Heeding concerns raised by the AHA and others, the Centers for Medicare & Medicaid Services (CMS) Feb. 11 issued a final rule that requires providers to repay overpayments discovered within six years of the initial Medicare reimbursement, a much shorter look-back period than first proposed.

CMS last February delayed the final rule due to concerns over the proposed rule – issued in February 2012 – that called for hospitals and other providers to look for Medicare overpayments dating as far back as 10 years. The rule carries out a section of the 2010 Affordable Care Act that requires health care providers to report and return Medicare overpayments to CMS, as well as to identify why the overpayment occurred.

The AHA had criticized the proposed rule as regulatory overreach. The association welcomed CMS’s decision to scale back the look-back period. The proposed rule “would have created an extraordinary burden on hospitals, and was premised on a flawed application of the False Claims Act to payment policy,” AHA Executive Vice President Tom Nickels said last week.

Once identified, overpayments must be reported and returned within 60 days or by the due date for any corresponding cost report. According to the final rule, “a person has identified an overpayment when the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.”