SEC. 1641. REQUIRED REPAYMENTS OF MEDICARE AND MEDICAID OVERPAYMENTS.

Section- 1128G of the Social Security Act, as inserted by section 1631 and amended by section 1632, is further amended by adding at the end the following new subsection:

'[c] Reports on and Repayment of Overpayments Identified Through Internal Audits and Reviews-

'[1] REPORTING AND RETURNING OVERPAYMENTS- If a person knows of an overpayment, the person must--

'[A] report and return the overpayment to the Secretary, the State, an intermediary, a carrier, or a contractor, as appropriate, at the correct address, and

'[B] notify the Secretary, the State, intermediary, carrier, or contractor to whom the overpayment was returned in writing of the reason for the overpayment.

'[2] TIMING- An overpayment must be reported and returned under paragraph [1][A] by not later than the date that is 60 days after the date the person knows of the overpayment. Any known overpayment retained later than the applicable date specified in this paragraph creates an obligation as defined in section 3729[b][3] of title 31 of the United States Code.

'[3] CLARIFICATION- Repayment of any overpayments [or refunding by withholding of future payments] by a provider of services or supplier does not otherwise limit the provider or supplier's potential liability for administrative obligations such as applicable interests, fines, and specialties or civil or criminal sanctions involving the same claim if it is determined later that the reason for the overpayment was related to fraud by the provider or supplier or the employees or agents of such provider or supplier.

'[4] DEFINITIONS- In this subsection:

'[A] KNOWS- The term 'knows' has the meaning given the terms 'knowing' and 'knowingly' in section 3729[b] of title 31 of the United States Code.

'[B] OVERPAYMENT- The term 'overpayment' means any finally determined funds that a person receives or retains under title XVIII, XIX, or XXI to which the person, after applicable reconciliation, is not entitled under such title.

'[C] PERSON- The term 'person' means a provider of services, supplier, Medicaid managed care organization [as defined in section 1903[m][1][A]], Medicare Advantage organization [as defined in section 1859[a][1]], or PDP sponsor [as defined in section 1860D-41[a][13]], but excluding a beneficiary.'.