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Feb 16 2012

CMS Issues Proposed Regulations for the 60-Day Rule on Overpayment Refunds

CMS recently issued a proposed rule outlining requirements for refunding overpayments under the 60-Day Rule. The 60-Day Rule, enacted under the Affordable Care Act, requires hospitals and physicians receiving funds under the Medicare program to report and refund overpayments within 60 days from the date the overpayment is identified or the date the corresponding cost report is due.

Identification of Overpayments – Under the proposed rule, 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. Further, receipt of information concerning a potential overpayment creates an obligation to make a reasonable inquiry to determine whether an overpayment exists. Failure to make a reasonable inquiry, including failure to conduct the inquiry with all deliberate speed after obtaining the information, could result in knowingly retaining an overpayment.

The proposed rule contains the following non-exhaustive list of examples regarding when an overpayment has been identified:


  • A provider/supplier reviews billing or payment records and learns that it incorrectly coded certain services, resulting in increased reimbursement.

  • A provider/supplier learns that services were provided by an unlicensed or excluded individual on its behalf.

  • A provider/supplier performs an internal audit and discovers that overpayments exist.

  • A provider/supplier is informed by a government agency of an audit that discovered a potential overpayment and the provider or supplier fails to make a reasonable inquiry.

  • A provider/supplier experiences a significant increase in Medicare revenue with no apparent reason for the increase, but the provider/supplier fails to make a reasonable inquiry into whether an overpayment exists.


Ten-Year Look-Back – The proposed rule includes a ten-year look-back period for overpayments, i.e., overpayments must be reported and returned only if a person identifies the overpayment with ten years of the date the overpayment was received. The ten-year look-back matches the outer limit of the statute of limitations for the False Claims Act. CMS also proposes to amend the reopening rules to be consistent with the ten-year look-back for the 60-Day Rule.

The proposed rule is scheduled for publication in today’s Federal Register. Stakeholders have sixty days to submit comments to CMS.