The Centers for Medicare & Medicaid Services (“CMS”) proposed regulations governing the Patient Protection and Affordable Care Act’s (“Act”) requirement that overpayments to providers be repaid in sixty days. Specifically, the Act requires that a provider receiving an overpayment must report the overpayment and repay it by the later of 1) 60 days after the overpayment is identified or 2) the date that any corresponding cost report is due, if applicable. The latter applies only to overpayments that are generally reconciled on a cost report.

The proposed rule establishes a ten-year look-back period. Providers and suppliers must report and repay any overpayments identified within ten years from the date they receive the overpayment. This, of course, may pose problems for some providers and suppliers because documentation and claims data may no longer be available for overpayments received a decade ago.

CMS proposes to define “overpayment” as any funds that a person receives or retains under Medicare to which the person is not entitled. Examples include payments for non-covered services, payments in excess of allowable reimbursements, and error in cost reports. An overpayment will be considered “identified” if the provider or supplier has actual knowledge of the overpayment or recklessly disregards or remains deliberately ignorant of it. It is the provider’s best interest to self-audit, perform compliance checks, and conduct other research to determine whether overpayments exist.

Defining “identified” as described above requires affirmative, reasonably diligent checks. Suspecting an overpayment and failing to investigate may result in violating the regulations, as proposed, which may result in liability under the False Claims Act and Civil Monetary Penalties Law. If the proposed rules become final, a provider should regularly and conscientiously be on guard for overpayments and promptly report and repay them.