The 60-day refund rule, also referred to as the 60-day overpayment rule, is a statutory provision of the Affordable Care Act requiring Medicare and Medicaid providers and suppliers to report and return reimbursements made in error (overpayments) within 60 days of identification of the overpayment or, if applicable, the date any corresponding cost report is due.
According to the Centers for Medicare and Medicaid Services (“CMS”), an overpayment is “identified” when the provider or supplier has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment. Providers should act quickly to reasonably investigate potential overpayments and conduct such investigations with deliberate speed to avoid potential liability.
Yes, the statutory requirement under the Affordable Care Act to refund overpayments within 60 days of identification creates potential fines and penalties under the False Claims Act and Civil Monetary Penalties Law for failure to report and return the overpayment(s). For each overpaid claim, the government may be able to seek recovery of three times the claims value and a civil monetary penalty of up to $11,000. Failure to act (perform an inquiry as to the overpayment) with deliberate speed on the part of the provider, could result in the provider knowingly retaining an overpayment, and may result in exclusion from participation in the federal health care programs.
An overpayment is defined as any funds a provider received or retained under the Medicare/Medicaid program to which the provider is not entitled. Examples of overpayments include but are not limited to:
Medicare/Medicaid payments for billed non-covered services
• Receipt of Medicare/Medicaid payments when another payor had the primary responsibility for payment
Medicare/Medicaid payment in excess of the allowable amount for an identified covered service
Errors and non-reimbursable expenditures on cost reports