“Thus, we believe our final rule does not create additional burden or cost on providers and suppliers in this regard”

On February 12, 2016, the Department of Health and Human Services published the final rule on the reporting and returning of self-identified Medicare overpayments. §6402(d) of the Affordable Care Act (“ACA”) requires healthcare providers and suppliers to return overpayment(s) within sixty (60) days of the identification. The final rule also reduced the proposed look back period from ten (10) to six (6) years.

In the final rule, an overpayment is “identified” if the healthcare provider/supplier has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment. Once an overpayment is identified, the healthcare provider or supplier must report the self-identified overpayment via the Self-Referral Disclosure Protocol managed by the Centers for Medicare & Medicaid (“CMS”) or the Self-Disclosure Protocol managed by the Office of Inspector General. The healthcare provider or supplier must use an applicable claims adjustment, credit balance, self-reported refund, or another appropriate process to return the overpayment. Failure to report and return overpayment can result in liability under the False Claims Act (“FCA”), which can include financial penalties or exclusion from the Medicare program. Additionally, in the final rule, CMS expects healthcare provider to implement a compliance program.

CMS originally proposed a ten (10) year look-back period, which aligned with the maximum window for bringing lawsuits under FCA. However, CMS determined that six (6) years reflects the more common statute of limitations and is not unduly burdensome on providers and suppliers.

Organizations should review and update their policies and procedures related to identification, reporting and returning overpayments to reflect the six (6) year look-back period. We also strongly encourage you to work with your general counsel when updating your policy and procedure related to identifying and returning overpayments. For healthcare providers and suppliers that have not implemented a compliance program, this is the time to implement a compliance program to ensure compliance with the final rule. DHHS Office of Inspector General has issued guidance on implementing a compliance program.