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CMS Issues Proposed Rule on Reporting and Returning Medicare Overpayments

February 17, 2012—The Centers for Medicare and Medicaid Services (CMS) Feb. 16 issued a proposed rule, Reporting and Returning of Overpayments, that implements a provision in the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152) requiring Medicare overpayments to be reported and returned within 60 days of the date which the overpayment is identified, or the date a corresponding cost report is due.  “Overpayments” would include: payments for non-covered services; payments in excess of the allowed amount; errors and non-reimbursable expenditures in cost reports; duplicate payments; and Medicare payments when another payer has primary responsibility for the payment.

Based on the statutory requirements, CMS proposes to distinguish overpayments related to claims and those, such as graduate medical education payments, that are reconciled on the cost reports.  Claims-related overpayments would have to be returned within 60 days from the date that the overpayment is identified.  If the overpayment relates to something that would generally be reconciled on the cost report, then it would be returned either 60 days from when it is identified or on the date the cost report is due, whichever is later. CMS also proposed a 10-year look back period during which an overpayment could be identified and would have to be returned. The 10-year period would start on the date the overpayment was received.

The requirements will apply only to providers and suppliers under Medicare Parts A and B; at a later date there will be additional rulemaking that will include Medicaid managed care organizations and others. Comments are due April 16.


Ivy Baer, J.D., M.P.H.
Senior Director and Regulatory Counsel
Telephone: 202-828-0499


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806