CMS Overpayment Demands and Collections Matters

The Affordable Care Act affirmatively requires a health care provider who has received an overpayment to return such amount within 60 days after it has been identified. Returning an overpayment past the 60 day notice period becomes a violation of the Federal False Claim Act. An “overpayment” includes any amount that a person returns or receives under Medicare of Medicaid that is not entitled.

The normal procedure that is followed by CMS is to recoup overpayments against future payments that are due to the provider. If CMS initiates the process, it will normally start with the issuance of a demand letter. Outstanding overpayment obligations may be referred to the Department of Treasury for collection following written notice to the provider. In some cases, private collection firms might also be used.

Providers can often work out extended repayment plans with private collection agencies, treasury, or directly with CMS. There are also opportunities to compromise some overpayment claims.

There is no statute of limitation for recoupment or offset of claims. There is a 6-year statute of limitations on affirmative actions to collect on overpayment.

In some cases, providers can be liable for the overpayment liabilities of entities that the purchase under the theory of successor liability. Medicare does not change a high rate of interest on overpayments that remain outstanding.