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OMB Finalizes Review of 60-Day Overpayment Rule

The Office of Management and Budget completed its review of the long-awaited final rule establishing a process for Medicare Part A and B providers and suppliers to report and return overpayments within 60 days (the “60-day rule”).  As a result, the final 60-day rule will likely be published soon.

The 60-day rule will implement Section 6402(d) of the Affordable Care Act (ACA), which created section 1128J(d) of the Social Security Act, requiring a person or entity who has received an overpayment to report and return the overpayment to the appropriate entity by the later of: (1) 60 days after the date on which the overpayment was “identified”; or (2) the date any corresponding cost report is due (if applicable).  Significantly, the ACA also made retaining an overpayment past the 60-day deadline an “obligation” under the False Claims Act (FCA) and therefore the basis of FCA liability. As a result, the contours of the final 60-day rule will have a substantial bearing on the scope of FCA liability for overpayments.

The road to reach the final 60-day rule has been long. The Centers for Medicare & Medicaid Services (CMS) first published a proposed 60-day rule nearly four years ago on February 16, 2012, which my colleague Karen Lovitch discussed in detail in a blog post. Last year, CMS announced a one-year delay in finalizing the closely watched 60-day rule to address “significant policy and operational issues” before finalizing a workable 60-day rule.

Once the final 60-day rule is published, we will provide further analysis and discussion of the rule. In particular, how CMS defines when an overpayment is “identified,” and thus the 60-day clock begins to tick, will significantly impact providers and suppliers.

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Brian P. Dunphy

Member / Co-Chair, Health Care Enforcement Defense Practice

Brian P. Dunphy is a member of the Health Care Enforcement & Investigations Group at Mintz. He defends clients facing government investigations and whistleblower complaints regarding alleged violations of the federal False Claims Act. Brian also handles commercial health care litigation.