Memo on Medicare's 60-day repayment rule

To: MEDICAL GROUP MANAGEMENT ASSOCIATION 

From: POWERS LAW FIRM

Date: FEBRUARY 19, 2016

Re: CMS RULE CLARIFIES ACA’s 60 DAY REPAYMENT REQUIREMENT 

Medical group practices have long been accustomed to refunding Medicare payments in response to demand letters from Part B administrative contractors, and more recently from Medicare Recovery Audit Contractors. These demands typically resulted from claims reviews or audits, and the group’s refund exposure was generally limited to amounts paid in connection with the disputed claims. Groups also voluntarily work credit balances for Medicare, other payors, and patients, and generally reconcile minor over and under payments through routine claims processing adjustments. In rare instances, groups have faced more serious claims under the False Claims Act, initiated either by the government or by qui tam “whistleblowers.”

Congress “upped the ante” for physicians and other Medicare providers and suppliers when it included in the Affordable Care Act what is generally referred to as the “60 day repayment rule.” That provision requires timely refund of any overpayment which has been identified by the provider. In some circumstances, failure to identify the overpayment or make the timely refund can become grounds for a False Claims Act charge. 1 CMS considers the ACA’s statutory requirement to be effective on its face, without implementing regulations. However, CMS published a proposed implementing rule in February of 2012 2 , and that rule, somewhat revised, was just published as a final regulation on February 12, 2016 (the “Final Rule”). 3

The Final Rule provides greater clarity to medical groups on how the repayment requirement will be interpreted and applied. It represents, in our opinion, an improvement over the earlier proposal, and is responsive to comments filed by MGMA and others at the proposed rule stage. At the same time, because the Final Rule is now out, the “rubber meets the road” in a more visible manner, and enforcement of the underlying ACA provision, whether by government or by whistleblowers, becomes more likely.

1 42 U.S.C. § 1320a-7k(d)(2).
2 See 77 Fed. Reg. 9172-9187 (Feb. 16, 2012).
3 See 81 Fed. Reg. 7654-7684 (Feb. 12, 2016). CMS issued a separate Final Rule on the 60 day repayment requirement for Medicare Parts C and D overpayments in 2014. See 79 Fed. Reg. 29844 (May 23, 2014). CMS has not issued rules with respect to Medicaid overpayments.

View the memo