Medicare Compliance & Reimbursement

Question: We’ve heard that Centers for Medicare & Medicaid Services (CMS) says we should return any overpayments to federal health programs within 60 days. But with so many billing and compliance rules, we haven’t paid much attention to this one. What do we need to know about it?

South Carolina Subscriber

Answer: You are correct — CMS issued a rule in 2016 setting a 60-day limit on returning overpayments to federal agencies. (There was a proposal to change the language in 2023, but this was not adopted.) The important thing to remember is that while the rule might seem simple, it represents some big changes related to compliance — and a practice that fails to comply might face huge penalties.

The reasoning: Every practice occasionally handles overpayments, but the 60-day rule is designed to help practices identify systemic overpayment problems. Federal officials expect providers to sniff out coding or billing issues, and to move swiftly to address those issues. Any overpayments you discover should then be refunded within the 60-day window, and the underlying problem fixed to avoid future overpayments.

Dealing with any overpayments quickly is important because if federal agencies discover that you knew about overpayments and you failed to repay them promptly, you could be looking at penalties related to the False Claims Act or the Civil Monetary Penalties Law. In the worst-case scenario, your practice could be excluded from all federal healthcare programs.

It’s no fun to identify an overpayment, especially if it turns out to be part of a larger issue that requires work to fix. But once you do identify the issue, it’s in your interest to correct it, both to avoid penalties and because it’s the right thing to do.