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CMS issues 60-day repayment rule for Medicare overpayments to EMS agencies

The long-awaited rule mandates that all health care providers receiving Medicare reimbursement return identified overpayments within 60-days or face Federal False Claims Act liability

CMS issued its Final Rule, now commonly referred to as the “60-Day Overpayment Rule,” on February 12, 2016. The rule clarifies requirements set forth in the Affordable Care Act of 2010 which included a provision that required all Medicare overpayments to be reported and returned within 60-days of an overpayment being identified [1].

The authors state that the final rule is intended to clarify several key elements of the original ACA language by [2]:

  1. Defining the term “identified” as it relates to an overpayment;
  2. Determining how far back a provider must look when determining an overpayment; and
  3. Clarifying the penalties for providers who do not comply with the rule.

Important quotes from the final 60-Day Overpayment Rule
Here are three especially important or memorable quotes form the Federal Register posting:

“We believe that undertaking no or minimal compliance activities to monitor the accuracy and appropriateness of a provider or supplier’s Medicare claims would expose a provider or supplier to liability under the identified standard articulated in this rule based on the failure to exercise reasonable diligence if the provider or supplier received an overpayment.”

“After review of all the issues identified by the commenters, we conclude that a six-year lookback period would appropriately address many of the concerns about burden and cost outlined previously.”

“Some commenters expressed concern that resources might be diverted from patient care in order to ensure compliance with this rule. We understand the concern of smaller providers and suppliers. However, providers and suppliers, large and small, have a duty to ensure their claims to Medicare are accurate and appropriate and to report and return overpayments they have received.”

Key takeaways: CMS 60-Day Overpayment Rule

Here are four key takeaways from the 60-Day Overpayment Rule that paramedic chiefs, EMS managers and personnel should know.

1. “Actual Knowledge” of an overpayment is not required for the rule to apply.
The Rule defines “identification” of an overpayment to have occurred when a provider “has or should have, through the exercise of reasonable diligence, determined that an overpayment has occurred.”

2. As a practical matter, every EMS agency, large or small, must now have a compliance program.
CMS emphasizes that providers must use “reasonable diligence” through “proactive compliance activities” to identify overpayments. They state that otherwise providers would be incentivized to avoid acquiring actual knowledge of overpayment.

3. EMS agencies are required to “look back” six years to determine if they have received overpayments.
The proposed rule required that health care providers look back 10 years to determine the total amount of overpayments. The final rule provides some relief, albeit small, and states that providers must look back six years from the date an overpayment is identified in order to calculate the full amount of repayment to Medicare.

4. EMS agencies, as well as individuals, face liability under the False Claims Act for not complying with the rule.
In addition to FCA liability, providers face potential liability under the Civil Monetary Penalties Law as well as possible exclusion from federal health care programs for failure to report and return overpayments under the Rule.

Finally, as with any new federal health care law, we will discover the practical implications as the government begins enforcing the requirements. With that said, this Final Rule is the clearest directive to date from CMS that health care providers, including EMS agencies, must have in place effective compliance programs that allow them to timely identify and refund inappropriate payments.

Agencies should not delay reviewing their procedures both internally and with third party vendors to identify and repay routine overpayments. For large or complex overpayment issues, agencies may want to consider enlisting outside legal counsel to conduct investigations under attorney-client privilege which may involve advice on self-disclosure and other repayment options.

1. Codified at 42 U.S.C. §1395k(d)

2. The Federal Register. (2016, February). Medicare Program; Reporting and Returning of Overpayments. Retrieved from Fed. Reg. website

Kevin Fairlie is the managing member of Fairlie Law, LLC, where he specializes in representing fire and EMS agencies across the country. He is also the co-founder of EMS Compliance, LLC, which specializes in assisting EMS and fire agencies with compliance programs, cybersecurity issues and medical director solutions.

He has a Master of Healthcare Administration degree from the University of Missouri School of Medicine, a Juris Doctor from the University of Missouri School of Law and a B.S. in business administration from Union University. He is a member of the American Parkinson’s Disease Association, the American Health Lawyer’s Association and the Missouri Bar-Healthcare and Hospital Law Committee, and he volunteers for Volunteer Lawyers and Accountants for the Arts.