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(c) 2014 Jon L Gelman, All Rights Reserved.

Wednesday, July 3, 2013

Medicare Classifies Over 9.6 Billion Each Year as Overpayments-Some Are Uncollectible

CMS identifies billions of dollars in Medicare overpayments to health care providers each year. In fiscal year (FY) 2010, overpayments totaled $9.6 billion. However, not all overpayments are recovered. 

Overpayments for which the provider has not made a repayment for at least 6 months after
the due date on the Medicare demand letter are classified as "currently not collectible" (CNC) and are not reported on CMS's annual financial statements. These overpayments are not reported on the financial statements because they are likely not to be recovered.

CMS reported $543 million in new CNC overpayments across all contractors in FY 2010. However, CMS provided detailed information on $69 million in CNC overpayments for only seven contractors. Citing contractor transitions, CMS did not provide detailed data for the remaining 32 contractors. For 54 percent of CNC overpayments associated with the seven contractors, the provider type was missing in HIGLAS. For the seven contractors, 97 percent of FY 2010 CNC overpayments were not recovered. According to contractors, inaccurate provider contact information delays or prevents some overpayment demand letters from reaching providers. In addition, CMS and contractors reported that expanding the types of provider identifiers used to recover payments could improve debt collection efforts.