On December 27, 2022, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule (Proposed Rule) which proposes certain policy and technical changes to Medicare regulations, including a notable change to the current standard under the “60-Day Rule” for identifying a Medicare overpayment. Specifically, CMS indicated that it is proposing to (i) “adopt by reference” the federal False Claims Act’s (FCA) definitions of “knowing” and “knowingly” as governing when an overpayment is identified, and (ii) eliminate the “reasonable diligence” standard that has been in place, but subject to challenges, for a number of years.
The 60-Day Rule was established by the Affordable Care Act, and it requires a health care provider that receives an overpayment to report and return the overpayment by the later of (i) 60 days after the provider identifies the overpayment or (ii) the date any corresponding cost report is due. The failure to report and return an overpayment within the 60-Day Rule’s time frame establishes liability under the FCA. This threat of a “reverse false claim” arising from a retained overpayment subjects providers to significant potential liability under the FCA, including treble damages and civil penalties. Accordingly, the 60-Day Rule poses a significant obligation for all providers who receive Medicare or Medicaid payments, and the issue of when an overpayment is “identified” is crucial to maintaining compliance. However, that term was not defined in...
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