This article is more than 5 years old. Information may no longer be current.
Refund of overpayment
What should a practice do if Medicare overpaid for a certain service?
Click Here to Manage Email Alerts
Facts
During a routine self-audit, the compliance officer of an ophthalmology practice discovered that the practice had been submitting claims for a particular service using the incorrect CPT code. An internal investigation by the billing supervisor revealed that the error was due to a misunderstanding among the staff, and as a result, the practice was paid more than it should have been for the service at issue.
What is the practice’s responsibility to the Medicare program when it discovers it has been overpaid?
An overpayment is any amount a physician or beneficiary receives in excess of the amount payable under the Medicare program. Physicians are liable for overpayments, even if the overpayment is the result of an error by a Medicare carrier, according to the Medicare Carriers Manual. Except in certain instances in which an overpayment is more than 3 years old and was not due to any fault of the physician, overpayments are considered a debt to the United States and must be repaid.
In this scenario, the practice’s compliance officer should undertake or oversee an organized review of all the claims submitted to Medicare that involve the service in question to verify whether the claims were coded appropriately and, if not, the extent of the overpayment. Once a physician knows that he or she has been overpaid, the carrier should be notified immediately in writing.
The letter should set out the basis for the overpayment, the fact that it was identified through an internal compliance review and, if possible, identify the patients affected and dates of service. The letter should include a check for the entire amount of the overpayment or, if the practice is not in a position to repay the entire amount, a partial payment should be enclosed with a proposal for making payment over time. Be prepared, however, for the carrier to respond with a demand for financial information relating to the practice’s ability to pay and the imposition of interest in excess of 13.7% on the outstanding balance. Practices would be wise to borrow funds from the bank to avoid burdensome Medicare repayment schedules.
The practice also must develop a mechanism to refund private payors and patients in connection with improper copayments.
For Your Information:
- Allison Weber Shuren, MSN, JD, can be reached at Arent Fox Kintner Plotkin & Kahn, PLLC, 1050 Connecticut Ave. NW, Washington DC 20036; 202-775-5712; fax: 202-857-6395; e-mail: shuren.allison@arentfox.com.