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CMS proposed rule would force providers to report overpayments in 60 days

February 14, 2012
by Kevin Kolus
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The Centers for Medicare & Medicaid Services (CMS) released a proposed rule Tuesday suggesting providers and suppliers must report and return self-identified overpayments either within 60 days of the incorrect payment being identified, or on the date when a corresponding cost report is due—whichever is later.

The CMS announcement followed a separate Department of Health and Human Services report finding that the government had recovered nearly $4.1 billion in healthcare fraud cases during FY2011—the highest annual amount ever recovered.

“It is critical that we are wise stewards of taxpayers’ dollars,” CMS Acting Administrator Marilyn Tavenner said in a statement.

A Medicare overpayment includes any funds that a person receives or retains under Medicare to which the person is not entitled. Examples of overpayments under Medicare include duplicate submission of the same service or claim, payment for excluded or medically unnecessary services and payment for non-covered services.

CMS said that failure to report and return a Medicare overpayment within the noted timeframe could be a violation of the False Claims Act, which has recently been invoked in cases against long-term care facilities.

“Providers also could be subject to civil monetary penalties or excluded from participating in federal healthcare programs for failure to report and return an overpayment,” CMS said.

Approximately $4.1 billion that was stolen or otherwise improperly obtained from federal healthcare programs was recovered and returned in FY 2011. HHS attributes the record-setting recovery to provisions within healthcare reform that provide tools to fight fraud, such as enhanced screenings and enrollment requirements, increased data sharing across government, expanded overpayment recovery efforts and greater oversight of private insurance abuses.

Federal prosecutors filed criminal charges against a total of 1,430 defendants for healthcare fraud related crimes last year, according to HHS. This is the highest number of healthcare fraud defendants charged in a single year in the department’s history, and a total of 743 defendants were convicted for healthcare fraud-related crimes during the year.

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