Report: CMS Unlikely To Recover More Than $500M in Overpayments
CMS identified more than $500 million in improper Medicare payments in 2010 but never recouped much of that money, according to a report released Tuesday by HHS' Office of Inspector General, USA Today reports (Kennedy, USA Today, 7/2).
In 2010, CMS identified a total of $9.6 billion in Medicare overpayments to health care providers. Of that, $543 million was classified as "currently not collectible," which includes Medicare overpayments made to providers who:
- Have filed for bankruptcy;
- Gone out of business; or
- Have not updated their address.
After analyzing data from the seven private companies contracted with Medicare to process payments, OIG found that 97% of CNC overpayments had not been recovered within one year.
According to the private Medicare contractors, CNC debt typically is hard to collect because CMS does not provide up-to-date information about the providers, which causes many of letters demanding repayment to be returned to sender. Further, the contractors say many hospitals reject the letters because they prefer them to be sent to the headquarters of their health system (Carlson, Modern Healthcare, 7/2).
The report noted that CMS updated to a new accounting system that does not extract data automatically, which resulted in some information about contractors and providers being lost. The report noted that Medicare staff entered only a summary of each bill in its new system. According to the report, Medicare officials said it would take thousands of hours to re-enter data on health care providers into the new system.
CMS said it is the responsibility of the provider to update its information. In the past, providers were more likely to keep their information up-to-date because Medicare would send checks to the address on file. However, most providers now use direct deposit, so keeping their contact information current has become less of a priority.
The OIG report concluded that it is unlikely CMS will ever collect the $543 million in overpayments made in 2010 because of the inaccurate data (USA Today, 7/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.