On June 21st, the U.S. Supreme Court refused to review the D.C. Circuit’s revival of a federal regulation mandating Medicare Advantage Organizations (MAOs) to return excess payments to the government within 60 days to avoid False Claims Act liabilities. The justices’ decision leaves in place a unanimous Appellate court ruling that reversed a lower court’s decision to vacate the CMS’ 2014 Overpayment Rule. The rule requires plans to report and return payments if they find that their members’ diagnoses are unsupported by the medical record. The D.C. Circuit clearly stated (Unitedhealthcare Ins. Co. v. Becerra, 16 F.4th 867 (D.C. Cir. 2021):
Nothing in the Overpayment Rule obligates insurers to audit their reported data…The Rule only requires insurers to refund amounts they know were overpayments, i.e., payments they are aware lack support in a beneficiary’s medical records. That limited scope does not impose a self-auditing mandate.
What does mean for MAOs?
It means that the 2014 Overpayment Rule is in full force and effect (42 CFR § 422.326 – Reporting and returning of overpayments) for both Medicare Part C and Part D. On September 30, 2022 (60 days after the revised 8/1/2022 Deadline for Submission of Risk Adjustment Data for the 2021 Payment Year), MAOs will have refund all monies to CMS for diagnoses known to be unsupported by the medical record. Moreover, the Overpayment Rule mandates a Look-back period of 6 years. An MAO must report and return any overpayment identified for the 6 most recent completed payment years. Failure to return an overpayment within 60 days of identification can lead to “reverse” False Claims Act liability, i.e., for avoiding an obligation to the Government.