CMS Fails to Collect Millions in Overpayments, OIG Says

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  • June 1, 2012
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According to the U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG), the Centers for Medicare & Medicaid Services (CMS) failed to collect at least $332.1 million in Medicare overpayments identified during a 30-month period including years 2007, 2008, and the first six months of 2009.

During that time, OIG issued reports recommending that CMS collect approximately $418 million in Medicare overpayments, of which CMS agreed to collect $416 million. The OIG has since sent a letter to CMS Acting Administrator Marilyn Tavenner noting that, by CMS’ own accounting, the agency had collected only $84.2 million of that amount. The OIG was unable to verify that CMS had collected even that amount, however, “because CMS did not have adequate systems for (1) documenting overpayment collections identified in OIG audit reports or (2) detecting data entry errors.”

CMS’ collections were limited because of time constraints imposed by the statute of limitations on overpayment collections (section 1870 of the Social Security Act governs the recovery of overpayments, and bars recovery from providers that are “without fault.” A provider is deemed to be “without fault” three years after the year in which the original payment was made). In addition, the OIG said, CMS “did not provide its contractors with adequate guidance for collecting overpayments and did not have an effective system for monitoring its contractors’ collection efforts.”

Based on its findings, the OIG recommended that CMS:

(1) Pursue legislation to extend the statute of limitations so that the recovery period exceeds the reopening period for Medicare payments;

(2) Ensure that its Audit Tracking and Reporting System (ATARS) is updated to accurately reflect the status of audit report recommendations;

(3) Ensure that CMS staff record collections information consistently in ATARS;

(4) Collect sustained amounts related to OIG recommendations made after our audit period to the extent allowed under the law;

(5) Verify that the $84.2 million reported as collected has actually been collected; and

(6) Provide specific guidance to its contractors concerning the timeframe in which the contractor must take action to collect an overpayment, how to report collections, the type of documentation that the contractor must maintain to substantiate an overpayment collection, and how to report reasons for not collecting overpayments.

In response to the OIG report, CMS said that that it would “explore the possibility of pursuing legislative proposals,” and concurred with the OIG’s second, third, and sixth recommendations. CMS partially concurred with OIG’s fourth recommendation, but did not concur with the fifth recommendation.

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No Responses to “CMS Fails to Collect Millions in Overpayments, OIG Says”

  1. Kathy DiCenzo says:

    It would seem to me that if providers only have one year to file a claim, then CMS should only have one year to collect an overpayment. Isn’t that fair?

  2. Lynn Lewis says:

    If the truth is known, CMS might have collected all of the money. I think that their accounting practices need to be reviewed before they start trying to extend the deadline for collection of overpayments. One thing they need to do is to stop assigning a new ICN # everytime they look at a claim. This is a big problem when trying to follow the claims reviewed under the RAC program.

  3. Peggy Gagliardi says:

    I agree with Kathy DiCenzo that CMS should only have one year to collect an overpayment.
    All these RAC reviews causing appeals, retractions, repaying and hospitals not being able do an adjustment claim greater than 1 year is a disjustice to provider/hospitals. CMS needs to acknowledge that the hospital did perform a service in interest of the health and safety of the patient and some sort of payment is due.