60 Day Rule: Avoid reverse false claims liability
On February 12, 2016, CMS issued its final rule for what is commonly known as the “60 Day Rule.” The 60 Day Rule requires providers to report and refund any overpayment within 60 days of identification. In practice, a provider has eight months from its receipt of credible information that the provider has received an overpayment to investigate, report, and refund the overpayment to CMS. This includes six months to conduct its investigation to identify the overpayment and once the overpayment is identified (confirmed and quantified), the provider has an additional 60 days to report and refund the overpayment. Pursuant to the commentary accompanying the final 60 Day Rule, a Medicare contractor determination of overpayment is always considered to be credible information to the provider of receipt of an overpayment. This 60 day period is put on hold if a provider appeals an overpayment demand from a Medicare contractor during the entire appeals process. The definitions in the rule of certain terms are key to understanding a provider’s obligations under the 60 Day Rule:
Identification of an overpayment does not occur until there has been, or should have been, a determination through reasonable diligence: (a) that an overpayment was received; and (b) the amount of any such overpayment is also quantified.
Reasonable diligence includes both proactive compliance activities and investigations conducted in response to obtaining credible information.
8 months from receipt of credible information to report and refund overpayment: From date of receiving credible information, a provider has six months to conduct an investigation and identify overpayment; once overpayment is identified (confirmed and quantified) the provider has 60 days to report and refund the overpayment to CMS.
In addition to receipts of credible information from CMS contractors, credible information can arise from a multitude of other sources, for example a hotline complaint, review of billing records or discovery of an overpayment during an internal audit. In addition to being provided with credible information from a third party, providers are also required to conduct proactive internal compliance activities in good faith to monitor for the receipt of overpayments. Providers are required to keep documents for six years and to identify any overpayments received within that six-year look back period.