New Interest Rate for Medicare Overpayments/Underpayments
Providers and suppliers of health care services and supplies to Medicare beneficiaries will pay contractors more in interest for unrecouped overpayments and delinquent underpayments in this third quarter. The Treasury Department recently notified the Department of Health & Human Services (HHS) that the private consumer rate has changed.
The quarterly update to the interest rate for Medicare overpayments and underpayments is 11.50 percent, effective July 18 — up half a percentage point since the second quarter (April 19 – July 17). This interest rate applies to incorrectly paid Medicare Parts A and B claims.
According to Medicare Internet-only Manual (IOM) Pub. 100-06, chapter 4, section 30, interest is generally assessed at the prevailing rate specified by the Secretary of the Treasury unless the overpayment is recouped or the underpayment is paid within 30 days of a final determination. If the provider defaults on an extended repayment agreement, however, the contractor may charge interest on the balance of debt at the prevailing rate in effect on the date of the default, if it’s in their favor.
Refer to the Centers for Medicare & Medicaid Services (CMS) Transmittal 190, issued July 12, for the official notification.