Medicare Proposes New Steps to Recover Overpayments

February 16, 2012

On Tue Feb 14, CMS proposed that providers and suppliers must report and return self-identified overpayments either within 60 days of the incorrect payment being identified or on the date when a corresponding cost report is due, whichever is later.

The new announcement is one in a series of steps Medicare is taking to protect taxpayer dollars, including efforts to prevent overpayments from occurring. These efforts include letting private auditors working on behalf of Medicare catch wasteful spending before it happens, by expanding the use of Recovery Audit Contractors; testing changes to outdated hospital billing systems to help prevent over-billing; and changing processes for approving payments for medical equipment with high error rates.

A Medicare overpayment means any funds that a person receives or retains under Medicare to which the person is not entitled. Examples of overpayments in Medicare include:

• Duplicate submission of the same service or claim
• Payment to the incorrect payee
• Payment for excluded or medically-unnecessary services
• Payment for non-covered services

Before the Affordable Care Act, providers did not face an explicit deadline for returning taxpayers’ money. Thanks to the Affordable Care Act, there will be a specific timeframe by which overpayments must be reported returned. Any failure to report and return the overpayment within the applicable time frame could be a violation of the False Claims Act. Providers also could be subject to civil monetary penalties or excluded from participating in federal healthcare programs for failure to report and return an overpayment.

To read the proposed rule that would require providers and suppliers receiving funds under the Medicare program to report and return overpayments within specific timeframes, visit the Federal Register at http://s3.amazonaws.com/public-inspection.federalregister.gov/2012-03642.pdf (or, after Thu Feb 16, visit http://www.FederalRegister.gov/a/2012-03642).

The full text of this excerpted CMS press release (issued Tue Feb 14) can be found at http://www.CMS.gov/apps/media/press/release.asp?Counter=4266.

Source: CMS Provider Resource