Medicare and Medicaid overpayments are pretty common. If they are not dealt with properly, they invite penalties.
Medicare and Medicaid Overpayments happen when a person, provider or supplier receives a payment that is in excess of the amount due to him or her under Medicare statutes and regulations. This overpayment becomes a federal debt that is owed by the individual to the State. So, Centers for Medicare and Medicaid Services (CMS) is required by federal law to recover this amount.
Overpayments routinely occur in Medicare and Medicaid. Many a time, these are unintended and are usually a result of oversight, but could also happen due to intent. Some of the most common reasons for which Medicare and Medicaid overpayments occur can be when:
Obamacare has amended the federal False Claims Act (FCA), which is part of the Fraud Enforcement Recovery Act of 2009 (FERA), to add provisions relating to recovery of Medicare and Medicaid overpayments. This is how the process of Medicare and Medicaid overpayments works:
Whenever Medicare comes to know that any overpayment of $10 (raised to $25 from July 2014) or more is made, it directs the Medicare Administrative Contractor (MAC) to initiate the process of recovery of this overpayment. The MAC starts the process by initially mailing a demand letter in which repayment is requested
If no action is taken, a second and third demand letters are mailed in a month following the first one.
The demand letter sent by the MAC will explain the details of the Medicare and/or overpayment. When repayment is not made in full within 30 days, interest starts getting accrued on the owed money. The party can request either an Extended Repayment Schedule (ERS) or an immediate recoupment. The party can also rebut or appeal against a Medicare and Medicaid overpayments claim.
The Federal government expects individuals, providers or suppliers who have received Medicare or Medicaid overpayments to report and then return the excess payment to the requisite authority within 60 days of the identification of a Medicare and/or Medicaid overpayment. The reason for the overpayment has to be stated.
When Medicare and Medicaid overpayments are not reported in the correct manner and within the set deadline, such a person, provider or supplier could be penalized to the extent of three times the due amount in damages, and/or any of these: