Annals of Health Law
READY OR NOT
to run.207 Such an overpayment would potentially amount to a (reverse)
false claim and subject the provider to FCA penalties.208
In February 2012, CMS addressed several unanswered questions
concerning overpayment obligations (and in particular, the new sixty-day
rule) by proposing the rule implementing Section 6402 of PPACA209 (the
“Proposed Rule”) governing overpayment obligations.210 The Proposed
Rule offered much needed clarification and also granted some concessions
to providers; however, the fraud risks posed by the Proposed Rule remain
severe and CMS clearly seeks to incentivize diligence through these
Although the requirement to refund an overpayment already exists in
federal law, the Proposed Rule clarifies what constitutes “identification” of
an overpayment, as well as the details regarding when and how an
overpayment must be returned. The Proposed Rule does signify CMS’
acknowledgement that overpayments can be difficult to assess and, even
with diligent compliance oversight to identify improperly retained funds,
the internal investigation process (and particularly confirming and
207. Similarly, if, rather than earning an incentive payment, a provider met program
criteria requiring enumerated benchmark or performance scores in order to avoid a
reimbursement penalty, and the provider later discovered that the data upon which
reimbursements were based was inaccurate (and benchmarks were in fact not met), this too
would constitute a scenario giving rise to a reverse false claim if the sixty-day limit was not
satisfied. See Chananie, supra note 198, at 16-17.
208. In addition to linking potential penalties under the FCA to the retention of
overpayments, PPACA also amended the Civil Monetary Penalties Law to allow treble
damages and additional administrative fines to be imposed on persons who have knowledge
about an overpayment and fail to make a timely report and refund. Patient Protection and
Affordable Care Act, Pub. L. No. 111-148, § 6402 (2010) (adding new subsection a( 10) to
42 U.S. C. § 1320a-7k).
209. § 1128J(d).
210. Medicare Program: Reporting and Returning of Overpayments, 77 Fed. Reg. 9179
(proposed Feb. 16, 2012) [hereinafter OVERPAYMENT RULE] available at
http://www.gpo.gov/fdsys/pkg/FR-2012-02-16/pdf/2012-3642.pdf. The Proposed Rule only
applies to Medicare Part A and Part B providers and suppliers. However, the preamble
emphasizes that the other stakeholders identified in Section 6402 of PPACA may
nonetheless be subject to civil penalties and exclusion for violation of the statute. The sixty-day comment period ended April 16, 2012 and the Final Rule is pending as of the date of this
article. See id.
211. For a discussion of the Proposed Rule, see e.g., Paul W. Pitts & Debra A.
McCurdy, CMS Proposed Rule on Reporting and Returning of Medicare Overpayments
Under the ACA, HEALTH INDUSTRY WASHINGTON WATCH (Feb. 28, 2012), available at
developments/hhs-developments/cms-proposed-rule-on-reporting-and-returning-of-medicare-overpayments-under-the-aca/#more; Marcus C. Hewitt, CMS Issues Proposed Rule
on 60-Day Reporting/Repayment Obligation for Overpayments to Medicare Providers,
WILLIAMS MULLEN (Feb. 24, 2012), available at http://www.martindale.com/health-care-law/ article_Williams-Mullen_1454642.htm.