Press Releases

Medicare Proposes New Steps to Protect Taxpayer Dollars

Affordable Care Act Gives CMS New Authority To Recover Overpayments From Providers and Suppliers More Quickly

The Centers for Medicare & Medicaid Services (CMS) today proposed that providers and suppliers must report and return self-identified overpayments either within 60 days of the incorrect payment being identified, or on the date when a corresponding cost report is due – whichever is later.

The new announcement is one in a series of steps Medicare is taking to protect taxpayer dollars, including efforts to prevent overpayments from occurring. These efforts include letting private auditors working on behalf of Medicare catch wasteful spending before it happens, by expanding the use of Recovery Audit Contractors; testing changes to outdated hospital billing system to help prevent over-billing; and changing processes for approving payments for medical equipment with high error rates.

“It is critical that we are wise stewards of taxpayers’ dollars,” said CMS Acting Administrator Marilyn Tavenner.  “Thanks to the Affordable Care Act, we have new authority to help protect and preserve the Medicare Trust Funds.

A Medicare overpayment means any funds that a person receives or retains under Medicare to which the person is not entitled.  Examples of overpayments in Medicare include the following:

• Duplicate submission of the same service or claim; 
• Payment to the incorrect payee;
• Payment for excluded or medically unnecessary services; or
• Payment for non-covered services.

Before the Affordable Care Act, providers did not face an explicit deadline for returning taxpayers’ money. Thanks to the Affordable Care Act, there will be a specific timeframe by which overpayments must be reported returned.   Any failure to report and return the overpayment within the applicable time frame could be a violation of the False Claims Act.   Providers also could be subject to civil monetary penalties or excluded from participating in federal health care programs for failure to report and return an overpayment.

CMS has already been receiving these overpayments under the Affordable Care Act.  CMS has directly received approximately $5 million in such overpayments and contractors are also receiving a substantial number of overpayments.   

This proposed rule was issued the same day that the Obama Administration announced that the Health Care Fraud and Abuse Control Program had recovered $4.1 billion in Fiscal Year 2011 from anti-fraud efforts, while the Department of Justice opened 1,110 new criminal health care fraud investigations involving 2,561 potential defendants.

For more information on today’s announcement on the Health Care Fraud and Abuse Control Program, please visit: http://www.hhs.gov/news/

For more on how the Affordable Care Act provides more resources to protect taxpayer dollars in Medicare and Medicaid, please visit: http://www.cms.gov/About-CMS/Public-Affairs/MediaReleaseDatabase/Fact-Sheets/index.html