CMS has unveiled an approach to recoup funds that were paid by original Medicare that should have been billed to Medicare Advantage insurers.
The agency said the overpayments stem from providers failing to screen fully patients for insurance coverage and for billing Medicare fee-for-service for care that they should have billed to Medicare Advantage plans. CMS also blamed former Medicare administrative contractor, Cahaba GBA, for not catching the erroneous payments.
A notice posted by Palmetto GBA — the new Medicare contractor — says Palmetto and CMS will begin resolution of the overpayments in the coming weeks. The notice said hospitals, rural health clinics and other providers involved in the overpayments will receive, depending on their specific situations and claims, one, two or three letters about the issue.
The first letter is scheduled to go out later this month and will identify those overpayments relating to this issue that have been voluntarily resolved by several dozen Medicare Advantage organizations, which together sponsor nearly 200 plans. These MA organizations agreed to voluntarily give back $26 million to original Medicare to resolve 133,000 erroneous claims, according to the notice and Georgia Health News.
The second letter is scheduled to go out in December and will identify the overpayments that providers may rebill to three dozen Medicare Advantage organizations, which together sponsor 108 plans. The notice says these MA organizations agreed to allow providers to bill their claims again "or otherwise pursue payment, even though their respective claims filing deadlines had passed."
The third letter, scheduled to go out in January, addresses about $12 million of the MA plan overpayments that were unresolved because Medicare Advantage organizations did not make a voluntary repayment or arrange for claims to be rebilled. In the third letter, there will be a settlement offer from CMS related to the unresolved claims, according to the notice.
"Providers that accept the CMS settlement offer will retain a sizable portion of the original payments but will need to repay the balance specified in the settlement offer," the notice states. "Providers that do not accept the CMS settlement offer will receive a Medicare demand letter for the full balance, which they will need to repay; however, these providers will be permitted to pursue appeals on any of the claims if they wish to."
Read the full notice here.
Editor's note: This article was updated on Nov. 18.
More articles on healthcare finance:
10 hospitals seeking RCM talent
Hospitals push for climate resiliency but face financial barriers, report shows
CMS to guide states testing new Medicaid financing approaches