On February 12, 2016, the Centers for Medicare & Medicaid Services (CMS) released a final rule (Final Rule) interpreting the application of Section 1128J(d) of the Social Security Act (the 60-Day Rule) to over payments received under Medicare Parts A and B. The Final Rule takes effect March 14, 2016, and provides much-needed clarity on the scope and requirements of the 60-Day Rule, which has loomed over health care providers and suppliers (collectively, Providers) since its enactment in 2010 as part of the Patient Protection and Affordable Care Act.

The 60-Day Rule requires Providers that have received an over payment to report and return the over payment by the later of (1) 60 days after the Provider identified the over payment or (2) the date any corresponding cost report is due. An “over payment” includes any Medicare or Medicaid funds received that the Provider is not entitled to retain after an applicable reconciliation. Failure to report an over payment within the 60-Day Rule’s timeframe subjects a Provider to liability under the federal False Claims Act (FCA). The substantial penalties under the FCA consequently heighten the importance of 60-Day Rule compliance.