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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. 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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About this Author

Brian P. Dunphy, Pharmaceutical Attorney, Mintz Levin, Anti-Kickback Lawyer,Health Care Enforcement & Investigations Health Care Compliance, Fraud & Abuse, and Regulatory Counseling Complex Commercial Litigation

Brian has handled a wide range of health care litigation matters, government investigations, and voluntary disclosures for an array of health care providers, life sciences companies, and private equity funds and their portfolio companies. He defends clients against allegations of false claims for payment to the government, in SEC investigations and enforcement proceedings, and represents clients in complex business disputes. Brian also counsels clients on health care regulatory issues, including telemedicine laws, compliance with the federal Physician Payments Sunshine Act and analogous...