CMS Updates Provider Rights Policy by Limiting Recoupment of Overpayments

CMS; Medicare

Recently, the Centers for Medicare and Medicaid Services (CMS) published MLN Matters article MM11262 that summarizes updated guidance issues to Medicare contractors in Change Request CR11262 / Transmittal number R12261FM. This change updates provider rights and procedures in the Medicare Financial Management Manual during the first two stages of the appeals process.   

Provider business office and appeals staff should review these updates that will be effective and implemented on December 11, 2023.  

Section 1893(f)(2)(a) of the Social Security Act prohibits recouping Medicare overpayments from a provider or supplier that seeks a reconsideration from a Qualified Independent Contractor (QIC). These statutes and a related final rule provide for: 

  • Changing the payment method for interest payments to a provider or supplier when subsequent administrative or judicial levels of appeal reverse the overpayment. 
  • Defining the overpayments to which the limitation applies, how the limitation works in concert with the appeals process, and the change in the CMS obligation to pay interest to a provider or supplier whose appeal is successful at levels above the QIC. 
  • Limiting recoupment of Medicare overpayments when a provider seeks a redetermination until Medicare renders a redetermination decision. 

The statute requires CMS to change the way the Agency and its contractors recoup certain overpayments. The limitations on the recoupment of Medicare overpayments are during the first and second levels of appeal only. During this period, providers may request an extended repayment schedule (ERS) or elect to have Medicare collect the overpayment immediately. 
However, after the provider completes the first two levels of appeal, MACs will resume recoupment and normal debt collection processes. Unless a provider establishes an ERS, the MAC must initiate or resume recoupment at 100% after the second level of appeal regardless of any subsequent appeals the provider files, such as the third level (the Administrative Law Judge, or subsequent levels, Department Appeals Board or Federal Court). The MAC will continue to recoup at 100% until the debt is satisfied in full. 
Part of CR 11262 is a revision to the Medicare Financial Management Manual. The changes to Chapter 3 – Overpayments, include: 

  • Section 200.2.6: Contains information about the ERS and appealing an overpayment subject to the limitation on recoupment. 
  • Section 200.3.1: Discusses details after a favorable, whether full or partial, or unfavorable redetermination decision. 
  • Section 200.4​: Lists the actions a Qualified Independent Contractor (QIC) and the MAC will take upon getting a validated reconsideration request. 

Template letters will be sent to providers in the situations discussed for reference.