The Affordable Care Act requires providers to return overpayments to federal health care programs within 60 days of identification. Neither the ACA nor federal regulations specifically define when an overpayment is "identified" for purposes of beginning the 60-day clock. In 2012, CMS issued a proposed rule (never finalized) that would define an overpayment to be identified when a person has actual knowledge of, or acts in deliberate ignorance/reckless disregard of the overpayment's existence. The provider community rejected this definition as being too broad, arguing that an overpayment should only be "identified" when the actual amount of the overpayment was determined.
In a case of first impression, Kane ex rel. United States v. Healthfirst_ Inc._ 2015 U.PDF., the United States District Court for the Southern District of New York sided with the government, and held that for purposes of triggering the 60-day reporting requirement, an overpayment is identified "when a provider is put on notice of a potential overpayment, rather than the moment when an overpayment is conclusively ascertained." The court further stated that "Congress intended that "there is an established duty to pay money to the government, even if the precise amount due has yet to be determined." In other words, under this interpretation, the 60 day clock begins to run once the "issue" has been identified, regardless of whether the monetary impact of the issue has been conclusively determined.
Providers conducting self-audits, or who are involved in compliance billing reviews, must be cognizant of the ACA's reporting requirements, and the interpretations of both the government and the courts. If your organization is involved in a compliance billing audit, and would like to discuss the reporting requirements under the ACA, please contact David Marshall of our office at (717) 620-2424 or [email protected].