Overpayments
An overpayment occurs when Medicare pays more than the correct amount, often due to the following: Duplicate submission of the same service Payment to the incorrect payee Payment for excluded or medically unnecessary services Payment made as primary insurer when Medicare should have paid as secondary insurer All Medicare payments, correct and incorrect, are transmitted to the Internal Revenue Service (IRS). If the payee is incorrect, Medicare must request return of the monies and reprocess the services correctly. Physicians must also take specific steps when overpaid by Medicare.
Physician Responsibilities in an Overpayment Situation
If Medicare pays more than the correct amount in error, the overpayment should be refunded as soon as possible, without waiting for notification. The local carrier can provide information regarding where to mail the refund. The following must be included with the refund:
* The provider number (and that of the provider who should be paid, if applicable)
* The Medicare number of the patient(s) in question, date of service, and amount overpaid
* A brief description of the reason for the refund
* A copy of the remittance notice, highlighting the claim(s) at issue
* A check for the overpaid amount
If Medicare Discovers an Overpayment Before Refund is Made
Medicare will send a letter listing the service(s) at issue, why the overpayment occurred, and the amount being requested. The physician will have 30 days from the date of the letter to mail a refund to the address in the letter. If the refund is not received within 30 days from the date of the first letter, a second letter will be sent and the balance due will be satisfied by withholding future claim payments until the overpayment is paid in full (otherwise known as “ offset ” ). When Medicare notifies the physician of an overpayment, and multiple claims are involved, the letter will describe all over- paid claims.
Physician Disagreement with the Overpayment
The physician has the right to appeal the decision if he or she disagrees with the overpayment. How- ever, submitting an appeal does not prevent an offset. An explanation of why he or she believes the overpayment to be incorrect should be included with the appeal.
Medicare Collects Interest on Unpaid Overpayments
Medicare is required to collect interest on overpayments not satisfied within 30 days from the date of the initial refund request letter.
