By: Christopher A. Parrella, Esq., CPC, CHC, CPCO
Parrella Health Law, Boston, Ma.
A Health Law Defense and Compliance Firm

In a significant development for healthcare providers, the Centers for Medicare & Medicaid Services (CMS) has proposed new regulations to provide clarity and extend deadlines concerning Medicare and Medicaid overpayments. This proposal is part of the 2025 Physician Fee Schedule (PFS) Proposed Rule, set to be published on July 31, 2024.

Understanding the 60-Day Refund Rule
The 60-day Refund Rule, originating from the Affordable Care Act of 2010, mandates that healthcare providers must report and return Medicare and Medicaid overpayments within 60 days of identifying them. Non-compliance with this rule can result in severe penalties, including civil monetary penalties up to $24,164 for 2023, and potential violations under the Federal False Claims Act (FCA).

Proposed Six-Month Suspension Period
The newly proposed regulations introduce a six-month period during which the 60-day refund deadline would be temporarily suspended. This suspension is intended to give providers ample time to conduct a thorough, good-faith investigation into potential overpayments without the pressure of the impending 60-day deadline. Specifically, the proposed § 401.305(b)(3) outlines that this suspension will apply if:

• An overpayment is identified but a comprehensive investigation to determine related overpayments is not yet complete.
• The investigation is conducted in a timely and good-faith manner.
• This suspension period will remain in effect until the investigation is concluded or 180 days have passed since the initial identification of the overpayment, whichever comes first.

Implications for Healthcare Providers
For healthcare providers, this proposed rule change is a significant adjustment that could alleviate the operational pressures associated with the current 60-day deadline. It allows more flexibility to ensure accuracy and thoroughness in identifying and rectifying overpayments. However, it also means that providers need to maintain diligent and systematic approaches to investigating potential overpayments to avoid falling afoul of these regulations once they are finalized.

Providers and suppliers are encouraged to review and possibly revise their overpayment policies in light of this proposed change. The public comment period for this proposed rule extends until September 9, 2024, providing stakeholders an opportunity to voice their perspectives and concerns.

What Providers Should Do Next
Healthcare entities should closely monitor the finalization of these proposed regulations. Upon finalization, it will be crucial to:

• Ensure internal processes are aligned with the new requirements.
• Train staff on the updated regulations to ensure compliance.
• Engage with legal and compliance experts to navigate these changes effectively.

This proposed regulatory change by CMS underscores the ongoing evolution of healthcare compliance and the need for providers to stay informed and adaptable. As always, Parrella Health Law is here to help healthcare providers navigate these complexities and ensure compliance with all federal regulations including any voluntary refund and disclosure obligations. Contact us at 857-328-0382 or email me at cparrella@parrellahealthlaw.com.

Christopher Parrella, ESQ, CPC, CHC, CPCO, is the founding partner of Parrella Health Law in Boston, Mass. The firm focuses exclusively on healthcare defense and compliance matters. Chris also travels the country on behalf of a wide range of healthcare organizations, lecturing on a variety of health care enforcement and compliance topics. Chris is one of a handful of health care attorney’s that are also Certified Professional Coders (CPC) and is a member of the AAPC’s National Legal Advisory Board and Ethics Committee.  He is also a Certified Professional Compliance Officer (CPCO) and Certified in Health Care Compliance (CHC.)