OIG Calls Out CMS for Shoddy Job of Collecting Millions in Medicare Overpayments

Long-term care providers on the receiving end of Medicare overpayments in 2007 may not have to worry too much about getting a knock on the door from a collection agency, if a recent Office of Inspector General (OIG) audit is any indication of the Centers for Medicare & Medicaid Services’ (CMS) efforts to regain those funds.

In 2007, CMS made millions of dollars of overpayments to Medicare providers and CMS contractors, but providers who benefitted from the surplus reimbursements may be able to breathe a sigh of relief as the Office of Inspector General reports that CMS has been ineffective in collecting overpayments and did a shoddy job of documenting the overpayments it says it collected. 

Audit reports conducted by OIG show $416.3 million in overpayments, and CMS says it collected $84.2 million of that, but “for various reasons” did not collect the remainder. 

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“CMS’s collections were limited because of time constraints imposed by the statute of limitations on overpayment collections,” says OIG. “In addition, it did not provide its contractors with adequate guidance for collecting overpayments and did not have an effective system for monitoring its contractors’ collection efforts.”

OIG was unable to verify the amount CMS reports it recovered, and identified inaccuracies in the reported amount, mostly because CMS didn’t have an adequate system for documenting overpayment collection or detecting data entry errors.

The inspectors made several recommendations to CMS:

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  1. Pursue legislation to extend the statute of limitations so that the recovery period exceeds the reopening period for Medicare payments;
  2. Ensure that its Audit Tracking and Reporting System (ATARS) is updated to accurately reflect the status of audit report recommendations; 
  3. Ensure that CMS staff record collections information consistently in ATARS;
  4. Collect sustained amounts related to OIG recommendations made after our audit period to the extent allowed under the law;
  5. Verify that the $84.2 million reported as collected has actually been collected; and
  6. Provide specific guidance to its contractors concerning the timeframe in which the contractor must take action to collect an overpayment, how to report collections, the type of documentation that the contractor must maintain to substantiate an overpayment collection, and how to report reasons for not collecting overpayments.
While CMS said it would explore the possibility of the first recommendation and agreed with the second, third, and sixth recommendations, it only partially agreed with the fourth suggestion and did not agree to verify the amount it says it has already collected.

Written by Alyssa Gerace

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