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Complying with the 60-Day Rule: Tips for Medical Practices


CMS guidance on the 60-day rule can be confusing. Here are some answers to common questions physicians and managers have regarding compliance.

Although the proposed rule came out Feb. 16, 2012, CMS announced this week that it’s not quite ready to finalize details on implementation of an Affordable Care Act provision that requires providers and others to report and return Medicare overpayments by the later of 60 days after the date on which the overpayment was identified (the 60-day rule).  Even without the clarification, providers will still be held to full compliance with the law, whether they understand it or not.

As discussed in my blog in 2013, CMS created a rule whereby providers who discover an overpayment, but do not refund it within 60 days, have made a “false claim.” This is true even if the claim is not known to be false at the time of submission.

For purposes of the rule, an “overpayment” includes any funds that a person receives or retains under the Medicare or Medicaid programs to which that person is not entitled. Unfortunately, even with this definition it is not always clear exactly when an overpayment has occurred.

Additionally, it is not always clear when the 60-day rule period starts to run, or even how far back the reach of the 60-day rule applies.  This lack of clarity has left providers (and their counsel) scrambling to take precautions until further guidance is offered.

Physicians are encouraged to routinely audit their billing records, and there is no doubt that this is an essential part of any compliant medical practice. Here are my answers to some commonly asked questions about the 60-day rule:

What should a practice do if it discovers a modifier was misused? 

First, the practice has to find out how widespread the error was, how many claims were impacted, and how far back the error goes.  The practice may even need to hire specialists to help. 

When does the 60-day period start to run? Is it from the first moment the error is identified? Is it when a final determination is made of the exact error and the amount of the overpayment? 

This is an issue which remains unclear.  The only safe course is to assume that overpayments must be refunded as quickly as possible and any delays should be well documented.

What if a practice discovers an “overpayment” from five years ago? Does a physician need to return those “overpayments” as well, or is there a time limit on the repayment obligations?

According to the statute, any overpayment which is discovered and not repaid within 60 days can trigger the False Claims Act (FCA) and, under the FCA’s statute of limitations, the government can go back 10 years from the date of the discovered overpayment.  So, if you do the math, a potential overpayment discovered from five years ago would extend the reach of the FCA more than 15 years.  That’s a pretty overwhelming scenario for any provider, particularly a smaller one without extensive compliance and auditing resources.

No matter how long the government takes to finalize the 60-day rule, providers need to live within the parameters of the existing rule. The government, aided by helpful whistleblowers, is fully enforcing the law, with whistleblower claims under the FCA now being reviewed by the criminal division of the Department of Justice, before being civilly reviewed. 

In fact, in 2014, there were 700 whistleblower filings and more than $6 billion dollars generated from FCA litigation alone. With an even bigger CMS enforcement budget in 2015, providers should anticipate investigation and enforcement actions under the FCA will continue to grow. 

There is not much a provider can do other than remain vigilant in their efforts to audit and refund overpayments in a prompt manner.  Talking with experienced legal counsel can be very important as well. Given the serious consequences of an FCA violation, there is no doubt that paying for advice in advance will be a far less expensive option than facing an FCA violation.  

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