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Reporting and Returning Medicare Overpayments

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Johanna M. Novak
Foster Swift Health Care Law E-News
July 11, 2012

Although existing federal law requires medical providers to report and return Medicare overpayments, the Patient Protection and Affordable Care Act (the "Act") imposed a new requirement on the timing for doing so.  The Act requires providers and suppliers receiving funds under the Medicare program to report and return overpayments: (1) within 60 days of the date that the overpayment is identified, or (2) by the date in which any corresponding cost report is due, whichever is later.  This requirement has been codified at 42 U.S.C. ยง 1320a-7k(d).

Examples of overpayments that must be reported and returned within this timeframe could include the following:

  • Medicare payments for non-covered services;
  • Medicare payments in excess of the allowable amount for an identified covered service;
  • Errors and non-reimbursable expenditures in cost reports;
  • Duplicate payments; or
  • Receipt of Medicare payment when another payor had the primary responsibility for payment. 

A provider or supplier reporting an overpayment must also identify and report the reason for the overpayment.  Some examples of what may be reported as the reason for the overpayment include:

  • incorrect service date
  • duplicate payment
  • incorrect Current Procedural Terminology (CPT) code
  • insufficient documentation
  • lack of medical necessity

In February 2012, the Centers for Medicare and Medicaid Services issued proposed regulations that expanded upon the above reporting requirements.  Included was a look-back period related to the identification of overpayments.  Under the proposed rules, an overpayment must be reported and returned if it was identified within 10 years of the date that the overpayment was received.  This look-back rule, while not yet effective, has caused some concern among those providers and suppliers impacted by this law, particularly with respect to their document retention responsibilities.  It remains to be seen whether this look-back period will be included in the final regulations.

If you have questions about reporting an overpayment, please contact any member of the Foster Swift Health Care Practice Group at 517.371.8100.