Are Medicare Contractors Dropping the Ball on Overpayments?


Medicare has long been plagued with overpaying providers, and one of the primary duties of program integrity contractors is to collect the overpayments and return them to Medicare. However, this may not be happening, as evidenced by a recent report from the Health and Human Services Office of Inspector General.

Medicare administrative contractors tried to collect $482 million in overpayments that were referred to them in fiscal year 2014, but had only collected $96 million as of September 2015, the report said. The longer it takes to collect an overpayment, the more likely it is that the money will never be returned to Medicare.

It’s no secret that the Centers for Medicare & Medicaid Services overpayment collection process doesn’t work very well, Judith Waltz, a health-care attorney with Foley & Lardner LLP in San Francisco, told me. The CMS has a limited ability to deal with overpayments, Waltz said. It can recover overpayments, as long as the provider or supplier is still submitting claims, and it can refer overpayments to the Treasury Department for collection, but that’s about it, Waltz said.

“The Department of Justice has to step in for affirmative litigation, and for settlements over a set amount, the DOJ’s approval is required,” Waltz said. Affirmative litigation is required when providers or suppliers are no longer participating in Medicare, preventing the CMS from collecting any overpayments.

The report said the CMS should take several steps to improve both the identification and collection of overpayments, including sharing best practices among the contractors charged with identifying overpayments (Zone Program Integrity Contractors and Unified Program Integrity Contractors). The OIG also recommended implementing a surety bond for home health providers, a move that would ensure that at least some money would come back to the program in case of an overpayment.

The CMS agreed with most of the recommendations, but didn’t take any position regarding the surety bond requirement.

Read my full article here.

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