CMS Issues Final “60 Day Rule” on Healthcare Overpayments

On Feb. 11, 2016, the Center for Medicare and Medicaid Services (“CMS”) issued its long-awaited final rule on the mandatory reporting and return of overpayments, commonly known as “the 60-day rule.”  Medicare and Medicaid providers, suppliers and managed care contractors are to report and return any overpayments within 60 days of their identification.  Retention of an identified overpayment beyond the 60-day period may subject the provider to significant liability under the False Claims Act, with civil penalties of up to three times the amount of the claim, plus fines of $5,500 to $11,000 for each claim.

In order to comply with the final rule, it is imperative for providers to understand when CMS deems a provider to have identified an overpayment and how to determine the 60-day deadline.  Under the new final rule, the clock starts when a provider has identified an overpayment, which is defined 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.  A person should have determined that the person received an overpayment and quantified the amount of the overpayment if the person fails to exercise reasonable diligence and the person in fact received an overpayment.”

CMS has stated that reasonable diligence includes taking proactive measures to monitor claims as well as conducting timely, good faith investigations in response to receipt of credible information that overpayments have been received.

CMS has clearly placed the burden on providers to affirmatively implement policies and procedures for identifying, reporting and refunding overpayments.  Providers would be well-advised to implement such policies and to establish internal and/or external audit procedures to ensure compliance with this final rule.

For additional information about the new final rule for the mandatory reporting and return of overpayments, or any area of healthcare law, please contact Indiana healthcare law attorney Ted Barron at or (812) 423-3183.

About the Author

Robert "Ted" Barron, Indiana Attorney
Ted Barron

Ted Barron is a member of KDDK’s healthcare law practice team. He counsels numerous health care clients including hospitals, joint ventures, surgery centers, physicians, physician groups, rehabilitation centers, and mental health centers on contractual matters, regulatory and compliance issues, various operational matters and employment issues.

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