OIG: CMS Reported Collecting Only Half of Medicare Overpayments

CMS reported collecting only half of the $498 million in Medicare overpayments identified by the Office of Inspector General (OIG), according to an OIG audit.

The OIG audit was a follow-up to a previous audit, in which OIG found reporting inaccuracies regarding CMS and the Medicare overpayments it collected.

OIG had identified $416 million in Medicare overpayments in March 2009 and determined that CMS did not recover $332 million of those overpayments. In addition, CMS reported collecting $84 million of the overpayments, but OIG could not verify that to be true.

The recent audit was conducted to determine the extent to which CMS recovered Medicare overpayments for a more recent period and to establish whether CMS followed previous recommendations from OIG.

OIG reviewed 148 Medicare audit reports issued between October 1, 2014, and December 31, 2016. OIG identified $498 million in Medicare overpayments from the audit report, which CMS agreed to collect.

OIG reviewed supporting documentation from CMS for the audit reports and discussed prior audit recommendations with CMS staff.

According to the audit, CMS reported that it had collected $272 million in Medicare overpayments, or 55 percent of the $498 million identified by OIG. The agency said that it had not recovered the remaining $226 million.

CMS provided documentation showing that it collected $120 million of the reported $272 million but did not have proof that it collected the other $152 million.

Additionally, the audit found that CMS did not follow all of OIG’s past recommendations. OIG had made six recommendations and CMS agreed to implement four of them. However, the agency only implemented two, partially implemented one, and did not implement the other.

As a result of the audit findings, OIG proposed several recommendations. First, OIG recommended CMS continue its efforts to recover the $226 million remaining in uncollected Medicare overpayments. CMS should also determine how much of the $152 million lacking documentation was collected and recorded in its accounting system.

OIG also recommended that CMS revise 42 CFR section 405.980 and corresponding instructions related to the reopening period for claims to be consistent with statutory provisions contained in the Social Security Act.

OIG advised CMS to develop a plan for resolving cost reports applicable to the audit reports. OIG made other procedural recommendations as well.

CMS only concurred with one of the nine recommendations, OIG said. The agency agreed to continue efforts to recover the $226 million in Medicare overpayments and inform OIG of any additional collections.

CMS did not concur with seven recommendations and did not state whether it concurred or did not concur with one request.

Medicare overpayments occur when payments made to providers exceed amounts due and payable according to existing laws and regulations. According to CMS, Medicare overpayments can happen due to incorrect coding, insufficient documentation, medical necessity errors, and processing and administrative errors.

A past OIG audit found that Medicare consistently overpaid for chronic care management services in 2017 and 2018, incurring millions in costs for Medicare and its beneficiaries.