Home Health & Hospice Week

Plus: Lookback period loosens up.

While it’s tempting to regard the new 60- day overpayment rule as a minor concern that does not affect you, don’t make that mistake.

“The 60 day rule will impact every healthcare provider in the country that participates in Medicare,” emphasizes former HHS official Tony Maida, now a partner with law firm McDermott Will & Emery.

Compliance with the 60-day rule, and avoidance of related penalties, relies on the definition of the term “identify.”

Up until now, “identify” has been a point of contention. Multiple court cases have hung on when the 60-day clock starts, based on when the overpayment is identified (see Eli’s HCW, Vol. XXI, No. 42).

Statutory ambiguity left providers wondering whether identification “meant the moment when, for example, there was a compliance hotline allegation, the moment when the allegation was verified to be a billing error, or the moment at which an overpayment was quantified,” note attorneys Torrey Young, Jana Kolarik Anderson, and Lawrence Vernaglia with law firm Foley Lardner, in analysis on its website.

“Some commenters stated that the proposed rule actually provides a disincentive to undertake compliance audits for fear of creating liability for identifying an overpayment,” the Centers for Medicare & Medicaid Services notes in the 60-day final rule published in the Feb. 12 Federal Register.

Clarification: “A person has identified an overpayment when the person has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment,” CMS finalizes.

Tip: If a provider does no audits or selfchecks, it hasn’t used reasonable diligence, CMS says in the rule. Just investigating based on hotline complaints or staff reports, for example, wouldn’t meet the reasonable diligence standard, the Foley attorneys offer.

Timeframe: While the 60-day clock usually starts with quantification of the overpayment, that only applies when the provider employs a “timely, good faith investigation of credible information, which is at most 6 months from receipt of the credible information, except in extraordinary circumstances,” CMS specifies. That timeframe replaces the vague “all deliberate speed” language used in the proposed rule.

If the provider fails to follow up on a credible tip, the 60-day clock will start “on the day the person received [that] credible information,” assuming an overpayment applies, CMS says.

Lookback Period Cut 40%

In its proposed rule, CMS pitched a 10-year lookback period for overpayments. Commenters had many complaints about the time period. It would “require a de facto 10-year record retention requirement and would be inconsistent with existing record retention requirements,” for one, they told CMS. “Second … maintaining paper and electronic medical and billing records for the proposed 10-year period as well as the difficulties with retrieving that information from legacy systems would be costly and time-consuming,” they added. Third, commenters complained about the logistical burden. For example, providers would have to “create very large sample sizes to cover a 10-year timeframe.”

CMS compromises by finalizing a six-year lookback period. That timeframe jibes with other federal and state laws, the agency says.