On February 16, 2012, the Secretary of Health and Human Services, Katherine Sebelius published a proposed new rule to implement Section 6402(a) of the Accountable Care Act that requires Medicare providers to report and repay government overpayments within the later of 60 days of being “identified” or of the date of submission of a required cost report. The term “identified” is not defined in the Act and is the critical trigger for commencing the running of the 60 day period and the exposure for False Claims and Civil Monetary Penalty liability.
HHS proposes to define “identify as the following:
§401.305 (a)(2), we propose that a person has identified an overpayment if the person has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment.
HHS believes that the definition it proposes “gives providers and suppliers an incentive to exercise reasonable diligence to determine whether an overpayment exists.” In other words, a provider must act on any constellation of facts known to it that might raise a reasonable suspicion that there has been an overpayment. If hotline information is provided or information comes to the fore in a self audit, an obligation kicks in to follow the lead and to investigate whether there has been in fact an overpayment. HHS also has set a time period for a “look back” by the government for 10 years. That is an very long statute of limitations and presents another level of leverage for the government in negotiating with a provider or supplier.
The rule also contains specific procedures for reporting various types of overpayment i.e. unintentional, fraud, etc. and specifies the particular protocols to be used in reporting. Further, it requires more specific and exhaustive information to be filed in order for CMS to understand and track the overpayment.
The rule provides that if a provider or supplier needs additional time due to financial constraints, the provider or supplier must use the existing Extended Repayment Schedule (ERS)1 process that is outlined in Publication 100-06,Chapter 4 of the Financial Management Manual. If a physician or a supplier makes a disclosure under the Physician Self Referral Disclosure Protocol (SRDP), the 60 day time frame for repayment is suspended, while things are worked out.
The SRDP is available on the CMS website at
In the event of the discovery of a fraud, the OIG SDP is available on the OIG
Given the potential exposure and the risks associated with overpayment issues it would be a good idea for physician practices and Medicare suppliers to undertake all self audits or investigations through the oversight of legal counsel so as to protect the confidentiality of the information and the assessment process concerning the information developed before final conclusions are formed and decisions are made with respect to the need to disclose an overpayment to the government.