United States: CMS Issues Final Rule Regarding Reporting And Returning Medicare Overpayments

Last Updated: March 3 2016
Article by Margaret J. Davino

The Centers for Medicare and Medicaid Services (CMS) on February 11, 2016, issued its final rule requiring providers receiving payments from Medicare to report and return overpayments 60 days after an overpayment is identified, implementing the Affordable Care Act's requirement to return Medicare overpayments. Retention of Medicare monies after this time could expose the provider to liability under the False Claims Act. This final rule, which is effective March 14, 2016, contains several significant changes from the proposed rule.

After the proposed rule was published in 2012, questions arose as to when an overpayment is "identified" for purposes of starting the 60-day clock to report and return. There was a concerning case in the Southern District of New York in 2015, when the federal district court in Kane v. Healthfirst, Inc. et al. and US v Continuum Health Partners et al. ruled that a provider is required to report and return money to Medicare even if the precise amount has yet to be determined. This final rule instead states that a person has identified an overpayment when the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.

In the commentary to the regulations (not in the regulations themselves), CMS states that providers may conduct a timely investigation before the 60-day deadline is triggered. The commentary states that providers may have up to six months from receipt of credible information to do a good faith investigation (e.g., to quantify the amount of the overpayment), but warns that such investigations must be prioritized and may require the devotion of resources and time. Therefore, providers have up to a total of eight months (six months for timely investigation and 60 days for reporting and returning an overpayment) after first becoming aware of a possible overpayment to comply with the reporting and return period.

The law defines "overpayment" as any funds that a person has received or retained under Title XVIII (Medicare) to which the person, after applicable reconciliation, is not entitled. Examples given include:

  • Medicare payments for noncovered services
  • Medicare payments in excess of the allowable amount for an identified covered service
  • Errors and nonreimbursable expenditures in cost reports
  • Duplicate payments
  • Receipt of Medicare payment when another payer had the primary responsibility for payment
  • Overpayments that arise due to a violation of the Anti-Kickback Statute (compliance with the Anti-Kickback Statute is a condition of payment) or the Stark law (note the changes to the Stark regulations in late 2015)

Whereas the proposed rule stated that overpayments must be reported and returned if a person identifies the overpayment within 10 years of the date it was received, the final rule changes the lookback period to six years. Therefore, a provider who has identified a possible overpayment must (if the overpayment is not time limited because tied to a specific claim or claims) determine if the issue may have occurred over time, and if so, look back up to six years if appropriate. This six-year lookback period applies even if the overpayment is identified through a Recovery Audit Contractor (RAC) audit, which has a three-year timeframe. (RAC audit findings, as well as other Medicare contractor findings, are credible information of at least a potential overpayment, requiring a review of the audit findings and a lookback if the facts warrant).

CMS recognizes in the rule commentary that under the existing voluntary refund process, reports of overpayments are made using a form that each Medicare contractor makes available on its website. Since the final rule permits using the most applicable process set forth by the Medicare contractor to report and return overpayments, CMS has not included a specific list of data necessary to be reported with the repayment, as the information required may vary by contractor. CMS states that they will consider creating a standardized form in the future. As is currently the case, the final rule allows additional processes beyond the voluntary refund process. Providers may use the claims adjustment, credit balance, self-reported refund process or another process allowed by its Medicare contractor to return overpayments. Additionally, a refund form does not have to be completed for each account identified as an overpayment; one single refund form with an attachment that contains the required elements is acceptable.

There is no minimum threshold amount for the voluntary refund process. Although the CMS commentary recognizes the New York State Office of Medicaid Inspector General (OMIG) $5,000 reporting threshold, CMS states that even under the New York OMIG process, overpayments of any size must be returned. If a provider needs additional time to return the overpayment due to financial limitations, it can request payment over time using the Extended Repayment Schedule (ERS) as outlined in Publication 100-06, Chapter 4 of the Financial Management Manual.

CMS also recognizes that overpayments associated with cost reports should be reported through the existing cost report reconciliation process. Hospice and home health providers who may have received cap overpayments are not responsible to refund until their Medicare Administrative Carrier (MAC) calculates the final cap amount.

The 60 days is tolled if a provider has made a self-disclosure under the CMS Voluntary Self-Referral Disclosure Protocol or the OIG Self-Disclosure Protocol, while the provider is negotiating a potential settlement.

This rule applies to Medicare Parts A and B only. The rules for reporting and returning of overpayments in Medicare Parts C and D were published in separate rulemaking (79 FR 29843 published on May 23, 2014).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Margaret J. Davino
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions