Beacon Health

The Centers for Medicare and Medicaid Services (CMS) has 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. This proposed rule was published in the Federal Register on February 16, 2012.

Coming as a result of the Affordable Care Act, this is one in a series of steps Medicare is taking to protect taxpayer dollars and efforts to prevent overpayments from occurring. These efforts include letting private auditors work on behalf of Medicare to identify wasteful spending before it happens by expanding the use of Recovery Audit Contractors, testing changes to outdated hospital billing systems to help prevent over-billing, and changing processes for approving payments for medical equipment with high error rates.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 service

There will be a specific timeframe by which overpayments must be reported and 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.

This proposed rule was announced on the same day that the announcement was made that the Health Care Fraud and Abuse Control Program had recovered $4.1 billion in 2011 from anti-fraud efforts, while the Department of Justice opened 1,110 new criminal health care fraud investigations involving 2,561 potential defendants.