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Look-back period extended for some Medicare overpayments

The Office of the Inspector General (OIG) recently conducted an audit of Medicare claims for a specific medical device. The agency found the majority of Medicare claims for this device, the positive airway pressure device and associated supplies, did not comply with Medicare requirements. As a result, the agency called on those who filed claims with Medicare for payment for these devices to “exercise reasonable due diligence to investigate and return any identified overpayments, in accordance with the 60-day rule.”

There are two primary concerns with this finding:

  • Immediate impact
  • Future impact

This piece will touch on these concerns.

Immediate impact: Internal audits and repayment

As a result of this audit, certain medical contractors received letters calling for an internal audit and repayment to Medicare for any overpayment received.

The agency’s move is based on the Affordable Care Act’s 60-day rule. This rule calls on suppliers to refund the government any overpayment within a period of 60 days. The rule also states that proper due diligence requires six year look back to identify other overpaid claims. A failure to do so can result in allegations of False Claims Act (FCA) violations. A successful FCA claim can lead to a revocation of billing privileges.

This means those who received a letter likely hired third-party auditors to conduct the audit. If overpayments are found, the suppliers would generally need to file an appeal or repay the government.

Future impact: Longer look-back periods may be the new norm

As noted in a recent analysis of the report, there is concern the longer look-back period will become the new normal. This is particularly true for claims initiated as a result of an OIG audit.