New Medicare/Medicaid Refunding Requirement: Report and Return Within 60 Days of “Identification”
By: DAVID M. GLASER & KATHERINE A. BURKHART
April 5, 2010
One of the major changes in the new health care reform law is a requirement that all overpayments of Medicare and Medicaid funds must be “reported and returned” within 60 days of the overpayment being “identified.” (For payments that are part of a cost report, the clock begins running on the date the cost report is due.)
Until now, the legal status of overpayments was somewhat unclear. There were laws that arguably required disclosure of an overpayment, but even those were uncertain. Now, any organization with overpaid Medicare or Medicaid funds must both report and return the overpayment with 60 days of identifying the overpayment. (Please note the “report” can be to the Medicare Administrative Contractor. The new law does NOT require that you use the Office of Inspector General (OIG) self-disclosure protocol.)
The new law features two key words: “overpayment” and “identified.” Many legal commentators suggest that under the new law hospitals and clinics must report and return an overpayment with 60 days of the first indication that an overpayment exists. We strongly disagree. We believe that until you have (1) absolutely concluded that there is an overpayment and (2) ascertained the amount of the overpayment, the overpayment has not been “identified.” As long as you move expeditiously toward quantifying the overpayment, the 60-day time period applies AFTER the size of the overpayment is determined. In other words, you still have time to review records, complete any necessary statistical sampling, and perform other tasks that will allow you to determine the extent of the overpayment.
The Department of Health and Human Services (HHS) may issue regulations that define the term “identified,” but in the meantime, our advice is that the 60-day time period does not being to run until the overpayment is calculated.
In addition, the key question of whether you have been “overpaid” still exists. If you have listened to past webinars, you have heard our legal argument that failure to satisfy Medicare’s documentation requirements or failure to satisfy a Medicare condition of participation typically does NOT create an overpayment.
To hear more about the new health care reform law and how it will affect hospitals and clinics, click here to purchase the CD for our webinar held on April 21, 2010.