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The Centers for Medicare & Medicaid Services (“CMS”) has proposed a new rule that, among other changes, would amend the “identified overpayment” standard in the current regulations for Medicare to align with the False Claims Act’s (“FCA”) “knowingly” standard. The proposed rule plans to remove “the exercise of reasonable diligence” language from the relevant regulations and replace that language with the “knowingly” standard from the FCA.

The regulations at issue — 42 C.F.R. § 401.305(a)(2); 42 C.F.R. § 422.326(c) and 42. C.F.R. § 423.360(c) — are supposed to implement, in part, Section 6402(a) of the Affordable Care Act (“ACA”), codified at 42 U.S.C. § 1320a-7k. This section of the ACA explains that if an overpayment under the various Medicare programs has been identified and has not been reported and returned in a set amount of time, then an enforcement action can be brought under the FCA. This section also states that the terms “knowing” and “knowingly” have the same meaning as under the FCA.

The FCA defines these terms to mean that a person has actual knowledge of information, acts in deliberate ignorance of the truth or falsity of information, or acts in reckless disregard of the truth or falsity of information; the terms do not require a specific intent to defraud. 31 U.S.C. § 3729(b)(1).Continue Reading CMS Proposes Amending Identified Overpayment Rules to Align with FCA Knowledge Standard

A recent False Claims Act (“FCA”) settlement involving an allegedly overpaid Florida medical practice reaffirms the interplay between the 60-Day Overpayment Statute and the FCA, but also highlights the importance for all providers and suppliers to report and return overpayments, regardless of the source of federal funds.

According to the Department of Justice (“DOJ”), First Coast Cardiovascular Institute (“FCCI”) allowed credit balances from various federal health care programs to accrue despite multiple internal warnings that the balances should be paid back. DOJ alleged that FCCI’s failure to return those credit balances within 60 days violated the FCA. DOJ’s comments are notable, however, because the credit balances not only involved Medicare and Medicaid, but also TRICARE and the Department of Veterans Affairs, both of which are outside the scope of the 60-Day Overpayment Statute. DOJ and FCCI resolved the alleged $175,000 in unreturned overpayments for a $448,821.58 price.
Continue Reading DOJ Settles Second 60-Day Overpayment Case, Highlights Broader Reach of the FCA’s Reverse False Claims Provision

The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has published a final rule to codify the OIG’s expanded authority under the Affordable Care Act (ACA) to impose civil monetary penalties (CMPs) on providers and suppliers under a variety of additional scenarios. For example, for failure to timely report and return an identified overpayment, the final rule permits the OIG to impose a penalty of up to $10,000 for each item or service (rather than $10,000 per day as proposed).  Furthermore, the rule establishes up to $10,000 per day penalties—at the National Drug Code (NDC) product Identifier level—for drug manufacturers who fail to timely report and certify drug-pricing data.

Likewise, the final rule codifies the OIG’s expanded authority under the ACA to permit CMPs for conduct including:
Continue Reading OIG Finalizes Expanded CMP Authorities under the ACA

The Centers for Medicare & Medicaid Services (“CMS”) published the long-awaited final rule February 12, 2016, clarifying the specific procedures applicable to the statutory requirement under the Affordable Care Act (“ACA”) for providers and suppliers to report and return overpayments within 60 days. While the final rule eased some of the law’s more unforgiving aspects, its limited scope brought up new questions about the breadth of the law itself.

Despite concerns raised by a number of commenters in response to the proposed rule, CMS limited the scope of the final rule to Medicare Parts A and B only. In other words, the final rule clarifies the obligations of Medicare providers and suppliers to report and return overpayments originating under Medicare Parts A and B. Commenters expressed concern about this limitation and the lack of rationale for distinguishing Medicare Parts A and B from Medicare Parts C and D; they also voiced the need shared by all providers and suppliers for guidance on the overpayment requirements. In response, CMS reasoned that differences in how the Medicare programs are administered necessitated separate rulemakings. Interestingly, the agency did not indicate whether a separate rulemaking would be forthcoming, but instead directed providers and suppliers to their existing statutory obligations under the ACA, and a prior rulemaking applicable to reporting and returning overpayments in the Medicare Parts C and D context, for further guidance. In its response, CMS appears to assume, without stating expressly, that the law and the agency’s prior rulemaking apply to providers and suppliers receiving payments under Parts C and D.

Continue Reading So You’re an Overpaid Medicare Part C/D Provider or Supplier: Can You Keep the Change?

CMS has just announced that it has enhanced its financial accounting system to allow it to recover Medicare payments made to a provider or supplier that shares the same Tax Identification Number (TIN) with a provider or supplier with an outstanding Medicare overpayment across multiple states within a Medicare Administrative Contractor jurisdiction.  CMS implemented this …

CMS has published a notice inviting comments on a revised Medicare Self-Referral Disclosure Protocol (SRDP), which is a vehicle for providers and suppliers to voluntarily self-disclose actual or potential violations of the physician self-referral statute (known as the “Stark Act”).  Under the currently-approved process, a party must provide a financial analysis of overpayments arising from …

The Centers for Medicare & Medicaid Services (“CMS”) released today the long awaited final rule clarifying the statutory requirement under the Affordable Care Act for providers and suppliers to report and return Medicare overpayments within 60 days (the “Overpayment Final Rule”).  The Rule only applies to Medicare Part A and Part B providers and suppliers and will be effective 30 days after publication, which will occur tomorrow. Noteworthy provisions of the Overpayment Final Rule include:
Continue Reading CMS Eases 60-Day Overpayment Requirement in Final Rule While Raising New Questions

CMS is moving ahead on its much-anticipated final rule implementing Affordable Care Act (ACA) requirements on reporting and returning of Medicare overpayments.   Under the ACA, enrolled providers and suppliers (and certain other enrollees) receiving Medicare funds must report and return Medicare overpayments by the later of 60 days after the date on which the overpayment…

According to a recent OIG report, "Incorrect Place-of-Service Coding Resulted in Potential Medicare Overpayments Costing Millions,” physicians did not always correctly code the place of service on Part B claims.  This resulted in potential overpayments of approximately $33.4 million for services provided from January 2010 through September 2012. The OIG explains that physicians performed…

On April 20, 2015, the Office of the Inspector General of the Department of Health and Human Services (“OIG”) released educational guidance designed to assist governing boards of health care organizations (“Boards”) in their compliance oversight functions. This guidance, entitled “Practical Guidance for Health Care Governing Boards on Compliance Oversight” (the “Guidance”), was developed in a collaborative effort among the OIG, the Association of Healthcare Internal Auditors (“AHIA”), the American Health Lawyers Association (“AHLA”), and the Health Care Compliance Association (“HCCA”). The Guidance updates previous guidance issued by OIG and AHLA, and incorporates insight from the AHIA and HCCA to help assist the internal auditors, compliance officers, and lawyers that report to the Boards. The document addresses four key issues relating to a Board’s oversight and review of compliance program functions: (1) the roles and relationships among an organization’s audit, compliance, and legal departments; (2) the mechanisms and processes for reporting to the Board; (3) identifying and auditing regulatory risk; and (4) methods to encourage organization-wide accountability for achieving compliance goals and objectives.
Continue Reading OIG Partners with Industry Associations by Issuing Practical Guidance for Health Care Governing Boards on Compliance Oversight

CMS warns requirement to report/return overpayments is in effect even without regulations

The Centers for Medicare & Medicaid Services (CMS) needs more time to finalize its February 16, 2012 proposed rule on reporting and returning of Medicare overpayments, according to a CMS notice to be published on February 17, 2015. The 2012 rule would…

According to a new CMS report, fee-for-service (FFS) Medicare Recovery Auditors identified and corrected 1,532,249 claims for improper payments in FY 2013, representing $3.75 billion in improper payments. Of this amount, $3.65 billion was attributable to overpayments, compared to 102.4 million of the improper claims were underpayments that were repaid to providers and suppliers. According…

The Senate Aging Committee has released a staff report entitled “Improving Audits: How We Can Strengthen the Medicare Program for Future Generations.”  The report describes the burden audits can impose on providers, and raises concerns that CMS’s current efforts are “aimed more at identifying and recovering improper payments that have already occurred, rather…

On the heels of its proposed rule to expand its health program exclusion authority, the Office of Inspector General (OIG) of the Department of Health and Human Services has published a proposed rule that would amend the health care program civil monetary penalty (CMP) regulations. The rule would codify the OIG’s expanded statutory authority under the Affordable Care Act to impose CMPs on providers and suppliers and would allow for significant penalties in a variety of scenarios, some of which could extend beyond what is currently permitted.

Reed Smith attorneys have prepared a Client Alert summarizing and analyzing the OIG’s proposed rule, including the various scenarios under which CMPs could be issued under the proposed regulations, such as: failure to report and return an overpayment; failure to grant OIG timely access to records upon request; ordering or prescribing items or services while excluded from a federal health care program, as well as arranging or contracting with an individual or entity who meets this criteria; making false statements or omitting or misrepresenting material facts in an application, bid, or contract; and failing to submit or certify drug-pricing and product information in a timely manner. In addition, the alert covers the changes in technical language proposed by OIG to clarify and more clearly define the scope of CMP regulations.
Continue Reading OIG Proposed Rule Would Expand Civil Monetary Penalty Authority

Providers and suppliers have until April 16, 2012 to comment on the proposed rule to implement provisions of Section 6402(a) of the Affordable Care Act that require “persons” receiving Medicare and Medicaid funds to report and return overpayments no later than 60 days after the date on which the overpayment was identified or, if applicable,…