Audit Shows CMS Slow to Collect $498M in Medicare Overpayments

HHS OIG says CMS has not properly documented more than half of overpayment collections it claims to have made.

Federal watchdogs say the Centers for Medicare & Medicaid Services still has not collected the nearly $500 million in Medicare overpayments identified in audits over a two-year period dating back to 2014.

The Office of the Inspector General at the Department of Health and Human Services did a follow-up review of 148 Medicare audits it conducted between October 1, 2014, and December 31, 2016, and could verify that CMS had collected only $120 million of the $498 million in overpayments.

CMS told auditors that it has collected $272 million (55%) of the overpayments. However, OIG says the agency’s documentation shows that it had collected only $120 million, and that CMS failed to properly document the recovery of the remaining $152 million.

“In addition, CMS did not take corrective action in response to all of the recommendations made in our prior audit report, Obstacles to Collection of Millions in Medicare Overpayments,” OIG said.

“In that audit report, issued on May 18, 2012, we made six recommendations and CMS agreed to implement four of them. Of those four recommendations, CMS implemented two, partially implemented one, and did not implement one.”

In this new audit, OIG recommends that CMS: (1) continue to recover the $226 million in uncollected overpayments, (2) determine what portion of the $152 million was collected and recorded in its accounting system, (3) revise 42 CFR section 405.980 and corresponding manual instructions related to the reopening period for claims to be consistent with statutory provisions contained in section 1870 of the Social Security Act, and (4) develop a plan for resolving cost reports applicable to the nine audit reports discussed in this report.

CMS agreed with only one of nine recommendations put forward by OIG – to continue efforts to collect $226 million in overpayments.