This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

9179 

Vol. 77, No. 32 

Thursday, February 16, 2012 

DEPARTMENT OF THE INTERIOR 

National Indian Gaming Commission 

25 CFR Parts 524, 539, 577, 580, 581, 

582, 583, 584, and 585 

RIN 3141–AA47 

Appeal Proceedings Before the 

Commission 

AGENCY: National Indian Gaming 

Commission, Interior. 

ACTION: Proposed rule; correction. 

SUMMARY: This document corrects the 

preamble and regulatory text of the 

proposed rule published in the Federal 

Register on January 31, 2012, with 

respect to appeal proceedings before the 

National Indian Gaming Commission. 

FOR FURTHER INFORMATION CONTACT: 

Maria Getoff, (202) 632–7003. 

SUPPLEMENTARY INFORMATION: This 

document makes six technical 

corrections in the proposed rule to 

clarify that the definition of ‘‘summary 

proceeding’’ in proposed § 580.1 applies 

only to ordinance and management 

contract appeals and that the definition 

of ‘‘limited participant’’ applies only to 

appeals of disapprovals of gaming 

ordinances. Section 581.4 is corrected to 

reference all appeal actions listed in 

part 584. This notice corrects a 

typographical error in § 585.3(a) by 

replacing ‘‘§ 585.7 with ‘‘§ 585.6’’, and 

clarifies that service of the record will 

be accomplished after a notice of appeal 

in proposed § 585.6. Finally, this 

correction removes limited participant 

from § 585.7(b) so that the proposed rule 

is consistent with part 585 and the 

definition of limited participant. This 

notice makes technical corrections to 

the preamble so that the preamble is 

consistent with the proposed rule. 

Correction 

In the preamble to proposed rule FR 

Doc. 2012–1767, beginning on page 

4720 in the issue of January 31, 2012, 

make the following corrections in the 

SUPPLEMENTARY INFORMATION section: 

1. On page 4723 in the 1st column, 

second full paragraph remove ‘‘a notice 

of appeal and brief’’ and add in its place 

‘‘an appeal brief’’. 

2. On page 4724 in the 1st column 

remove the first full paragraph. 

3. On page 4724 in the 1st column, 

fifth full paragraph, remove ‘‘a notice of 

appeal and appeal brief’’ and add in its 

place ‘‘an appeal brief’’. 

In proposed rule FR Doc. 2012–1767, 

beginning on page 4720 in the issue of 

January 31, 2012, make the following 

corrections to the amendatory text: 

1. On page 4725 in the 1st column, in 

§ 580.1: 

a. In the definition of ‘‘limited 

participant’’ remove the word ‘‘either’’ 

between the words ‘‘in’’ and ‘‘an’’ and 

remove ‘‘or an appeal on written 

submissions under 585.5’’; and 

b. Revise the definition of ‘‘summary 

proceeding’’. 

The revision reads as follows: 

§ 580.1 What definitions apply? 

* * * * * 

Summary proceeding. Ordinance 

appeals and management contract and 

amendment appeals are summary 

proceedings. 

§ 581.4 [Corrected] 

2. On page 4726, in the 2nd column, 

in § 581.4, add ‘‘the Commission’s 

proposal to remove a certificate of selfregulation,’’ after the word, ‘‘contracts,’’. 

§ 585.3 [Corrected] 

3. On page 4730, in the 2nd column, 

in § 585.3(a), remove ‘‘§ 585.7’’ and add 

in its place ‘‘§ 585.6’’. 

§ 585.6 [Corrected] 

5. On page 4731, in the 1st column, 

in § 585.6, remove the following text, 

‘‘an appeal brief’’ and add in its place, 

‘‘a notice of appeal’’. 

§ 585.7 [Corrected] 

6. On page 4731, in the 1st column, 

in § 585.7(b), remove ‘‘, and any limited 

participant’’. 

Dated: February 10, 2012, in Washington, 

DC. 

Maria Getoff, 

Senior Attorney. 

[FR Doc. 2012–3559 Filed 2–15–12; 8:45 am] 

BILLING CODE 7565–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 401 and 405 

[CMS–6037–P] 

RIN 0938–AQ58 

Medicare Program; Reporting and 

Returning of Overpayments 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

require providers and suppliers 

receiving funds under the Medicare 

program to report and return 

overpayments by the later of the date 

which is 60 days after the date on which 

the overpayment was identified; or any 

corresponding cost report is due, if 

applicable. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on April 16, 2012. 

ADDRESSES: In commenting, please refer 

to file code CMS–6037–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address only: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–6037–P, P.O. Box 8013, Baltimore, 

MD 21244–8013. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address only: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–6037–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 


sroberts on DSK5SPTVN1PROD with PROPOSALS
9180 Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Proposed Rules 

your written comments before the close 

of the comment period to either of the 

following addresses: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244– 

1850. 

If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786– 

1066 in advance to schedule your 

arrival with one of our staff members. 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by following 

the instructions at the end of the 

‘‘Collection of Information 

Requirements’’ section in this 

document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Tiana Korley, (410) 786–9702. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http:// 

www.regulations.gov. Follow the search 

instructions on that Web site to view 

public comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 

8:30 a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

The Medicare program (title XVIII of 

the Social Security Act (the Act)) is the 

primary payer of health care for 

approximately 47 million enrolled 

beneficiaries. Providers and suppliers 

furnishing Medicare items and services 

must comply with the Medicare 

requirements set forth in the Act and in 

our regulations. The requirements are 

meant to ensure compliance with 

applicable statutes, promote the 

furnishing of high quality care, and to 

protect the Medicare Trust Funds 

against fraud and improper payments. 

As Medicare spending has grown, we 

have increased our efforts to reduce 

fraud, waste, and abuse in the Medicare 

program. 

As part of these efforts we have twice 

proposed—but did not finalize—rules 

that would have amended our 

regulations related to Medicare 

overpayments. (See the March 25, 1998 

(63 FR 14506) and January 25, 2002 (67 

FR 3662) proposed rules.) 

On March 23, 2010, the Patient 

Protection and Affordable Care Act 

(Pub. L. 111–148) was enacted. The 

Health Care Education Reconciliation 

Act of 2010 (Pub. L. 111–152) then 

amended certain provisions of Public 

Law 111–148. These public laws are 

collectively known as the Affordable 

Care Act. The Affordable Care Act 

makes a number of changes to the 

Medicare program that enhance our 

efforts to recover overpayments and 

combat fraud, waste and abuse in the 

Medicare program. 

Section 6402(a) of the Affordable Care 

Act established a new section 1128J(d) 

of the Act entitled ‘‘Reporting and 

Returning of Overpayments.’’ Section 

1128J(d)(1) of the Act requires a person 

who has received an overpayment to 

report and return the overpayment to 

the Secretary, the State, an 

intermediary, a carrier, or a contractor, 

as appropriate, at the correct address, 

and to notify the Secretary, State, 

intermediary, carrier or contractor to 

whom the overpayment was returned in 

writing of the reason for the 

overpayment. Section 1128J(d)(2) of the 

Act requires that an overpayment be 

reported and returned by the later of— 

(1) the date which is 60 days after the 

date on which the overpayment was 

identified; or (2) the date any 

corresponding cost report is due, if 

applicable. Section 1128J(d)(3) of the 

Act specifies that any overpayment 

retained by a person after the deadline 

for reporting and returning an 

overpayment is an obligation (as defined 

in 31 U.S.C. 3729(b)(3)) for purposes of 

31 U.S.C. 3729. 

Section 1128J(d)(4)(A) defines 

‘‘knowing’’ and ‘‘knowingly’’ as those 

terms are defined in 31 U.S.C. 3729(b); 

the terms ‘‘knowing’’ and ‘‘knowingly’’ 

‘‘mean that a person with respect to 

information—(i) has actual knowledge 

of the information; (ii) acts in deliberate 

ignorance of the truth or falsity of the 

information; or (iii) acts in reckless 

disregard of the truth or falsity of the 

information.’’ There need not be ‘‘proof 

of specific intent to defraud.’’ Section 

1128J(d)(4)(B) of the Act defines the 

term ‘‘overpayment’’ as any funds that 

a person receives or retains under title 

XVIII or XIX to which the person, after 

applicable reconciliation, is not entitled 

under such title. Finally, section 

1128J(d)(4)(C) of the Act defines the 

term ‘‘person’’ as a provider of services, 

supplier, Medicaid managed care 

organization (MCO) (as defined in 

section 1903(m)(1)(A) of the Act), 

Medicare Advantage organization 

(MAO) (as defined in section 1859(a)(1) 

of the Act) or PDP sponsor (PDP) (as 

defined in section 1860D–41(a)(13) of 

the Act) but the definition does not 

include a beneficiary. 

II. Provisions of the Proposed 

Regulation 

To implement section 6402(a) of the 

Affordable Care Act, we propose 

establishing a new subpart D in Part 401 

of our regulations. In this section, we 

outline the content of the proposed 

provisions of this new subpart D. 

A. Scope of Subpart (Proposed 

§ 401.301) 

In proposed § 401.301, we state that 

subpart D sets forth the policies and 

procedures for reporting and returning 

overpayments to the Medicare program 

for providers and suppliers of services 

under Parts A and B of title XVIII. At 

this time, we are proposing to 

implement the requirements set forth in 

section 1128J(d) of the Act only as they 

relate to Medicare Part A and Part B 

providers and suppliers. Other 

stakeholders, including, without 

limitation, MAOs, PDPs, and Medicaid 

MCOs will be addressed at a later date. 

Notwithstanding the foregoing, we 

remind all stakeholders that even 

without a final regulation they are 

subject to the statutory requirements 


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Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Proposed Rules 9181 

found in section 1128J(d) of the Act and 

could face potential False Claims Act 

liability, Civil Monetary Penalties Law 

liability, and exclusion from Federal 

health care programs for failure to report 

and return an overpayment. 

Additionally, providers and suppliers 

continue to be obliged to comply with 

our current procedures when we, or our 

contractors, determine an overpayment 

and issue a demand letter. 

B. Definitions (Proposed § 401.303) 

For purposes of this subpart only, we 

propose the following definitions: 

1. Overpayment 

Section 1128J(d) of the Act provides 

that an overpayment means ‘‘* * * any 

funds that a person receives or retains 

under title XVIII * * * to which the 

person, after applicable reconciliation, 

is not entitled under such title.’’ In 

§ 401.303, we propose to include this 

same definition in our proposed rule. 

Examples of overpayments under this 

proposed definition could include all of 

the following: 

• Medicare payments for noncovered 

services. 

• Medicare payments in excess of the 

allowable amount for an identified 

covered service. 

• Errors and nonreimbursable 

expenditures in cost reports. 

• Duplicate payments. 

• Receipt of Medicare payment when 

another payor had the primary 

responsibility for payment. 

In certain circumstances, Medicare 

makes estimated payments for services 

with the knowledge that a reconciliation 

of those payments to actual costs will be 

done when the actual costs or related 

information becomes available, usually 

at a later date. Interim payments made 

to a provider throughout the cost year 

are reconciled with covered and 

reimbursable costs at the time the cost 

report is due. The statutory and 

proposed regulatory definition of the 

term overpayment acknowledges this 

practice and provides that an 

overpayment does not exist until after 

an applicable reconciliation takes place. 

When a provider files a cost report, the 

provider is attesting to the accuracy of 

the information contained on the cost 

report and must maintain the 

appropriate documentation supporting 

the costs that are claimed on the cost 

report. We rely upon the information 

that providers submit through the cost 

report and we believe that providers 

must accurately report any 

overpayments at the time they submit 

any cost reports to CMS—whether it is 

an initial submission of a cost report or 

an amended one. 

2. Medicare Contractor 

We propose that the term ‘‘Medicare 

contractor’’ means a fiscal intermediary, 

carrier, durable medical equipment 

Medicare administrative contractor 

(DME MAC), or Part A/Part B Medicare 

administrative contractor. We believe 

that this proposed definition captures 

the different contractors that would be 

involved in receiving reports of 

overpayments as well as handling the 

return of overpayments, consistent with 

the statutory requirement. 

3. Person 

We propose that a person means a 

provider (as defined in § 400.202) or 

supplier (as defined in § 400.202). This 

definition does not include a 

beneficiary. Our proposal is consistent 

with the definition of a ‘‘person’’ in 

section 1128J(d) of the Act. 

C. Requirements for Reporting and 

Returning of Overpayments (Proposed 

§ 401.305) 

1. General 

Section 1128J of the Act provides that 

if a person has received an 

overpayment, the person shall ‘‘(i) 

report and return the overpayment to 

the Secretary * * * an intermediary, a 

carrier, or a contractor, as appropriate, 

at the correct address; and (ii) notify the 

Secretary * * * intermediary, carrier, or 

contractor to whom the overpayment 

was returned in writing of the reason for 

the overpayment.’’ 

We propose to implement these 

requirements by using the existing 

voluntary refund process, which will be 

renamed the ‘‘self-reported overpayment 

refund process.’’ This process is 

described in Publication 100–06, 

Chapter 4 of the Medicare Financial 

Management Manual. Under the 

existing voluntary refund process, 

providers and suppliers report 

overpayments using a form that each 

Medicare contractor makes available on 

its Web site. The form requires that 

providers and suppliers provide 

information to allow CMS to identify 

the affected claims, such as the health 

insurance claim number (HICN); the 

provider’s or supplier’s name, number 

and tax identification number; and the 

date of service. The voluntary refund 

process also requires providers and 

suppliers to summarize why the refund 

is being made including the following 

information: (1) How the error was 

discovered; (2) a description of the 

corrective action plan implemented to 

ensure the error does not occur again; 

(3) the reason for the refund; (4) whether 

the provider or supplier has a corporate 

integrity agreement (CIA) with the OIG 

or is under the OIG Self-Disclosure 

Protocol; (5) the timeframe and the total 

amount of refund for the period during 

which the problem existed that caused 

the refund; (6) Medicare claim control 

number, as appropriate; (7) Medicare 

National Provider Identification (NPI) 

number; (8) a refund in the amount of 

the overpayment; and (9) if a statistical 

sample was used to determine the 

overpayment amount, description of the 

statistically valid methodology used to 

determine the overpayment. We are 

proposing that providers and suppliers 

would be required to use the selfreported overpayment refund process 

set forth by the applicable Medicare 

contractor to report and return 

overpayments. 

Some clarification may be helpful in 

defining potential reasons for an 

overpayment since such information 

must be reported under section 1128J(d) 

of the Act. While we cannot provide an 

exhaustive list of all potential reasons 

for the overpayment as required to be 

reported at § 401.305(d), we can provide 

examples. Examples of what a person 

may report as the reason for the 

overpayment include the following: 

(1) Incorrect service date; (2) duplicate 

payment; (3) incorrect CPT code; (4) 

insufficient documentation; and (5) lack 

of medical necessity. We note that many 

of the forms currently available from our 

contractors provide a ‘‘check the box’’ 

format that allows providers and 

suppliers to easily identify the reason 

for the overpayment. For overpayments 

that are not listed on the form that is 

available from the Medicare contractor, 

there is an associated ‘‘other’’ box that 

allows providers and suppliers to clarify 

the reason for the overpayment. 

We make these proposals because we 

believe that the information requested 

under the existing voluntary refund 

process, such as the date of service and 

the HICN, is necessary to allow CMS to 

appropriately match claims information 

with the information that is reported by 

the provider or supplier and to 

understand the nature of the 

overpayment. Furthermore, we 

recognize that the reporting forms may 

differ among the different Medicare 

contractors and plan to develop a 

uniform reporting form that will enable 

all overpayments to be reported and 

returned in a consistent manner across 

all Medicare contractors. Until such 

uniform reporting form is made 

available, providers and suppliers 

should utilize the existing form 

available from the Web site of the 

applicable Medicare contractor as 

discussed earlier in this proposed rule. 


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2. Identified 

Section 1128J of the Act provides that 

the terms ‘knowing’ and ‘knowingly’ 

have the meaning given those terms in 

the False Claims Act (31 U.S.C. 

3729(b)(3)). The statutory text, however, 

does not use this phrase other than in 

the definitions. In § 401.305 (a)(2), we 

propose that 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. We believe Congress’ use 

of the term ‘‘knowing’’ in the ACA was 

intended to apply to determining when 

a provider or supplier has identified an 

overpayment. We believe defining 

‘‘identification’’ in this way gives 

providers and suppliers an incentive to 

exercise reasonable diligence to 

determine whether an overpayment 

exists. Without such a definition, some 

providers and suppliers might avoid 

performing activities to determine 

whether an overpayment exists, such as 

self-audits, compliance checks, and 

other additional research. 

3. Reporting and Returning Deadlines 

Section 1128J of the Act provides that 

an overpayment must be reported and 

returned by the later of—(i) the date 

which is 60 days after the date on which 

the overpayment was identified; or (ii) 

the date any corresponding cost report 

is due, if applicable. Proposed 

§ 401.305(b) contains an identical 

requirement. If an overpayment is 

claims related, the provider or supplier 

would be required to report and return 

the overpayment within 60 days of 

identification. However, for those 

providers that submit cost reports, if the 

overpayment is such that it would 

generally be reconciled on the cost 

report by the provider, the provider 

would be permitted to report and return 

the overpayment either 60 days from the 

identification of the overpayment or on 

the date the cost report is due, 

whichever is later. For example, issues 

involving upcoding must be reported 

and returned within 60 days of 

identification because the upcoded 

claims for payment are not submitted to 

Medicare in the form of cost reports. 

However, for an overpayment that 

would generally be reconciled on the 

cost report, such as overpayments 

related to graduate medical education 

payments, the provider must report and 

return the overpayment either 60 days 

after it has been identified or on the date 

the cost report is due, whichever is 

later. We believe that the qualifying 

language ‘‘if applicable’’ supports the 

proposed approach of only permitting 

providers to rely upon the cost report 

deadline when relevant to the 

determination of whether an actual 

overpayment exists. We make this 

clarification to avoid situations in 

which providers improperly delay 

reporting and returning a claims-related, 

identified overpayment until the date a 

cost report is due. We do not believe 

that Congress intended to create a 

loophole that would allow providers to 

delay reporting and returning an 

identified overpayment until a cost 

report is due if the overpayment would 

not ordinarily be reconciled on the cost 

report. 

The proposed 60-day requirement to 

report and return overpayments would 

run from the date on which the person 

had identified the overpayment. As 

previously discussed, an overpayment 

has been identified at the time that a 

person acts with actual knowledge of, in 

deliberate ignorance of, or with reckless 

disregard to the overpayment’s 

existence. In some cases, a provider or 

supplier may receive information 

concerning a potential overpayment that 

creates an obligation to make a 

reasonable inquiry to determine 

whether an overpayment exists. If the 

reasonable inquiry reveals an 

overpayment, the provider then has 60 

days to report and return the 

overpayment. On the other hand, failure 

to make a reasonable inquiry, including 

failure to conduct such inquiry with all 

deliberate speed after obtaining the 

information, could result in the provider 

knowingly retaining an overpayment 

because it acted in reckless disregard or 

deliberate ignorance of whether it 

received such an overpayment. For 

example, a provider that receives an 

anonymous compliance hotline 

telephone complaint about a potential 

overpayment has incurred an obligation 

to timely investigate that matter. If the 

provider diligently conducts the 

investigation, and reports and returns 

any resulting overpayments within the 

60-day reporting and repayment period, 

then the provider would have satisfied 

its obligations under the proposed rule. 

If, however, the provider fails to make 

any reasonable inquiry into the 

complaint, the provider may be found to 

have acted in reckless disregard or 

deliberate ignorance of any 

overpayment. 

In order to assist providers and 

suppliers with understanding when an 

overpayment has been identified, we 

provide the following examples: 

• A provider of services or supplier 

reviews billing or payment records and 

learns that it incorrectly coded certain 

services, resulting in increased 

reimbursement. 

• A provider of services or supplier 

learns that a patient death occurred 

prior to the service date on a claim that 

has been submitted for payment. 

• A provider of services or supplier 

learns that services were provided by an 

unlicensed or excluded individual on 

its behalf. 

• A provider of services or supplier 

performs an internal audit and discovers 

that overpayments exist. 

• A provider of services or 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. (When a government agency 

informs a provider or supplier of a 

potential overpayment, the provider or 

supplier has an obligation to accept the 

finding or make a reasonable inquiry. If 

the provider’s or supplier’s inquiry 

verifies the audit results, then it has 

identified an overpayment and, 

assuming there is no applicable cost 

report, has 60 days to report and return 

the overpayment. As noted previously, 

failure to make a reasonable inquiry, 

including failure to conduct such 

inquiry with all deliberate speed after 

obtaining the information, could result 

in the provider or supplier knowingly 

retaining an overpayment because it 

acted in reckless disregard or deliberate 

ignorance of whether it received such an 

overpayment). 

• A provider of services or supplier 

experiences a significant increase in 

Medicare revenue and there is no 

apparent reason—such as a new partner 

added to a group practice or a new focus 

on a particular area of medicine—for the 

increase. Nevertheless, the provider or 

supplier fails to make a reasonable 

inquiry into whether an overpayment 

exists. (When there is reason to suspect 

an overpayment, but a provider or 

supplier fails to make a reasonable 

inquiry into whether an overpayment 

exists, it may be found to have acted in 

reckless disregard or deliberate 

ignorance of any overpayment.) 

We emphasize that these examples are 

not an exhaustive list of situations 

where a person has identified an 

overpayment. 

We recognize that there are also 

intersections between the obligation to 

report and return overpayments under 

section 6402(a) of the Affordable Care 

Act and the existing procedures for 

providers and suppliers to self-disclose 

actual or potential violations of the 

physician self-referral statute to CMS 

through the Medicare Self-Referral 

Disclosure Protocol (SRDP). Providers 

and suppliers self-disclose violations 

under the SRDP with the intention of 

resolving overpayment liability 


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Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Proposed Rules 9183 

1The ‘‘Extended Repayment Schedule’’ was 

formerly referred to as the ‘‘Extended Repayment 

Plan.’’ 

exposure for the identified conduct. The 

SRDP is available on the CMS Web site 

at https://www.cms.gov/ 

PhysicianSelfReferral/Downloads/ 

6409_SRDP_Protocol.pdf. Under the 

SRDP, we may reduce the amount due 

and owing for violations of the 

physician self-referral statute. We have 

suspended the obligation to return 

overpayments under section 6402(a) of 

the Affordable Care Act when we 

acknowledge receipt of a disclosure 

made pursuant to the process 

established by the SRDP. Because the 

SRDP only suspends the running of the 

60-day deadline to return a physician 

self-referral-related overpayment, the 

provider or supplier would be obligated 

still to report the overpayment using the 

process that we are proposing in 

§ 401.305(a)(1). Specifically with regard 

to the SRDP, we seek comment on 

alternative approaches that would allow 

providers and suppliers to avoid making 

multiple reports of identified 

overpayments. 

We note that there are also 

intersections between the obligation to 

report and return an overpayment under 

section 6402(a) of the Affordable Care 

Act and the existing procedures for 

reporting self-discovered evidence of 

potential fraud to the OIG through the 

OIG Self-Disclosure Protocol (OIG SDP). 

The OIG SDP is available on the OIG 

Web site at http://oig.hhs.gov/ 

authorities/docs/selfdisclosure.pdf. 

Disclosures resolved through the OIG 

SDP result in a settlement with OIG that 

releases the OIG’s applicable Civil 

Monetary Penalties Law (CMPL) and 

permissive exclusion authorities in 

exchange for a negotiated monetary 

payment that includes the overpayment 

as well as certain penalties and 

assessments. In § 401.305(b), we 

propose to suspend the obligation to 

return overpayments under section 

6402(a) of the Affordable Care Act when 

OIG acknowledges receipt of a 

submission to the OIG SDP. The 

obligation to return overpayments 

consistent with the processes 

established in this proposed rule would 

be suspended until a settlement 

agreement is entered, or the provider or 

supplier withdraws or is removed from 

the OIG SDP. We also propose that once 

the provider or supplier notifies OIG of 

the identified overpayment through the 

OIG SDP, such notice would constitute 

a report for purposes of the reporting 

requirement set forth at § 401.305 of this 

proposed rule. However, we note that 

such reports must be made in 

accordance with the timeliness 

requirements set forth at § 401.305. 

Providers and suppliers should 

ensure that they are using the most 

appropriate process to report and return 

overpayments. In the October 30, 1998 

Federal Register, (63 FR 58400) the OIG 

published a notice stating— 

[the SDP] is intended to facilitate the 

resolution of only matters that, in the 

provider’s reasonable assessment, are 

potentially violative of Federal, criminal, 

civil or administrative laws. Matters 

exclusively involving overpayments or errors 

that do not suggest that violations of law 

have occurred should be brought directly to 

the attention of the entity (e.g. a contractor 

such as a carrier or an intermediary) that 

processes claims and issues payment on 

behalf of the Government agency responsible 

for the particular Federal health care program 

(e.g., [CMS] for matters involving Medicare). 

The program contractors are responsible for 

processing the refund and will review the 

circumstances surrounding the initial 

overpayment. If the contractor concludes that 

the overpayment raises concerns about the 

integrity of the provider, the matter may be 

referred to the OIG. Accordingly, the 

provider’s initial decision of where to refer 

a matter involving non-compliance with 

program requirements should be made 

carefully. 

We believe the distinctions drawn 

previously are relevant because the 

process of reporting and returning 

overpayments pursuant to section 1128J 

of the Act cannot resolve any potential 

False Claims Act or OIG administrative 

liability associated with the 

overpayment (even though returning an 

overpayment may, among other benefits, 

limit any FCA or administrative liability 

arising from the retention of an 

overpayment). Providers and suppliers 

should be aware that the contractors 

will scrutinize overpayments received 

through this process and may make 

referrals to OIG whenever the 

contractors believe circumstances 

warrant such a referral. 

We are aware that providers and 

suppliers may be concerned about 

scenarios in which they have identified 

an overpayment but because of the 

magnitude of the overpayment, need 

additional time to make repayment. 

Providers and suppliers may not delay 

the identification date in these 

situations to meet the deadline 

prescribed for reporting and returning 

the overpayment. Instead, if a provider 

or supplier needs additional time due to 

financial constraints, the provider or 

supplier must use the existing Extended 

Repayment Schedule (ERS) 1 process 

that is outlined in Publication 100–06, 

Chapter 4 of the Financial Management 

Manual. Because the statute is clear as 

to the deadline for reporting and 

returning overpayments, we believe that 

using the existing ERS process would be 

the best means of addressing potential 

financial limitations associated with the 

ability to repay the overpayment. We 

note that requests for ERS are not 

automatically granted and that 

providers and suppliers seeking to repay 

an identified overpayment using the 

ERS are required to submit significant 

documentation to allow CMS to verify 

that timely repayment of the 

overpayment represents a true financial 

hardship to the provider or supplier. 

The ERS is the only means by which 

extended repayment of an overpayment 

will be permitted. We propose to amend 

the definition of ‘‘hardship’’ at § 401.607 

to ensure that providers and suppliers 

can seek to utilize the ERS to return 

identified overpayments for purposes of 

section 1128J(d) of the Act when 

financial constraints suggest that use of 

the ERS is appropriate. 

Finally, we note the following with 

regard to overpayments that arise due to 

a violation of the anti-kickback statute 

(section 1128B(b)(1) and (2) of the Act). 

Compliance with the anti-kickback 

statute is a condition of payment. 

Claims that include items and services 

resulting from a violation of this law are 

not payable and constitute false or 

fraudulent claims for purposes of the 

False Claims Act. We recognize that, in 

many instances, a provider or supplier 

is not a party to, and is unaware of the 

existence of, an arrangement between 

third parties that causes the provider or 

supplier to submit claims that are the 

subject of a kickback. For example, a 

hospital may be unaware that a device 

manufacturer has paid a kickback to a 

physician on the hospital’s medical staff 

to induce the physician to implant the 

manufacturer’s device in procedures 

performed at the hospital. Moreover, 

even if a provider or supplier becomes 

aware of a potential third party payment 

arrangement, it would generally not be 

able to evaluate whether the payment 

was an illegal kickback or whether one 

or both parties had the requisite intent 

to violate the anti-kickback statute. 

For this reason, we believe that 

providers who are not a party to a 

kickback arrangement are unlikely in 

most instances to have ‘‘identified’’ the 

overpayment that has resulted from the 

kickback arrangement and would 

therefore have no duty to report it or, as 

discussed later in this section, to repay 

it. To the extent that a provider or 

supplier who is not a party to a kickback 

arrangement has sufficient knowledge of 

the arrangement to have identified the 

resulting overpayment, the provider or 

supplier must report the overpayment to 

CMS in accordance with section 

1128J(d) of the Act and corresponding 


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regulations. Although the government 

may always seek repayment of claims 

paid that do not satisfy a condition of 

payment, where a kickback arrangement 

exists, HHS’s enforcement efforts would 

most likely focus on holding 

accountable the perpetrators of that 

arrangement. Accordingly, we would 

refer the reported overpayment to OIG 

for appropriate action and would 

suspend the repayment obligation until 

the government has resolved the 

kickback matter (either by determining 

that no enforcement action is warranted 

or by obtaining a judgment, verdict, 

conviction, guilty plea, or settlement). 

Thus, if the provider has not identified 

the kickback or if it reported it when it 

did identify the kickback, our 

expectation is that only the parties to 

the kickback scheme would be required 

to repay the overpayment that was 

received by the innocent provider or 

supplier, except in the most 

extraordinary circumstances. 

4. Applicable Reconciliation 

As previously noted, the statutory and 

our proposed regulatory definition of an 

overpayment acknowledges that, in 

some instances, we make interim 

payments to a provider through the cost 

year and that the provider reconciles 

these payments with covered and 

reimbursable costs at the time the cost 

report is due. In § 401.305(c), we 

propose that ‘‘applicable reconciliation’’ 

will occur with the provider’s 

submission of a cost report. We believe 

that this would include an initial cost 

report submission or an amended cost 

report. We expect providers to 

accurately report and return 

overpayments at these points in time, 

because we rely upon the information 

that providers include on cost reports. 

We propose to recognize two 

exceptions to the general rule that the 

applicable reconciliation occurs with 

the provider’s submission of a cost 

report. The first exception is related to 

Supplemental Security Income (SSI) 

ratios used in the calculation of 

disproportionate share hospital (DSH) 

payment adjustment. We publish these 

ratios annually on our Web site and 

providers are expected to use the 

appropriate ratio when submitting the 

cost report for that cost year, unless the 

published ratios are not available at the 

time the cost report is due. In instances 

where the provider later receives more 

recent information regarding its SSI 

ratio, we propose that the provider 

would not be required to amend the cost 

report or calculate the change in 

reimbursement and return the potential 

overpayment until the final 

reconciliation of the provider’s cost 

report occurs. The second exception is 

related to the outlier reconciliation. We 

perform an outlier reconciliation at the 

time the cost report is settled if certain 

thresholds are exceeded. Prior to this 

reconciliation the actual amount of any 

overpayment is not known. In instances 

where the provider is aware it has 

exceeded the established thresholds and 

an outlier reconciliation will be 

performed, we propose that the provider 

would not be required to estimate the 

change in reimbursement and return the 

estimated overpayment until the final 

settlement of that cost report. 

5. Enforcement 

Section 1128J(d) of the Act provides 

that any overpayment retained by a 

person after the deadline for reporting 

and returning the overpayment is an 

obligation for purposes of 31 U.S.C. 

3729. Any person who ‘‘knowingly 

conceals or knowingly and improperly 

avoids or decreases an obligation to pay 

or transmit money or property to the 

Government’’ may be found liable under 

the False Claims Act. (See 31 U.S.C. 

3729 et seq.) Proposed § 401.305(f) 

contains a similar statement. 

Additionally, any person who ‘‘knows 

of an overpayment [as defined in section 

1128J(d)(4) of the Act] and does not 

report and return the overpayment in 

accordance with such section’’ may be 

found liable under the Civil Monetary 

Penalties Law (section 1128A(a)(10) of 

the Act) and accordingly could be 

excluded from participation in Federal 

health care programs (section 1128A of 

the Act). 

6. Lookback Period and Related Issues 

In § 401.305(g), we are proposing that 

overpayments must be reported and 

returned only if a person identifies the 

overpayment within 10 years of the date 

the overpayment was received. We 

selected 10 years because this is the 

outer limit of the False Claims Act 

statute of limitations. We believe that 

the proposed 10-year lookback period is 

appropriate for several reasons. First, we 

believe that providers and suppliers 

should have certainty after a reasonable 

period that they can close their books 

and not have ongoing liability 

associated with an overpayment. We 

also believe that the length of the 

lookback period is long enough to 

sufficiently further our interest in 

ensuring that overpayments are timely 

returned to the Medicare Trust Funds. 

We propose to amend the reopening 

rules at § 405.980(b) to provide that 

overpayments reported in accordance 

with § 401.305 may be reopened for a 

period of 10 years. We make this 

proposal in order to ensure that our 

reopening regulations are consistent 

with the lookback period that we are 

proposing. We seek comment on the 

proposed 10-year lookback period. In 

addition, we seek comment on our 

proposal to amend the reopening rules 

to provide for a 10-year reopening 

period. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 

60-day notice in the Federal Register 

and solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We are soliciting public comment on 

each of these issues for the following 

sections of this document that contain 

information collection requirements 

(ICRs): 

Proposed § 401.305 states that a 

provider or supplier must report and 

return an overpayment to the Secretary, 

the State, an intermediary, a carrier or 

a contractor to the correct address by the 

later of 60 days after the overpayment 

was identified or the date the 

corresponding cost report is due and 

notify the Secretary, the State, an 

intermediary, a carrier or a contractor in 

writing of the reason for the 

overpayment. The burden associated 

with this requirement would be the time 

and effort necessary to report and return 

the overpayment in the manner 

described at § 401.305. 

For purposes of this section only, we 

estimate that approximately 125,000 

providers and suppliers (or roughly 8.5 

percent of the total number of Medicare 

providers and suppliers) would report 

and return overpayments in a typical 

year under our proposed provisions. In 

addition, we project that each of these 

providers and suppliers would, on 

average, separately report and return 

approximately 3 to 5 overpayments. We 

also estimate that it would take a 

provider or supplier approximately 2.5 


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hours to complete the applicable 

reporting form and return an 

overpayment. Lastly, the two main 

categories of individuals believed to 

complete and submit the applicable 

reporting form include: (1) Accountants 

and auditors (external and in-house); 

and (2) miscellaneous in-house 

administrative personnel. Each provider 

and supplier’s individual operations is 

different and, as a result, it is not 

possible to break down the percentage 

of total affected providers of suppliers 

that would fall within the two 

aforementioned categories (for example, 

percentage of providers that would use 

an accountant). Consequently, in order 

to determine the burden cost, we utilize 

the average hourly wage of these two 

occupational categories based on the 

most recent wage data provided by the 

Bureau of Labor Statistics (BLS) data for 

May 2010. The mean hourly wage for 

the category of ‘‘accountants and 

auditors’’ is $33.15 (see http:// 

www.bls.gov/oes/current/ 

oes132011.htm) and the mean hourly 

wage for the category of ‘‘bookkeeping, 

accounting, and auditing clerks’’ is 

$16.99 (http://www.bls.gov/oes/current/ 

oes433031.htm). The average of these 

two figures, including fringe benefits 

and overhead, is $37.10. This, in turn, 

leads to an aggregate annual ICR burden 

cost, attributable to the impacted 

125,000 providers and suppliers for the 

range of 3 to 5 overpayments, of $34.78 

million and $57.97 million, 

respectively. Again these are rough 

estimates, as the number of 

overpayments reported and returned 

will vary per provider and supplier. 

Therefore, we solicit comment on our 

burden assumptions and associated 

calculations. 

TABLE 1—ANNUAL BURDEN REQUIREMENTS AND COSTS ASSOCIATED WITH REPORTING AND RETURNING OF

OVERPAYMENTS (§ 401.305) 

Number of impacted 

providers and 

suppliers 

Number of 

overpayments 

processed per provider and supplier 

Burden per 

overpayment reported 

and 

returned 

(hours) 

Total annual burden 

(hours) 

Hourly labor cost of 

reporting Total cost (in millions) 

125,000 3–5 2.5 937,500–1,562,500 $37.10 $34.78–$57.97 

If you comment on these information 

collection and recordkeeping 

requirements, please do either of the 

following: 

1. Submit your comments 

electronically as specified in the 

ADDRESSES section of this proposed rule; 

or 

2. Submit your comments to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Attention: CMS Desk Officer, 

[CMS–6037–P], Fax: (202) 395–5806; or 

Email: OIRA_submission@omb.eop.gov. 

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

V. Regulatory Impact Statement 

A. Statement of Need 

This proposed rule is necessary to 

implement section 6402(a) of the 

Affordable Care Act, which established 

a new section 1128J(d) of the Act 

entitled ‘‘Reporting and Returning of 

Overpayments.’’ Section 1128J(d)(1) of 

the Act requires a person who has 

received an overpayment to report and 

return the overpayment to the Secretary, 

the State, an intermediary, a carrier, or 

a contractor, as appropriate, at the 

correct address, and to notify the 

Secretary, State, intermediary, carrier or 

contractor to whom the overpayment 

was returned in writing of the reason for 

the overpayment. Section 1128J(d)(2) of 

the Act requires that an overpayment 

must be reported and returned by the 

later of—(1) the date which is 60 days 

after the date on which the overpayment 

was identified; or (2) the date any 

corresponding cost report is due, if 

applicable. Section 1128J(d)(3) of the 

Act specifies that any overpayment 

retained by a person after the deadline 

for reporting and returning an 

overpayment is an obligation (as defined 

in 31 U.S.C. 3729(b)(3)) for purposes of 

31 U.S.C. 3729. As a result, this 

proposed rule clarifies to providers and 

suppliers their legal obligations 

regarding the reporting and returning of 

overpayments. 

B. Overall Impact 

We have examined the impact of this 

proposed rule as required by Executive 

Order 12866 on Regulatory Planning 

and Review (September 1993), 

Executive Order 13563 on Improving 

Regulation and Regulatory Review 

(January 18, 2011), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Act, section 202 of the Unfunded 

Mandates Reform Act (UMRA) of 1995 

(Pub. L. 104–4), Executive Order 13132 

on Federalism (August 4, 1999), and the 

Congressional Review Act (5 U.S.C. 

804(2)). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects; distributive impacts and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. A regulation impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any one year). 

As discussed earlier in the preamble, 

even without a final regulation, all 

stakeholders are subject to the statutory 

requirements found in section 1128J(d) 

of the Act and could face potential False 

Claims Act liability, Civil Monetary 

Penalties Law liability, and exclusion 

from Federal health care programs for 

failure to report and return an 

overpayment. This proposed rule would 

impose a new deadline on the return of 

any overpayment that has been 

identified. We believe that this change 

would spur providers to be more 

diligent in reporting and returning 

overpayments. That will likely increase 

the overpayments that we collect, but 

we do not have a basis for estimating the 

magnitude of that change, and note the 

substantial uncertainty surrounding the 

magnitude of new collections. The 

burden costs for reporting and returning 

of overpayments, as discussed in section 

III. of this proposed rule, are estimated 

annually between $34.78 million to 

$57.97 million. As a result, this 


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proposed rule is not an economically 

significant rule under Executive Order 

12866. We solicit comment on the 

analysis and conclusions provided in 

the RIA. 

The RFA requires agencies to analyze 

options for regulatory relief for small 

businesses, if a rule has a significant 

impact on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other health care 

providers and suppliers are small 

entities, either by being nonprofit 

organizations or by meeting the Small 

Business Administration (SBA) 

definition of a small business and 

having revenues of less than $7 million 

to $34.5 million in any 1 year. (For 

details, see the Small Business 

Administration’s Table of Size 

Standards at http://www.sba.gov/sites/ 

default/files/Size_Standards_Table.pdf.) 

Individuals and States are not included 

in the definition of a small entity. We 

do not believe that the reporting and 

returning of overpayments identified by 

providers and suppliers of services will 

have a significant impact on a 

substantial number of small entities. 

The requirements of this rule add 

another program integrity tool, but do 

not replace existing overpayment 

recovery efforts. We are not preparing 

an analysis for the RFA because the 

Secretary has determined that this 

proposed rule will not have a significant 

impact on a substantial number of small 

entities. 

Section 1102(b) of the Act requires us 

to prepare a regulatory impact analysis 

if a rule may have a significant impact 

on the operations of a substantial 

number of small rural hospitals. This 

analysis must conform to the provisions 

of section 603 of the RFA. For purposed 

of section 1102(b) of the Act, we define 

a small rural hospital as a hospital 

located outside of the Metropolitan 

Statistical Area and has fewer than 100 

beds. The cost of the required reporting 

should be minimal for small rural 

hospitals because standard business 

practices dictate keeping accurate 

records concerning monies due and/or 

payable. We are not preparing an 

analysis for section 1102(b) of the Act 

because the Secretary has determined 

that this proposed rule will not have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies assess anticipated costs 

and benefits before issuing any rule 

whose mandates require spending in 

any 1 year by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $136 million. This 

proposed rule would have no effect on 

the annual expenditures of any State, 

local or tribal government, or the private 

sector. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement cost on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this proposed rule does not 

impose any costs on State or local 

governments, the requirements of 

Executive Order 13132 are not 

applicable. 

C. Alternatives Considered 

In light of the statutory mandate in 

section 6402(a) of the Affordable Care 

Act, we did not consider any 

alternatives to the implementation of 

this provision. We did, however, 

contemplate several operational 

mechanisms to alleviate the burden on 

the provider and supplier communities. 

First, we considered and elected to 

utilize the existing voluntary refund 

process. This would allow providers 

and suppliers to use a reporting 

mechanism with which they are already 

familiar. 

Second, we contemplated the 

appropriate length of time in which 

overpayments must be reported and 

returned. A time period of less than 10 

years was considered, as this would 

ease the burden on providers and 

suppliers. However, and as explained 

earlier, we selected 10 years because 

this is the outer limit of the False Claims 

Act statute of limitations. More 

importantly, we believe that the need to 

protect the Medicare Trust Fund was of 

primary importance. It is not possible 

for us to calculate the costs associated 

with a 10-year period versus, for 

instance, a 5-year period. We do, 

though, solicit comments on this issue, 

similar to our earlier solicitation of 

comments on the propriety of a 10-year 

period. 

Third, as with the overpayment 

reporting period, we contemplated a 

reopening timeframe of less than 10 

years. Yet we selected a 10-year 

timeframe in order to ensure that our 

reopening regulations are consistent 

with the 10-year lookback period. The 

costs of a shorter lookback period 

cannot be estimated, though we 

welcome comments on this issue. 

We solicit comment on the analysis 

provided in this section. 

D. Beneficiary Access 

We do not anticipate any impact on 

beneficiary access to care as a result of 

this proposed rule. As mentioned, the 

only burden associated with our 

proposed provisions involves the ICR 

aspects of reporting and returning 

overpayments. We do not believe that 

this burden—which, in any event, 

would only affect a small percentage of 

providers and suppliers—would cause a 

particular provider or supplier to reduce 

the services it furnishes to beneficiaries. 

List of Subjects 

42 CFR Part 401 

Claims, Freedom of information, 

Health facilities, Medicare, Privacy. 

42 CFR Part 405 

Administrative practice and 

procedure, Health facilities, Health 

professions, Kidney diseases, Medical 

devices, Medicare, Reporting and 

recordkeeping requirements, Rural 

areas, X-rays. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

Chapter IV as set forth below: 

PART 401—GENERAL 

ADMINISTRATIVE REQUIREMENTS 

1. The authority citation for part 401 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh). 

2. Part 401 is amended by adding 

subpart D to read as follows: 

Subpart D—Reporting and Returning 

of Overpayments 

Sec. 

401.301 Basis and scope. 

401.303 Definitions. 

401.305 Requirements for reporting and 

returning of overpayments. 

§ 401.301 Basis and scope. 

This subpart sets forth the policies 

and procedures for reporting and 

returning overpayments to the Medicare 

program for providers and suppliers of 

services under Parts A and B of title 

XVIII of the Act as required by section 

1128J of the Act. 

§ 401.303 Definitions. 

For purposes of this subpart— 

Medicare contractor means a fiscal 

intermediary, carrier, durable medical 

equipment Medicare administrative 

contractor (DME MAC), or Part A/Part B 

Medicare administrative contractor. 

Overpayment means any funds that a 

person has received or retained under 


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title XVIII of the Act to which the 

person, after applicable reconciliation, 

is not entitled under such title. 

Person means a provider (as defined 

in § 400.202) or a supplier (as defined in 

§ 400.202). 

§ 401.305 Requirements for reporting and 

returning of overpayments. 

(a) General. (1) If a person has 

identified that it has received an 

overpayment the person must report 

and return the overpayment in the form 

and manner set forth in this section. 

(2) 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 

existence of the overpayment. 

(b) Deadline for reporting and 

returning overpayments. (1) A person 

with an identified overpayment must 

report and return the overpayment by 

the later of either of the following: 

(i) The date which is 60 days after the 

date on which the overpayment was 

identified. 

(ii) The date any corresponding cost 

report is due, if applicable. 

(2) The deadline for returning 

overpayments will be suspended when 

either of the following occurs: 

(i) OIG acknowledges receipt of a 

submission to the OIG Self-Disclosure 

Protocol until such time as a settlement 

agreement is entered, the person 

withdraws from the OIG Self-Disclosure 

Protocol, or the person is removed from 

the OIG Self-Disclosure Protocol. 

(ii) CMS acknowledges receipt of a 

submission to the Self-Referral 

Disclosure Protocol until such time as a 

settlement agreement is entered, the 

person withdraws from the Self-Referral 

Disclosure Protocol, or the person is 

removed from the Self-Referral 

Disclosure Protocol. 

(c) Applicable reconciliation. (1) The 

applicable reconciliation occurs when a 

cost report is filed; and 

(2) In instances when the provider— 

(i) Receives more recent CMS 

information on the SSI ratio, the 

provider is not required to return any 

overpayment resulting from the updated 

information until the final 

reconciliation of the provider’s cost 

report occurs; or 

(ii) Knows that an outlier 

reconciliation will be performed, the 

provider is not required to estimate the 

change in reimbursement and return the 

estimated overpayment until the final 

reconciliation of that cost report. 

(d) Contents of report. An 

overpayment required to be reported 

under this section to a Medicare 

contractor must be made in writing and 

must contain all of the following: 

(1) Person’s name. 

(2) Person’s tax identification number. 

(3) How the error was discovered. 

(4) The reason for the overpayment. 

(5) The health insurance claim 

number, as appropriate. 

(6) Date of service. 

(7) Medicare claim control number, as 

appropriate. 

(8) Medicare National Provider 

Identification (NPI) number. 

(9) Description of the corrective action 

plan to ensure the error does not occur 

again. 

(10) Whether the person has a 

corporate integrity agreement with the 

OIG or is under the OIG Self-Disclosure 

Protocol. 

(11) The timeframe and the total 

amount of refund for the period during 

which the problem existed that caused 

the refund. 

(12) If a statistical sample was used to 

determine the overpayment amount, a 

description of the statistically valid 

methodology used to determine the 

overpayment. 

(13) A refund in the amount of the 

overpayment. A person may request an 

extended repayment schedule as that 

term is defined in § 401.603. 

(e) Reporting. (1) A person must use 

the self-reported overpayment refund 

process set forth by the applicable 

Medicare contractor to report and return 

overpayments except as provided in 

paragraph (e)(2) of this section. 

(2) A person satisfies the reporting 

obligations of this section by making a 

disclosure under the OIG’s SelfDisclosure Protocol resulting in a 

settlement agreement using the process 

described in the OIG Self-Disclosure 

Protocol. 

(f) Enforcement. Any overpayment 

retained by a person after the deadline 

for reporting and returning the 

overpayment specified in paragraph (b) 

of this section is an obligation for 

purposes of 31 U.S.C. 3729. 

(g) Lookback period. An overpayment 

must be reported and returned in 

accordance with § 401.305 only if a 

person identifies the overpayment 

within 10 years of the date the 

overpayment was received. 

Subpart F—Claims Collection and 

Compromise 

§ 401.607 [Amended] 

3. In § 401.607(c)(2)(i), the definition 

of ‘‘Hardship’’ is amended by removing 

the phrase ‘‘outstanding overpayments 

(principal and interest)’’ and adding in 

its place the phrase ‘‘outstanding 

overpayments (principal and interest 

and including overpayments reported in 

accordance with §§ 401.301 through 

401.305.)’’ 

PART 405—FEDERAL HEALTH 

INSURANCE FOR THE AGED AND 

DISABLED 

4. The authority for part 405 

continues to read as follows: 

Authority: Secs. 1102, 1862, and 1871 of 

the Social Security Act as amended (42 

U.S.C.1302, 1395y, and 1395hh). 

5. Section 405.980 is amended by 

adding paragraph (b)(6) to read as 

follows: 

§ 405.980 Reopenings of initial 

determinations, redeterminations, and 

reconsiderations, hearings and reviews. 

* * * * * 

(b) * * * 

(6) Within 10 years from the date of 

initial determination or redetermination 

if the overpayment is reported in 

accordance with § 401.305. 

* * * * * 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: August 18, 2011. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: February 10, 2012. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2012–3642 Filed 2–14–12; 8:45 am] 

BILLING CODE 4120–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[CS Docket No. 98–120; FCC 12–18] 

Carriage of Digital Television 

Broadcast Signals: Amendment to the 

Commission’s Rules 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule. 

SUMMARY: This Fourth FNPRM seeks 

comment on whether it would be in the 

public interest to extend the viewability 

rule and the HD carriage exemption, 

both of which are currently scheduled 

to sunset on June 12, 2012. First, we 

seek comment on whether to extend, in 

its current form, the ‘‘viewability’’ rule, 

which implements the statutory 

requirement that all cable subscribers, 

including those with analog equipment, 

be able to view must carry television 

signals. Second, given the apparent 

widespread reliance of small cable 


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