Overpayments are Medicare funds that a provider or beneficiary has received in excess of the amount actually allowed payable under the Medicare statute and regulations. Once a determination of an overpayment has been made, the amount of the overpayment is a debt owed to the United States Government, via HGSAdministrators as one of its Medicare contractors.
24.1 Discovery of an Overpayment
An overpayment may be discovered in one of the following ways:
24.2 Notifying Medicare of an Overpayment
There are three ways that a provider can notify Medicare that an overpayment exists:
a. Unsolicited Return of Money
UNSOLICITED means you have identified the overpayment and voluntarily returned the money before a refund was requested byHGSAdministrators. All UNSOLICITED money should be sent to the address listed below, using the appropriate "Return of Monies to Medicare" Form 8321D/8321-1. Refer to section 24.16 for information about these forms.
If the ENTIRE payment was sent in error, you should return the Medicare check.
If only PARTIAL payment was sent in error, you should send a personal check for the specific overpayment amount.
b. Telephone Notification
You may notify HGSAdministrators of overpayments made by calling the Telephone Appeals Program (TAP) line at (717) 730-1455. The telephone representative will accept up to 10 claims for immediate offset OR will refer the overpaid claims to the correspondence department for processing.
c. Written Notification
Note: Do NOT include a check when sending an inquiry to this address.
Regardless of how you notify Medicare of an overpayment (unsolicited return of money, telephone, or written notification), you must provide the following information:
24.3 Reasons for Overpayment
A provider is liable for an overpayment received unless he/she is found to be "without fault". "Without fault" means that the provider could not have known or been expected to know that this was an overpayment. On the other hand, "with fault" means that the provider should have known or been expected to know that this was an overpayment. Examples of overpayments where the provider could be liable include, but are not limited to, the following:
24.4 Methods of Repayment
Whether the provider, a HGSAdministrators employee, or another entity identifies an overpayment, the overpaid funds must be reimbursed to HGSAdministrators in one of the following ways:
a. Provider Requested Offset
Immediate offset can be initiated at the provider's request. This offset causes the overpayment amount to be withheld from a future check(s). You may notify Medicare that you want immediate offset by calling the TAP line or in writing.
a.1 Telephone Request
You will be advised of the amount to be offset and information on the assessment of interest.
a.2 Written Request
You will receive a letter acknowledging your request to immediately offset the overpaid funds. This letter will include the amount of the overpayment, information on the assessment of interest, and appeal rights.
b. Return of Money
Whether the carrier or the provider identifies the overpayment, the overpaid funds may be returned by check.
If the ENTIRE payment was made in error, the Medicare check should be returned.
If only PARTIAL payment was made in error, then a personal check should be returned for the amount that was overpaid.
Note: A Medicare check made to one account (i.e., the physician group account) cannot be returned to satisfy an overpayment to another account (i.e., the individual physician account).
c. Carrier Initiated Offset
If the overpaid money is not returned within 40 days after the initial notice of overpayment, then Medicare will automatically withhold payment from a future check(s) to satisfy the overpayment and any interest that has accrued. Refer to section 24.7 for information on interest.
24.5 Initial Notice of Overpayment
Medicare's notice of overpayment is also known as a "refund" or "demand" letter. You may receive a notice of overpayment as the result of a beneficiary, provider, primary insurer inquiry or as the result of internal identification of a payment error. The refund letter, informing you that an overpayment has been made, will include the following information:
A copy of the refund letter should accompany the provider's check when returning the overpaid amount as a solicited refund. Even if a notice of overpayment is issued, a provider request for immediate offset can still be initiated to satisfy the overpayment.
24.6 Follow-up Notice of Overpayment
A follow-up notice will be sent 40 to 45 days after the first notification if the overpayment has not been satisfied. This follow-up letter includes a copy of the initial refund letter which informed you when offset would begin and that interest would begin to accrue on the unpaid balance.
24.7 Assessment of Interest
Assessment of interest, as mandated by the Health Care Financing Administration (HCFA), occurs on an overpayment balance that is not satisfied within 30 days of the refund letter (the calculated 30 days includes the date of the refund letter). On the 30th day after the refund letter, interest accrues. Since interest accrual is based on a 30 day period, and the criteria for the providers is actually 29 days after setup, as of the 30th day, two months of interest will be applied. This interest will continue to accrue for each subsequent 30-day period that the overpayment is not satisfied.
24.8 Appeal of the Notice of Overpayment
You may choose to appeal a notice of overpayment. An appeal rights statement will be included in the initial refund letter. You may be offered either the "right to a review" or the "right to a fair hearing", based on the amount of the overpayment.
A "right to review" is available when the overpayment amount is $99.99 or less.
A "right to a fair hearing" is available when the overpayment amount is $100.00 or more. T
Please reference chapter 18 for additional information on requesting a review or a fair hearing.
Note: An appeal request (review or fair hearing) does not delay offset or cease the assessment of interest.
24.9 Withheld for Offset
The Medicare provider voucher has a "OFFSET DETAILS" field. This field can be used for three different reasons:
EXAMPLE: Medicare requests a refund for payments made for services provided to Jane Doe. This money was not returned so the debt waswithheld for offset on claim payments for John Smith and Bill Jones.
EXAMPLE: Medicare receives a claim from Dr. Smith on January 15, 1999. The claim finishes processing on February 23, 1999. Interest will be paid to Dr. Smith for the claim.
EXAMPLE: Medicare receives a claim from Dr. Miller on a April 27, 1999. The date of service for the claim is March 9, 1998. Any payment for that claim will be reduced by 10%.
A Offset Details: This field displays the reason for the offset. A two letter code is shown.
B FCN: This displays the financial control number or the accounts receivable number.
C HCI: This field displays the health insurance claim number of the patient who caused the offset.
D Act/Name: The field displays the provider's patient account number and name of the patient if available.
E Amount: The total amount applied.
24.10 Aggregation of Overpayment Amounts
The Health Care Financing Administration (HCFA) mandates how and when carriers should request a refund for an overpaid service(s). HGSAdministrators will inform a provider of an overpayment, regardless of the overpayment amount unless the overpayment amount is internally identified. If the amount of the overpayment is under the mandated tolerance level, you may return the money, but Medicare does not apply offset to an account if the INDIVIDUAL overpayment amount is less than the mandated tolerance level. However, if the money is not returned, we will monitor the account to determine if the individual overpayment amounts can be AGGREGATED to meet the tolerance level. Overpayment amounts may be aggregated for claims involving different beneficiaries.
a. Mandated Tolerance Levels for Providers
Once the tolerance level is met by aggregating individual overpayment amounts, a new refund letter for the aggregated amount will be issued. This new refund letter will include an attachment identifying for the individual amounts that did not initially meet the tolerance level. As a result of the new refund letter, if the money is not returned to Medicare, we will offset the debt by withholding payments of future claims until the debt plus applicable interest is satisfied. This new refund letter can include any under tolerance overpayment amounts initially identified internally.
24.11 Extended Repayment Plans
Extended Repayment Plans (ERPs) are an option of returning overpaid money to Medicare. This is a last alternative of repayment of a debt. However, certain criteria must be met in order to pursue repayment by this method. This criteria includes:
If repaying an overpayment would cause financial hardship, and you wish to pursue an ERP, contact: Medicare Overpayment & Recovery at (717) 730-1810.
24.12 Uncollectible Overpayments
Overpayments that are not refunded or recovered through offset will be referred to the Health Care Financing Administration for collection.
24.13 Overage Checks
An overage check is issued when Medicare must return money that a provider erroneously sent to the carrier on a personal check. Overages can be issued for the following reasons:
24.14 Tax Levies
Medicare Part B payment to beneficiaries, physicians or other providers of service is subject to attachment under a tax levy. A tax levy is served by the United States Internal Revenue Service (IRS). In the event that this occurs, a letter is sent to the provider immediately to make him/her aware that a levy has been served.
The IRS will send the Notice of Levy directly to the carrier involved. The carrier, in turn, must notify the Health Care Financing Administration Regional Office having jurisdiction over the carrier with a statement as to the disposition of the levy.
If the carrier determines a provider overpayment exists, the carrier must offset current claims for all money due prior to honoring the tax levy.
24.15 Garnishment of Funds
In the event Medicare is advised to withhold funds, an account is established for the estimated amount owed. This does not happen frequently; however, should the provider have any concerns, a call should be made to the respective office that identified an amount is owed. There are several reasons why this type of activity can occur:
When any provider in Pennsylvania files for bankruptcy, HGSAdministrators must be notified immediately by copy of the original Voluntary Petition Bankruptcy
By doing this, the carrier cannot take any recovery action on any outstanding overpayments without consulting the Health Care Financing Administration's Office of General Council. In most instances, each case is handled on an individual basis, pending any court orders or directions from the Office of General Counsel. If there should be a motion for dismissal, our office should be notified immediately.
24.17 Return of Monies Forms
To facilitate prompt and accurate credit of "unsolicited" monies to Medicare, forms 8321H and 8321-1D have been developed for physicians and suppliers. Please use the appropriate form when a check or partial payment is received in error. Form 8321H is for returning of money that is not related to Medicare Secondary Payer (MSP). Form 8321-1D is for returning money for MSP related issues. Form 4323 can be used when returning monies for Security 65/65 Special. Refer to the following pages for a sample of these forms.
If you do not have a form available at the time, monies should still be returned to the Cashier-Medicare. Include information as outlined in Section II.
a. Medicare’s Definition of Advance Payment
Advance payment is a carrier’s conditional partial payment to a provider on a Medicare Part B claim that the carrier is unable to process within the dictated time limits (i.e., claim system problems, etc.).
b. Request for Advance Payment
When an advance payment is requested, it is incumbent upon the carrier to review the reason why the provider is in need of such a request. As noted in the Federal Register, Volume 61, 42 CFR, 421.214, the provider must include the following information:
1. A written request
from the provider with detailed information supporting the reason for delayed
payment is due to the carrier’s processing error.
2. The amount the provider is requesting for payment.
HGSAdministrators must confirm that the provider:
1. Is not under Medical Review or Program Integrity Investigation;
2. Has no outstanding Medicare overpayments;
3. Has not been delinquent in repaying any outstanding overpayments involving Medicare claims;
4. Accepts assignment on all claims submitted within the past 180 days preceding the request or system malfunction;
5. Agrees to the offset of all future claim payment(s); and
6. Maintains an assignment rate on claims submitted during the carrier’s processing issue that is equal to or greater than the rate of the 180 day period prior to the request.
If none of the above
circumstances exist, the carrier can proceed with the processing of the advance
payment request.All Advance Payments are calculated at no more than 80% of the
historical assigned claim payment data. The historical data represents a 90 day
claim payment trend within the previous 180 days.
Prior to final approval of an advance payment, a letter is sent to the Health Care Financing Administration (HCFA), Regional Office to request final approval of the request .
Upon receiving HCFA’s response of concurrence or disapproval, the provider is immediately notified.
Should an advance payment be granted, the provider will be issued a notification form which must be signed by the provider prior to issuing payment. This binds the provider to remit payment through offset as soon as claims begin to process to satisfy the amount owed to Medicare. Upon full recovery of the debt, the HCFA Regional Office is notified.