On February 11, 2016, CMS released its much anticipated final overpayment reporting and refunding rule for Medicare Parts A and B (Final Rule). The Final Rule implements Section 6402(a) of the Affordable Care Act (ACA), which addresses the identification, reporting, and refunding of certain overpayments and is now codified at 42 U.S.C. § 1320a-7k(d) (Overpayment Law). Importantly, the Overpayment Law did not require implementing regulations to become effective and thus providers have been subject to the overpayment reporting and refunding requirements since the enactment of the ACA in 2010. The Final Rule comes almost six years after the passage of the ACA and four years after the Centers for Medicare & Medicaid Services (CMS) issued its proposed rule for reporting and refunding Medicare Parts A and B overpayments (Proposed Rule).

Overall, providers may find the Medicare Parts A and B overpayment Final Rule to be, in some ways, worth the wait. As reflected in the Final Rule, it appears that CMS responded to certain significant concerns voiced by the provider community in its final rulemaking. Since the issuance of the socalled “60-day rule” in the ACA, providers have been grappling with how to interpret the confines of the overpayment reporting and refunding requirements. In the Final Rule, CMS addresses key questions, such as when an overpayment is “identified,” thereby triggering the 60-day clock. As detailed in this Alert, CMS defines “identification” so that an overpayment is not identified until it has been quantified (unless the provider fails to conduct reasonable diligence). However, in the comments to the Final Rule, CMS also provides guidance regarding its expectations for how long an internal review should generally take in order to identify and quantify overpayments. Additionally, in the Final Rule, CMS adopts a six-year lookback period, as opposed to the ten-year period originally proposed by CMS in 2012. The contours of the six-year lookback period are also explored in greater detail in this Alert.