On December 27, 2022, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule which, in part, seeks to amend the existing regulations for Medicare Parts A, B, C, and D regarding the standard for when an "identified" overpayment must be refunded, pursuant to the Affordable Care Act (ACA) and the False Claims Act (FCA) reverse false claims provision. As written, the proposed rule would remove the existing "reasonable diligence" standard for identification of overpayments, and add the "knowing" and "knowingly" FCA definition. As a result, an overpayment would be "identified" when the entity has actual knowledge of an identified overpayment, or acts in reckless disregard or deliberate ignorance of an identified overpayment. And, a provider is required to refund overpayments it is obliged to refund within 60 days of such identified overpayment.
If this proposed rule is finalized, the Department of Justice (DOJ) and Health and Human Services (HHS) Office of Inspector General's (OIG) should be applying the same intent standard to their evaluation of potential reverse false claims and Civil Monetary Penalty liability.
The Lay of the Land
Currently, the applicable overpayment regulations state:
A person has identified an overpayment when the person has, or should have through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment. A person...
