On Feb. 16, 2012, CMS published proposed regulations implementing the sections of the Affordable Care Act (“ACA”) that require providers to disclose and return overpayments within 60 days of the date an overpayment is identified. The proposed regulations stake out an aggressive interpretation of the congressional mandate and ignore the real world complexities of billing, coding, and regulatory compliance. If these regulations are finalized, providers will regularly face potential civil penalties as well as federal False Claims Act (“FCA”) liability based on conduct that can only be appropriately characterized as prudent.

Any providers concerned about these proposals should seriously consider submitting comments on the proposed regulations to CMS by 5 p.m. on April 16, 2012.

The proposed regulations flow from the ACA provision that:

• Imposes a duty on a person who received an overpayment to report and return the overpayment to the “appropriate” agency or government contractor and to submit in writing the reason for the overpayment;
• Characterizes an overpayment retained by a person after the deadline as a “reverse” false claim under the False Claims Act; and
• Incorporates by reference the False Claims Act definitions of when a person “knows” that an overpayment has occurred—acting with either deliberate ignorance or in  reckless disregard of the truth or falsity.

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