A Mea Culpa for Flawed Info

A Mea Culpa for Flawed Info

Sometimes it is important to say, “I screwed up.”

For 18 years, Fredrikson’s health law group has done free webinars. The most recent one was about internal and external audits. During it, I mentioned that there was a proposed rule that would change the definition of “identified,” with respect to an overpayment, under the 60-day rule. I said that the rule was proposed, but it’s possible that it would never be finalized. 

A couple of listeners immediately challenged me, noting they thought that the revised rule took effect Jan. 1. Perhaps the only thing I can say in my defense is that at least I acknowledged the possibility that I could be wrong, noting that I wasn’t aware of the change, but I’d certainly been wrong before. I have been wrong before – and I was wrong then! The 2025 fee schedule has a provision finalizing the proposed change to the definition of “identification.” The listeners questioning me were correct. One of those listeners was Nina Youngstrom. She did exactly what you should do when you think someone has made a mistake; she sent me the citation supporting her position.

The new definition changes language in 42 CFR § 401.305(a)(2). Historically, an overpayment was “identified” when a person knew, or should have known, through the exercise of due diligence, that they had received an overpayment – and, importantly, quantified the amount. The preamble to the old rule indicated that if you were reasonably prompt in conducting your investigation, you hadn’t violated the rule, suggesting that in most cases, finishing your query within six months was adequate. 

The new language removes the language about quantification and uses the knowledge requirement found in the False Claims Act. Under this new regulation, as soon as you know about the facts or circumstances giving rise to a potential overpayment, the 60-day rule is triggered, but the regulation says the deadline for reporting and returning the overpayment is delayed until the earlier of “the date that the investigation of related overpayments has concluded and the aggregate amount of the initially identified overpayments and related overpayments is calculated” – or “the date that is 180 days after the date on which the initial identified overpayment was identified.”

Under the change, you still get 180 days to figure out, if you have an overpayment. While that is good, it is definitely shorter than the timeframe that previously existed. Historically, that six-month window was not hard-and-fast. Presumably, if there were good reason for your calculation to take longer, you could use it. In addition, under the old rule, after you determined the amount, you had an additional 60 days to send in the money. Under the new rule, the check appears to be due literally the day you calculate the amount of the overpayment. Considering how long it can take the government to cut a check, that seems quite unreasonable.

While part of this article is making sure people know about the rule, another part is noting that I am fallible. You can, and should, question everything I say. The final point I will share is, if I could find a way, I’d take back those words that…I said. 

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David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

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