Document 6546452

MEDICARE
A CMS Medicare Administrative Contractor
http://www.NGSMedicare.com
Jurisdiction B Supplier Manual: Chapter 21
September 2014 Update
Overpayments
Overview
Overpayments are Medicare payments a supplier has received in excess of amounts due and payable under the
statute and regulations. This may be due to the following:
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Payment for supplier services after benefits have been exhausted, or where the individual was not
entitled to benefits
Payment for noncovered items and services, including medically unnecessary services furnished to an
individual
Duplicate processing of charges/claims
Primary payment for items or services for which another entity is the primary payer
Once a determination of an overpayment has been made, the amount is considered a debt owed by the debtor to
the United States Government and the contractor must attempt recovery of the overpayment in accordance with
the CMS regulations. The CMS requires the contractor to request refunds on overpayments of $10 or more. Note:
We request refunds on all MSP overpayments because a threshold does not apply.
The Federal Claims Collection Act requires timely and aggressive efforts to recover overpayments, including
efforts to locate the debtor where necessary, demands for repayment, establishment of repayment schedules,
and recoupment or offset where appropriate.
An offset is when Medicare reduces any payments the supplier is receiving by the amount of an outstanding
refund.
Overpayment Refunds
An overpayment refund request can be initiated by the contractor or voluntarily issued by the debtor.
DME MAC Initiated Demand Letters
The DME MAC ORU receives referrals for refunds from the Provider Contact Center,
redeterminations/reopenings, Recovery Auditor, CERT and the ZPIC. If, after reviewing the referral, ORU
determines that a supplier has been overpaid, a refund request will be sent to the supplier. An initial demand letter
(i.e., overpayment letter) is issued and includes the following information:
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Patient name
Patient’s HICN
CCN
DCN, and
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Reason for the recovery action
The demand letter will identify the services that triggered the overpayment process. Two items in the demand
letter warrant immediate attention; one is the 11-digit DCN. You must reference the DCN in any communication
with us. The DCN is used to track the overpayment.
The second is the self-addressed envelope which is enclosed with the demand letter; please use this envelope to
send a check or money order so that proper action will be taken.
You have 30 days from the date of the demand letter to refund the DME MAC. If we have not received the refund
within this 30-day period, interest begins to accrue against the refund amount.
Supplier Voluntary Refunds
All voluntary refunds should be sent to our ORU Department as soon as discovered. The Overpayment Recovery
Unit Jurisdiction B DME MAC Overpayment/Voluntary Refund Form was developed to simplify the return of
refunds. Even though a refund check may involve more than one Medicare patient, a separate form should be
completed for each patient. The form must be completed and included anytime voluntary refunds are made to
Medicare.
When submitting a voluntary refund, please make the check payable to National Government Services. The
following information must be included if you do not use the suggested voluntary refund form:
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A PTAN or NPI
A copy of the supplier remittance
o If no supplier remittance is available, provide the date(s) of service(s) and include the
procedure code(s)
• The reason for the refund (be specific as to the reason)
• The patient’s name and HICN, i.e., Medicare identification number
• The claim number
To fax or mail a request, please complete the Overpayment Recovery Unit Jurisdiction B DME MAC
Overpayment/Voluntary Refund Form. Fax a completed copy of the form to 317-595-4873 or mail to:
National Government Services, Inc.
NGS - 17003 DME MAC Non-MSP
P.O. Box 809305
Chicago, IL 60680-9305
Note: If you opt to fax the form, you do not need to fax a copy of the check. You will receive the initial demand
letter and at that time may submit the payment as instructed in the letter. Suppliers who fax the form should not
mail the form with payment.
Medicare Secondary Payer Refunds
When an overpayment involves MSP, the refund checks and correspondence must be sent to the following
address with the Medicare Secondary Payer Jurisdiction B DME MAC Voluntary Refund Form.
National Government Services, Inc.
17003 DME MAC MSP
P.O. Box 809273
Chicago, IL 60680-9273
National Government Services, Inc.
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When sending documentation, suppliers should consider the Privacy Act of 1974 and the HIPAA Privacy Rule.
PHI is included in these records and all avenues should be taken to safeguard PHI.
Note: The acceptance of a voluntary refund as repayment for the claims specified in no way affects or limits the
rights of the Federal Government, or any of its agencies or agents, to pursue any appropriate criminal, civil, or
administrative remedies arising from or relating to these or any other claims.
Related Content
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Medicare Secondary Payer Jurisdiction B DME MAC Voluntary Refund Form
Overpayment Recovery Unit Jurisdiction B DME MAC Overpayment/Voluntary Refund Form
The Offset Process
Contractor Initiated Offset
When an overpayment is not paid in full by the 40th day from the date of the initial demand letter, the offset
process is started. Future payments will be offset until the overpayment is recouped (paid in full).
Medicare will also take interest on the overpayment amount. Interest accrues every 30 days on the unpaid
principal. The offset will be reported to the supplier on the remittance notice by a FCN. No other written notices
will be sent. The FCN on the remittance notice will match the DCN on the initial demand letter. No other details
identifying the offset will be given on the remittance notice. The offset and interest charges will continue until the
full refund amount is recouped.
Note: The FCN is found in the “Offset Detail” line of the supplier remittance notice.
Supplier Requested Immediate Recoupment
Once a demand letter is received by the supplier, a request for an immediate offset can be made. The ORU has
developed the Immediate Recoupment Request Form for you to utilize when a demand letter has been received
and you wish for the DME MAC to take the money back via an offset versus sending a check or money order.
You may not submit a request for immediate offset when submitting a voluntary overpayment. Again, this request
can only be made once a demand letter has been received.
You are offered two options when requesting an immediate recoupment:
1. A request on the specific overpayment addressed in the demand letter. OR
2. A one-time request on the specific overpayment and all future overpayments.
If you choose option 2, you may at any time withdraw your request for all future overpayments by completing the
Immediate Recoupment Request Form.
When you choose option 2, future overpayments will be collected via immediate offset however, you will still
receive the initial demand letter. The claims will be adjusted in order to show the overpayment. You will receive a
remittance notice for the adjusted claim and a remittance notice for the offset. These may be different notices.
If you have requested an immediate offset but there are no claims for the recoupment within thirty days, interest
will be assessed. If the full amount of the overpayment, including any assessed interest, cannot be recovered
through the offset process, additional collection steps may be taken.
To fax or mail a request, please complete the Immediate Recoupment Request Form. Fax a completed copy of
the form to 317-913-6307 or mail to:
National Government Services, Inc.
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National Government Services, Inc.
DME MAC Overpayment Recovery Unit
P.O. Box 7027
Indianapolis, IN 46207-7027
To submit an immediate offset request by email, complete the Immediate Recoupment Request electronic email
form. Complete the form in its entirety and submit.
Related Content
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Immediate Recoupment Request Form (Hardcopy)
Immediate Recoupment Request Form (Electronic)
Collecting Against Surety Bonds
If the offset does not compensate for the overpayment, ORU is able to proceed with a claim against the supplier’s
Surety Bond. ORU makes a telephone call to the supplier to request payment on the outstanding overpayment. If
there is no response to the telephone call, National Government Services sends an Intent to Refer letter to the
supplier, stating that the supplier has 60 days to make a full refund or request a formal repayment schedule.
Otherwise, the case will be transferred to the Department of the Treasury's DCC.
If ORU has been unable to collect on an outstanding debt, a claim may be placed against the supplier’s Surety
Bond.
Based on CMS Change Request 7167 and related MLN Matters article, a surety must pay the CMS within 30
days of receiving written notice to do so—the following amounts up to the full penal sum of the bond:
1. The amount of any unpaid claim, plus accrued interest, for which the DMEPOS supplier is responsible;
and
2. The amount of any unpaid claim, CMP, or assessment imposed by CMS or the OIG on the DMEPOS
supplier, plus accrued interest.
Related Content
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Claims against Surety Bonds for Suppliers of Durable Medical Equipment (DME), Prosthetics, Orthotics
and Supplies (DMEPOS)
Appealing a Refund
If you disagree with an overpayment request, then an appeal request may be initiated through the first level of the
appeals process, a redetermination. However, if the overpayment was initiated as a result of a redetermination,
then you must request a reconsideration to be conducted by the QIC, which is the second level of the appeals
process.
When the initial demand letter is received and the letter is requesting a refund, you should immediately refund the
amount requested and then file an appeal, if necessary. This will help you avoid an offset with interest charges
from accruing.
The demand letter will have detailed instructions on how to file an appeal.
National Government Services, Inc.
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Limitation on Recoupment
Section 935 of the MMA, which amended Title XVIII of the Social Security Act Section 1893 paragraph (f),
changed the supplier overpayment recoupment process. The suppliers can request a first level appeal subject to
935. When a valid first level appeal request (redetermination) or a valid second level (reconsideration) request is
received from a supplier on an overpayment subject to these limitations the Medicare contractor will cease
recoupment or not begin recoupment at the normally scheduled time (76 days for first level and 30 days for
second level). During this appeal process, the Medicare contractor cannot recoup or demand the debt; however,
the debt continues to age. Once both levels of appeal are completed and the CMS prevails, collection activities,
including demand letters and internal recoupment, may resume within the timeframes set forth.
If an overpayment is appealed and recoupment stopped for the first and second level appeal, the Medicare
contractor shall continue to collect other debts owed by the suppliers but may not withhold or place in suspense,
any monies related to this debt, while it is in the appeal status. Whether or not the supplier subsequently appeals
the overpayment to the ALJ, the Medicare Appeals Council, or federal court, the Medicare contractor will continue
to recoup until the debt is satisfied in full.
For additional details on this process, refer to the Related Content resources.
Related Content
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CMS IOM Publication 100-06, Medicare Financial Management Manual, Chapter 3, Section 200 (890 KB)
MM6183 – Revised Limitation on Recoupment (935) for Provider, Physician and Suppliers Overpayments
Extended Repayment Plans
If you receive an overpayment recovery demand letter from National Government Services and you believe the
amount owed to Medicare will cause financial hardship, you may submit a request for an ERP. An ERP may be
established to recover part or all of the overpayment. When a repayment plan is used to recover part of an
overpayment, the contractor recovers the remainder of the overpayment by withholding interim payments, offset
of monies due the debtor, or from lump-sum payment by the provider. Any approved ERP will run from the date of
the initial demand letter. If you believe you meet the criteria for an ERP, please submit the required
documentation outlined in the Extended Repayment Plan Supporting Documentation Request Form.
Please reference the CMS IOM Publication 100-06, Medicare Financial Management Manual, Chapter 4,
Sections 40 and 50 for complete details on the process for establishing an ERP.
If you have questions regarding extended repayment plans, please contact our Provider Contact Center at 866­
590-6727.
Related Content
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Extended Repayment Plan Supporting Documentation Request Form
CMS IOM Publication 100-06, Medicare Financial Management Manual, Chapter 4, Sections 40 and 50
(1.27 MB)
Lost or Mutilated Checks
When a check is lost, a written request for replacement should be sent to the ORU after 30 days has elapsed
from the date of issue. The ORU will review bank records and upon identification that the check has not been
cashed, they will stop payment and reissue a check. When a check has been damaged in the mail and cannot be
cashed, the check should be returned to the ORU for reissue. The ORU address is:
National Government Services, Inc.
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National Government Services, Inc.
17003 DME MAC Non-MSP
P.O. Box 809305
Chicago, IL 60680-9305
Change of Address
When a supplier changes their address, the NSC must be notified. The NSC may be reached at 866-238-9652, or
visit their website.
The NSC will update address files at the DME MAC. If the address file is not updated, cash flow will be
interrupted. Medicare checks will not be forwarded by the post office. Returned checks are voided and the money
placed in escrow. The DME MAC notifies the NSC of the returned check and the NSC, depending on the
situation, will contact the supplier by phone or letter. If the supplier does not respond to the NSC within 30 days,
the supplier’s NPI is inactivated. No payments will be issued until the NSC updates the DME MAC records. When
the supplier contacts the NSC, the suspension will be lifted. The NSC will notify the DME MAC of the update for
payments to be reissued along with the remittance notices.
Related Content
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NSC Website
National Government Services, Inc.
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