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San Antonio, TX | Baton Rouge, LA

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Congress Extends the Period Permitting Medicare Overpayment Recoveries

The time period that Medicare overpayment recoveries can be made has been extended.(January 19, 2013):  Among other things, the recently enacted legislation that addressed the fiscal cliff – the “American Taxpayer Relief Act of 2012” (ATRA), contained a number of provisions that affect the Medicare program and its providers.  One of those provisions, Section 638, has particular importance for our clients.  Section 638 extends from three to five years the period within which the government can notify a provider of a Medicare overpayment before the provider is automatically deemed to be without fault.


I.     The Original Rule on Medicare Overpayment Recoveries:

Prior to the enactment of ATRA, the Medicare program was precluded from recovering an overpayment under certain circumstances, where the government failed to notify a provider, who was otherwise without fault, of the overpayment within 3 years of that payment.  The types of denials to which this provision applied included determinations that the service was not reasonable and necessary or that the care was custodial in nature.   Under ATRA, the Medicare program now has 5 years within which to notify the provider of an overpayment under these circumstances before the provider will be deemed to be without fault.

II.     Practical Effect of This Change:

This provision simply extends the period of uncertainty before providers can be certain that they will not face potential Medicare overpayment recoveries related medical necessity determinations.  Additionally, it increases the burden on providers to justify why the services were necessary in any appeal process.  Trying to understand and explain the medical necessity of a particular service or treatment course becomes increasingly difficult with the passage of time.  This only increases the burden on, and necessity for, providers to make sure that their files contain documentation that justifies the clinical judgment that was made at the time of treatment.  Liles Parker attorneys are incorporating this change, which is effective as of January 2, 2013, into our analysis and handling of overpayment appeals.  However, at the same time, providers need to be aware that neither the provision on “without fault” nor the recent amendments affect or alleviate the requirement that providers must return known overpayments within 60 days of their discovery.

Healthcare LawyerMichael H. Cook Esq., is  a Partner at the health law firm, Liles Parker, PLLC.  With offices in Washington, DC, Houston, TX, San Antonio, TX and Baton Rouge, LA, our attorneys represent home health agencies, physicians and other health care providers around the country in connection with Medicare / Medicaid prepayment reviews, postpayment audits, Compliance Plan reviews and state peer review actions.  Should you have any questions, please call Michael for a free consultation at 202-298-8750 or at


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