CMS Proposes 10-Year Review for Provider Overpayments

A proposed rule that would extend responsibility for Medicare overpayments through a 10-year "lookback period" is generating concern from healthcare providers. 

The proposed rule, posted in the Federal Registry on Feb. 16 by the Centers for Medicare and Medicaid Services, implements a provision of the Affordable Care Act that details reporting and reimbursement guidelines for Medicare overpayments.

The lookback period now is generally about four years. CMS estimates that extending the review by another six years would cost as much as $58 million in reporting-related expenses each year for about 125,000 providers and suppliers.

The public comment period on the proposed rule extends through April 16.  

Amy E. Nordeng, government affairs counsel for the Medical Group Management Association, told HealthLeaders Media that a 10-year lookback would create an undue burden for most healthcare providers.

 "We wish it was shorter. We are going to argue that it should be shorter," said Nordeng. "For a group practice finding the records and having the same billing system in place 10 years down the road is pretty unlikely."

"Four years is much more reasonable because practices are used to that. You plan for the government being able to go back four years so you are able to develop processes for that," she says.

CMS said in the proposed rule that a 10-year lookback period would make it consistent with the False Claims Act statute of limitations and that the proposal is "appropriate for several reasons."

"First, we believe that providers and suppliers should have certainty after a reasonable period that they can close their books and not have ongoing liability associated with overpayment," CMS said. "We also believe that the length of the lookback period is long enough to sufficiently further our interest in ensuring that overpayments are timely returned to the Medicare Trust Funds."

Overzealous Oversight
Nordeng says CMS is a little too zealous. "To the extent where they are trying to find actual false claims where there was knowing intent to submit a false claim, they would still have that 10 years. But to attach that 10 years to the overpayment as well seems like overkill," she says.

Michael Gennett, of counsel at Miami-based Akerman Senterfitt Law Firm, told HealthLeaders Media he is urging his clients to voice their concerns during the public comment period.

"When we let our clients know there is a comment period for a proposed rule, usually I don't expect that somebody is going to take the time to shape the rule. But this is one that especially hospitals will want to weigh in on," he says. "The 10 years has a monetary impact obviously as far as how much you may have to return. But there's a practical impact of trying to go through records that go back that far. Most people may not have those records on site."

Linking the 10-year lookback to the False Claims Act isn't necessary, Gennett says, because most overbillings have no criminal intent.

"[Ten years] would be under the worst case scenario under the False Claims Act when in fact most of the time when there is some kind of billing error it is just that—an error. It is not a knowingly false claim," he says.

While the CMS proposal is alarming, Gennett says it shouldn't come as a complete surprise.

"The political environment we are in right now is one where the federal government is taking all kinds of measures to combat fraud and abuse in healthcare with the idea that we are going to save money," he says. "Most government agencies have taken a fairly aggressive stand and this would be an example of that."

The American Hospital Association and the American Medical Association also are drafting letters to CMS that will detail their opposition to the proposed rule.

"The AHA believes that hospitals need a workable solution to return overpayments.  Unfortunately, the proposal will create new and unnecessary burdens and risks for hospitals, burdens and risks that go well beyond what Congress intended," AHA said in a statement.

"We are particularly concerned with the extraordinary expansion of a look back provision to 10 years and, what appears to be, an effort to effectively expand the reach of the False Claims Act beyond what Congress understood was necessary when it amended that statute to address overpayments in 2009."