Understanding the New 60-Day Overpayment Rule


Federal regulations for identifying and reimbursing Medicare overpayments impose new obligations you can't afford to ignore.

Fam Pract Manag. 2016 May-June;23(3):12-14.

Author disclosure: no relevant financial affiliations disclosed.

Published online ahead of print on April 26, 2016.

Did you know that any overpayment by Medicare that is not repaid within 60 days of being identified converts to a false claim, which can result in prosecution? New regulations released by the Centers for Medicare & Medicaid Services (CMS) in February extend the scope of what constitutes an overpayment, expand the timeframe during which a physician practice must be on the lookout for potential problems, and make practices liable for overpayments going back six years. This is a new world order and will require practices to change their processes and refresh their compliance plans. Any practice that has not yet adopted a compliance plan, with procedures on this and other billing and administrative issues, should do so immediately.

The regulations are barely a page long, but the related commentary spans 25 pages in the Federal Register.1 This article explains the regulations but also draws on the commentary provided by the regulators to address implications that the regulations themselves did not confront.

What is an overpayment?

The regulations say an overpayment is any funds received or retained under Medicare Part B to which the person “is not entitled.”1 (The rules extend to Part A as well, but we do not cover those here.) Obvious overpayments include duplicate payments, payments in excess of the allowable amount, payments when another payer is primary, and payments for services by an excluded person.

Less obvious are payments that result from the following:

  • Accidental or intentional up-coding,

  • Claims resulting from violations of the anti-kickback or physician self-referral (“Stark”) laws,

  • Payments for services that are not medically necessary,

  • Payments not supported by adequate documentation,

  • Payments for services provided by nonqualified individuals,

  • Payments for services that do not meet coverage requirements, “incident-to” guidelines, the teaching physician rules, or the Stark group practice definition.

The definition of overpayment is sweeping, and the regulations put the burden on the recipient to be proactive about identifying them.

When is an overpayment identified?

The identification of an overpayment triggers a 60-day obligation to repay the identified amount. After 60 days, the claim becomes false. A false claim is subject to triple the charges plus up to $11,000 for each improper claim, a value that will increase over time. Whistleblowers can also file suit over unreported false

About the Author

Alice Gosfield is principal of Alice G. Gosfield & Associates in Philadelphia.

Author disclosure: no relevant financial affiliations disclosed.



1. 81 Federal Register 7654-7684 (2016) (codified at 42 CFR §401.301-305). http://1.usa.gov/1Qbr4TB. Accessed April 21, 2016.


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