Experience. Integrity. Advocacy.
Experience. Integrity. Advocacy.

CMS Finalizes Its 60-Day Overpayment Rule


Earlier this month, the Centers for Medicare and Medicaid Services finalized its 60-Day Overpayment Rule after several changes to the proposed guidelines.

Essentially, this rule clarifies the requirements for identifying and returning self-identified overpayments: an overpayment must be reported and returned by the later of: 60 days after the date on which the overpayment was identified; or the date any corresponding cost report is due, if applicable. Not doing so leaves providers and suppliers liable under several federal laws, including the False Claims Act and the Civil Monetary Penalties Law, and potentially excluded from federal healthcare programs.

The arguments against the proposed rule were not about the concept of refunding overpayments. Rather, the guidelines had murky language that seemed open to many interpretations. For instance, the term “identify” was unclear in the proposed rule and has been defined in the final rule as “when the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.”

Also, the “lookback period,” or the amount of time after an overpayment was received, was ten years in the proposed rule. In the final rule, providers are required to refund overpayments only if they are identified within six years of when the overpayment was received.

Finally, providers and suppliers have a variety of ways to report the overpayments after they are identified, including applicable claims adjustment, credit balance, or self reported refund.

This new rule does not change the guidelines for issuing overpayments identified by CMS.

What Can You Do?

To be compliant with the new guidelines, be sure you have a plan in place that demonstrates “reasonable diligence.” Tony Maida, a partner in the Health Industry Advisory Group at McDermott Will & Emery LLP told Nina Flanagan of Healthcare Dive, “I think as long as providers have a reasonable story to tell about their process — that’s ultimately what the government is looking for and whether the provider is moving forward in a diligent manner.”

Also, make sure you have a plan in place to process and return the overpayment within the 60-day time frame.

For more information, review the CMS Fact Sheet “Medicare Reporting and Returning of Self-Identified Overpayments.” Healthcare Dive also has an informative, historical account of how the 60-day overpayment final rule came to pass.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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