Source: https://www.federalregister.gov/documents/2012/02/16/2012-3642/medicare-program-reporting-and-returning-of-overpayments
Timestamp: 2019-10-17 03:12:50
Document Index: 302476799

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Federal Register :: Medicare Program; Reporting and Returning of Overpayments
A Proposed Rule by the Centers for Medicare & Medicaid Services on 02/16/2012
9179-9187 (9 pages)
A. Scope of Subpart (Proposed § 401.301)
B. Definitions (Proposed § 401.303)
C. Requirements for Reporting and Returning of Overpayments (Proposed § 401.305)
https://www.federalregister.gov/d/2012-3642 https://www.federalregister.gov/d/2012-3642
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.
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:
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.
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.
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.
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.
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 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.
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.
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.
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).
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.
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.
Table 1—Annual Burden Requirements and Costs Associated With Reporting and Returning of Overpayments (§ 401.305)
Number of overpayments processed per provider and supplier
Burden per overpayment reported and returned (hours)
125,000 3-5 2.5 937,500-1,562,500 $37.10 $34.78-$57.97
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)).
Requirements for reporting and returning of overpayments.
§ 401.301
§ 401.303
Person means a provider (as defined in § 400.202) or a supplier (as defined in § 400.202).
§ 401.305
(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.
(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.
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.)”
Authority: Secs. 1102, 1862, and 1871 of the Social Security Act as amended (42 U.S.C.1302, 1395y, and 1395hh).
(6) Within 10 years from the date of initial determination or redetermination if the overpayment is reported in accordance with § 401.305.