AHA Criticizes Overpayment Reporting Provision of Health Care Law

The American Hopsital Association (AHA) recently issued critical comments in response to a proposed rule concerning the reporting and returning of overpayments paid to health care providers and suppliers by a federal health care program such as Medicare and Medicaid.  The proposed rule, issued on February 16, 2012 and listed in the federal registrar as “CMS-6037-P,” would implement section II28J(d) of the Affordable Care Act.  Under the plain text of that statute, a supplier or provider of services must report and return any overpayment within either 60 days of the overpayment’s identification or the date of a corresponding cost report, if applicable.  The proposed rule provides procedures and guidance for enforcing the Affordable Care Act’s statutory requirements concerning overpayments.

Nearly every provision of the proposed rule was addressed by the AHA’s letter to CMS, though common to all criticisms of the rule appears to be AHA’s concern that the proposed rule would impose excessive burdens on hospitals to investigate potential overpayments, adminstrative uncertainty, and unreasonable liability for overpayments which may have occured within the past 10 years.

Indeed, the principle concern expressed by the AHA related to the perceived burden the proposed rule would have on hospitals to fully investigate and identify past overpayments in order to avoid liability under the new law.  The AHA specifically urged CMS to evaluate the meaning of the word “identify” as it relates to the identification of overpayments required to be reported and returned to the government.  The proposed rule construed the word to impose responsibility for reporting and returning an overpayment “if the person has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment.”  The AHA is concerned that this understanding of the statute would impose liability upon a hospital “even if no individual was aware of or recognized that it had received an overpayment.”

Public comment on the proposed rule closed on Monday.  CMS will evaluate public comments, respond to those submissions, and issue a final rule within the coming months.