On January 1, 2013, Congress passed the American Taxpayer Relief Act in an effort to avoid the automatic tax increases that would otherwise have gone into effect. In the main, the new law concerns taxes; however, a little-noticed provision in the law allows Medicare contractors to go back as many as five years from the first day of the year following the date the payment was made to collect non-fraudulent overpayments. Previously, the “look-back” period was three years. This provision, which has not been widely reported and was not mentioned by the Centers for Medicare and Medicaid Services (CMS) in its official explanation of the law, was included at the urging of the Department of Health and Human Services’ Office of the Inspector General, which concluded that as much as $332 million in identified overpayments had gone uncollected due to the expiration of the three-year limit and the length of the audit process.

The new provision only applies to non-fraudulent overpayments; a separate provision in the 2010 health care reform bill (the Affordable Care Act) allows regulators to go back as far as ten years to collect some overpayments. The proposed rules to implement this provision, which have been published but not finalized, would apply the ten-year period to allegedly fraudulent overpayments.

The extension of the three-year period to five years is certain to have a significant impact on providers who have identified overpayments as a result of billing mistakes or improper coding. It will require providers to audit five years worth of billings, increasing administrative burdens on providers, and could result in a major increase in the amount of payments that must be repaid in the event overpayments are identified.

For additional information regarding this new law and Medicare audits in general, please contact me or an attorney in Blalock Walters’ Health Care Group.

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