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Regulatory overreach

April 16, 2012
 The Centers for Medicare & Medicaid Services’ (CMS) recently proposed rule on Medicare overpayments is deeply troubling.

Among other things, it would require hospitals to look for Medicare overpayments dating back as far as 10 years – more than doubling today’s four-year “lookback” period. If hospitals fail to return Medicare overpayments within 60 days of their identification, they could face stiff civil monetary penalties and even be found in violation of the “False Claims Act.”

America’s hospitals and health systems work hard to comply with the mountain of rules and regulations that govern Medicare payments. Over the years, they have made a significant investment in compliance programs and activities that are built on the existing rules and processes for billing and payment, all to make sure they receive only what they are entitled to in Medicare reimbursement.

Every year, Medicare processes more than 150 million claims for hospital services. Predictably, mistakes are made by hospitals, CMS and Medicare contractors alike.

The proposed rule would carry out a section of the 2010 “Patient Protection and Affordable Care Act” (ACA), which requires providers to report and return Medicare overpayments to CMS, as well as to identify why the overpayment occurred. But the proposed rule would take what is intended under the ACA to be a clear and efficient process for returning overpayments that result from mistakes and twist it into a confusing, onerous and legally risky set of expectations for hospitals.

Confusing because there is no acknowledgement or consideration of the overlap, inconsistency and contradictions with current Medicare billing processes and the program’s many and varied postpayment audits and review. Onerous because it would divert precious hospital resources in staff time, dollars and information technology systems in an effort to make needed changes to meet the proposal’s unreasonable and often impossible timeframes and to conduct sweeping reviews of records and submissions. Legally risky because the proposed rule wraps these unreasonable and impractical expectations in the cloak of “False Claims Act liability.” CMS needs to revise the proposed rule, with an emphasis on minimizing unnecessary administrative and financial burdens on hospitals and improving its coordination with the many existing and varied reviews, reviewers and processes that are already part of our Medicare world. And it should do so by following the law’s clear intent, which is to provide a safe and reliable way for hospitals to return payments mistakenly received from the government.