Medical professionals who receive a notice of overpayment from Medicare or commercial insurance companies may find themselves facing a massive bill. These letters demand repayment, sometimes asking the health care professional to pay millions of dollars back to the insurance provider. Government agents and those who work for these commercial providers will take aggressive actions to recoup these funds, potentially including invasive investigations.
Having a basic understanding of how the overpayment process works can help health care professionals navigate these frustrating situations.
What qualifies as an overpayment?
In most cases, insurance companies will either claim the overpayment was the result of a clerical or judgement error. In a clerical error, the overpayment is the result of the insurance company allegedly paying the health care provider the wrong amount for the service provided. For a judgement error, the insurance company changes its mind about how much the health care provider should receive for the billed service.
The United States Centers for Medicare and Medicaid Services (CMS) further clarifies that overpayments can fall into one of two categories: aggregate or individual. An aggregate overpayment involves allegations of a pattern of excessive billing and failure to repay accelerated payments. An individual overpayment is an alleged incorrect payment to a provider. Common causes of individual overpayments include situations when the benefits were exhausted, the individual was not entitled to the benefits, the payment was the result of an inaccurate application of a deductible or involved payment for noncovered items.
What are the repercussions if a medical professional does not repay the alleged overpayment?
Repercussions will vary depending on the circumstances. If the insurance provider alleges fraud, the repercussions will increase in severity. In most cases, consequences for failing to promptly repay an alleged overpayment can include suspension of future payments. Health care providers do not have to accept these allegations. They can appeal these claims and fight the accusations made by the CMS or commercial insurance provider.
