The 60-day repayment rule was implemented by the Centers for Medicare and Medicaid Services (CMS) effective March 14, 2016 to clarify Medicare providers’ obligations to investigate, report, and refund identified overpayments under the Affordable Care Act. The rule specifically details what it means to “identify” an overpayment and explains how to report and return identified overpayments to CMS.¹ The rule also states that an overpayment must be reported and returned if it is identified within six years of the date it was received. This time period is generally referred to as the “lookback” period.

Application of the Final Rule to Medicaid Claims

While the final rule provides guidance to Medicare providers, confusion remains with respect to overpayments made to providers who primarily submit claims to state Medicaid programs, including children’s hospitals. Notably, CMS specifically stated in the final rule that it only applies to traditional Medicare overpayments for Medicare Part A and B services, and does not apply to Medicaid overpayments.² In response to comments expressing concern over the lack of a uniform rule relating to overpayments from different government payors, CMS stated that it believed that separate rulemaking processes are appropriate to address the differences between the programs, including the role of state Medicaid agencies and contractors in the administration of state Medicaid programs.³ However, as of this date, CMS has not proposed a rule specifically relating to Medicaid overpayments.

Despite the lack of guidance from CMS, providers must still continue to investigate and resolve potential overpayments from Medicaid. CMS has emphasized that in the absence of a rule, providers that identify Medicaid overpayments must report and refund those overpayments to the appropriate payor as required by section 1128J(d) of the Social Security Act.⁴ CMS also reminded providers that the requirements of section 1128J(d) to report and refund an overpayment apply to Medicaid program overpayments and failure to comply with those requirements could lead to potential False Claims Act and civil monetary penalty liability, and exclusion from federal health care programs.⁵ However, these authorities do not provide specific guidance regarding the appropriate lookback period that Medicaid providers must use when determining the extent of the overpayment.

Determining an Appropriate Lookback Period for Medicaid Claims

Unless and until CMS issues further guidance on this matter, Medicaid providers should consider consulting applicable state law to determine if a lookback period more specific to Medicaid claims could be utilized instead of the six-year period mandated for Medicare. For example, some state Medicaid statutes, regulations, or program manual guidance may expressly establish a specific lookback period. If these authorities are silent, then it may be instructive to review the applicable state’s statute of limitations for a Medicaid false claim in determining how far back to investigate potential overpayments. In addition, Medicaid record retention requirements may provide guidance to providers seeking to determine an appropriate lookback period, as the length of time providers are required to retain records may impact whether the provider is able to successfully investigate a potential overpayment. These types of authorities could establish a lookback period equivalent to or longer than the six-year period required for Medicare claims, or could provide support for a shorter time period.

Potential Medicaid Lookback Periods in Missouri, Texas, and Kansas

A complete analysis of multiple states’ Medicaid statutes, regulations, and program guidance is beyond the scope of this bulletin. However, for illustrative purposes, highlighted below are examples of different authorities from the states of Missouri, Texas, and Kansas that could be consulted to assist in determining an appropriate Medicaid lookback period.

Missouri

The Missouri Medicaid program, commonly referred to as MO HealthNet, generally requires providers to retain all records for a minimum of five years.⁶ MO HealthNet, via provider bulletin, has pointed to this record retention requirement when discussing the applicable lookback period for Medicaid Integrity Contractor (MIC) audits.⁷ In addition, while Missouri’s Health Care Payment Fraud and Abuse statute does not set forth a statute of limitations for a civil false claim action, Missouri’s civil statute of limitations provisions provide that similar actions generally must be taken within five years.⁸ In the absence of express guidance from CMS and MO HealthNet, Missouri Medicaid providers who have identified a potential overpayment may want to consider these sources when determining an appropriate lookback period.

Texas

The Texas Department of Health and Human Services Office of Inspector General (Texas OIG) published its own Self-Disclosure Protocol (SDP) to provide guidance to Texas Medicaid providers who have self-identified a potential overpayment in light of the reporting and refunding obligations set forth under the Affordable Care Act.⁹ Similar to section 1128J(d) of the Social Security Act, the SDP does not establish a definite lookback period. Likewise, the Texas Medicaid Fraud Prevention Law has no express statute of limitations. However, in qui tamcases where the government has not intervened, a four-year statute of limitations for false claims applies under the Texas Civil Practice and Remedies Code.¹⁰ Providers determining how far back to investigate potential Texas Medicaid overpayments may want to consider these authorities, in addition to any Texas Medicaid record retention requirements or other relevant guidance.

Kansas

In Kansas, several authorities indicate that a six-year lookback period may be appropriate for Medicaid overpayments. For example, the Kansas False Claims Act generally provides that a civil action for false claims may not be brought more than six years after the date on which the violation was committed.¹¹ Similarly, Kansas Medicaid managed care plans generally require providers to maintain records for at least six years.¹² Taken together, these time frames may guide Kansas Medicaid providers when determining how far back to investigate a potential overpayment.

Conclusion

Without a rule from CMS or specific guidance from state Medicaid agencies regarding lookback requirements for Medicaid overpayments, Medicaid providers must come to their own conclusions regarding how far back to investigate a potential state Medicaid overpayment. Applicable state Medicaid laws and regulations, program manuals, provider agreements, bulletins, and other state resources may assist in making this determination. However, in many states, there may be no clear answer, and therefore any determinations regarding appropriate Medicaid lookback periods should be made in consultation with legal and compliance staff.

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¹ 81 Fed. Reg. 7653 (Feb. 12, 2016).
² Id. at 7655.
³ Id.
⁴ Id. at 7655-56.
⁵ Id.
⁶ See e.g., MO HealthNet Hospital Manual, Section 2.3 (May 4, 2017).
⁷ See MO HealthNet Provider Bulletin, Vol. 33, No. 22 (Nov. 1, 2010). The lookback period for MIC audits is five years prior to the date the audit begins. See Medicaid Integrity Program Manual, Ch. 10 – Medicaid Integrity Audits (Sept. 23, 2011).
⁸ RSMo. § 516.120.
⁹ See Texas Health and Human Services Commission, Office of Inspector General, Self-Disclosure Protocol (Feb. 2016).
¹⁰ See Tex. Civ. Prac. and Rem. § 16.051; see also U.S. ex rel. Foster v. Bristol-Myers Squibb Co., 587 F.Supp.2d 805 (2008).
¹¹ K.S.A. § 75-7505.
¹² For example, Sunflower Health Plan requires providers to maintain all records for KanCare members for at least six years. See Sunflower Health Plan Provider Office Manual, pg. 66 (June 2017).

Megan C. Phillips edited this Bulletin.

Copyright 2017, American Health Lawyers Association, Washington, DC. Reprint permission granted.