Wachler & Associates Health Law Blog2025 PFS Proposed Rule Includes 6-Month Suspension on the 60-Day Refund Rule
On July 31, 2024, the Centers for Medicare & Medicaid Services (CMS) published the Calendar Year 2025 Physician Fee Schedule (PFS) Proposed Rule. Among other changes, the 2025 PFS Proposed Rule includes additional proposed changes to the so-called “60-day rule” regarding returning identified overpayments. Initially established by the 2010 Affordable Care Act, the 60-day rule requires healthcare providers to report and return Medicare and Medicaid overpayments within 60 days of identifying such overpayments. The potential consequences for failing to comply with the 60-day rule are severe, and can result in the imposition of a civil monetary penalty or an alleged violation of the Federal False Claims Act. Providers should pay close attention to the potential changes to the 60-day rule included in the 2025 PFS Proposed Rule.
The 2025 PFS Proposed Rule is not the first time that CMS has proposed changes to the 60-day rule, and it likely will not be the last. In December 2022, CMS published a proposed rule that would amend the regulations regarding the standard for an “identified overpayment” under the Medicare program. Specifically, the December 2022 Overpayment Proposed Rule proposed to remove the existing “reasonable diligence” standard and adopt by reference the Federal False Claims Act definition of “knowing” and “knowingly.” To date, CMS has not finalized these proposals with respect to identified overpayments under the Medicare program.
In the 2025 PFS Proposed Rule, CMS states that it is retaining the proposals published in the December 2022 Overpayment Proposed Rule, and proposes further changes to revise the regulations regarding the timeframe for reporting and returning overpayments. Currently, the applicable regulations require that an overpayment be reported and returned by the later of: (1) the date which is 60 days after the date on which the overpayment was identified; or (2) the date any corresponding cost report is due, if applicable. However, under the 2025 PFS Proposed Rule, the deadline for returning a reported overpayment would be suspended under specified circumstances. The 2025 PFS Proposed Rule would create an entirely new regulatory provision to suspend the deadline for reporting and returning overpayments for up to 6 months to allow time for providers to investigate and calculate overpayments. Previously, in 2016 rulemaking regarding reporting and returning of overpayments, CMS discussed that under the “reasonable diligence” standard, providers would be allowed a 6-month period in which to conduct a good-faith investigation of credible information of a potential overpayment. At the time of the 2016 rulemaking, CMS had not proposed to implement this 6-month period into the applicable regulations.
Now, under the 2025 Proposed Rule, CMS is seeking to formally implement a new regulatory provision that the deadline to report and return an overpayment would be suspended if: (1) a person has identified an overpayment but has not yet completed a good-faith investigation to determine the existence of related overpayments that may arise from the same or similar cause or reason as the initially identified overpayment; and (2) the person conducts a timely, good-faith investigation to determine whether related overpayments exist. If these conditions are satisfied, then the newly proposed regulation would permit the deadline for reporting and returning the initially identified overpayment and related overpayments that arise from the same or similar cause or reason as the initially identified overpayment to remain suspended 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.
If finalized, the 2025 Proposed Rule may make it less burdensome for providers to comply with the 60-day rule, but will also likely introduce a host of complex compliance pitfalls. Public comment on the Proposed Rule is available until September 9, 2024. Providers should seek experienced healthcare representation when confronting potential identified overpayments or other healthcare compliance or regulatory matters.
For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.