As healthcare providers, staying compliant with federal regulations is paramount—not only to avoid penalties but also to uphold the integrity of your organization. A key area that health care providers often don’t know or don’t understand is the obligation to diligently investigate, report, and refund any overpayments received from federal programs, particularly Medicare. Proactive compliance measures as a part of a well-developed and maintained compliance program are integral to ensure that receipt and/or retention of overpayments does not occur; or if it does occur that a provider can quickly correct the issue and report and refund them.
Providers are statutorily prohibited from retaining an overpayment, and the Social Security Act mandates that providers who receive an overpayment must report and return it. Specifically, providers are required to notify the government in writing of the reason for the overpayment and to refund the amount within 60 days.
In 2025, the Centers for Medicare & Medicaid Services (CMS) issued a Final Rule that revises these obligations for Medicare Parts A, B, C, and D. The rule emphasizes a strict 60-day deadline for reporting and repaying overpayments from the date they are identified. Timely action is important as delays can lead to serious legal consequences, including the potential for significant financial sanctions.
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