Medicare Overpayments: Can I Keep the Money?

January 25, 2016
Rick Gawenda

Occasionally, providers of therapy services may receive an overpayment from the Medicare program for which they are not entitled to keep. Providers may not know of this overpayment until they receive notice from their Medicare Administrative Contractor. There are also times when the provider of therapy services may be the one who notices the overpayment. In either instance, what must the provider do? In this article, I will answer the following questions:

  1. Why do overpayments occur?
  2. What is an overpayment?
  3. What is my responsibility if I realize I have received an overpayment?
  4. What is the collection process for my Medicare Administrative Contractor to recoup the overpayment?
  5. What are my options if I receive a demand letter?
  6. What are my payment options?
  7. Can I stop the Medicare Administrative Contractor from recouping the overpayment?

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  1. You made this statement above: An overpayment would consist of payment of $25.00 or greater that you, the provider, were not entitled to. Our practice was under the impression that you had to refund any and all over payments to Medicare and any other government payers no matter the amount even less than $1.00. I read the CMS article you referenced and did see this statement anywhere. Is there somewhere else this is in writing by CMS?

    1. I have attached another link at the bottom of the post for you to read. Read page 2 and this is where it states your MAC will initiate the overpayment recovery process for $25.00 or greater. Above that, it also states the following: “Civil monetary penalties may apply if you know of an overpayment and do not properly report and return it.”

      Hope this helps you!