HHS proposes giving hospitals 60 days to return overpayments

Failure to comply could result in False Claims Act liability

HHS on Tuesday issued a proposed rule that would require hospitals and physicians to voluntarily return all overpayments within 60 days of detecting an erroneous payment.

The rule—which was broadly outlined in the federal health reform law—gives health care providers 60 days to return overpayments from the moment the organization has "actual knowledge" of an error, or when a person deliberately ignores the truth or recklessly disregards it. However, the rule would not require health care organizations to search for "proof of specific intent to defraud" to identify overpayments.

According to AHA News, examples of overpayments could include:

  • Errors and non-reimbursable expenditures in cost reports;
  • Medicare payments for non-covered services;
  • Medicare payments in excess of the allowable amount for a covered service;
  • Duplicate payments; and 
  • Receipt of Medicare payments when another payer had primary responsibility.

The proposed rule will be published in the Federal Register on Thursday, and stakeholders will have 60 days from the publication date to offer comments.

According to Modern Healthcare, some health law experts already have expressed concern that the proposed rule would trigger certain False Claims Act provisions if hospitals, physicians, health care suppliers, and other organizations knowingly fail to return overpayments within 60 days of identifying an error (Carlson, Modern Healthcare, 2/14 [subscription required]; AHA News, 2/14; AP/Washington Post, 2/13).

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