar to the federal OIG self-disclosure format.

Zachary J. Buxton

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