The Centers for Medicare & Medicaid Services (CMS) recently published a proposed rule, 89 FR 61596, that revives portions of a 2022 proposal to amend the Medicare Overpayment Rule. The 2024 proposed rule comes after consideration of the various public comments received relating to the 2022 proposed rule. Both proposals are in response to changes to the Affordable Care Act, Section 1128J(d) of the Social Security Act which requires a provider who has received an overpayment from Medicare to report and return the overpayment, as appropriate, and to report the reason for the overpayment within sixty days of identifying the overpayment (the Medicare Overpayment Rule).
The 2022 proposal sought to remove the existing “reasonable diligence” standard and replace it with the False Claims Act’s (FCA) knowledge standard. This new standard would define an overpayment as “identified” only when a person has actual knowledge of the overpayment or acts in reckless disregard or deliberate ignorance of it. This is a significant deviation from the current “reasonable diligence standard.” The 2022 rule was not finalized and is still under consideration by CMS.
The 2024 proposed rule builds on the 2022 proposal providing an extension of the sixty-day deadline and giving providers up to 180 days to investigate whether an overpayment has occurred. The sixty-day deadline may be extended if a provider has identified an overpayment but has not yet completed a good-faith investigation to determine the existence of the same or similar overpayments. To obtain the extension, the provider must actually complete the good faith investigation.