The Government Accountability Office (GAO) recently announced the federal government overpaid Medicare claims by almost $57 billion in 2025. This marks a significant uptick from reports of fraudulent payments in previous years which were closer to $12 billion.
The announcement comes shortly after Vice President JD Vance took the lead in a fraud task force that focused on pressuring states like New York to root out fraud or lose federal funding. Health care organizations and private practices should be aware of the following takeaways from the announcement.
#1: The government is continuing its crackdown on Medicare overpayments
The GAO has made it clear that it sees Medicare as a “high-risk” program. As such, there is unlikely to be an easing of the continued crackdown on review of Medicare claims in coming years. Groups are wise to conduct internal audits to make sure their practices are in compliance with applicable regulations and make changes as needed to reduce the risk of allegations of fraudulent claims.
#2: Health care organizations and private practices need to have a response plan
Receiving a Medicare overpayment notice is unsettling for any health care business in New York. Still, the notice is not the end of the story. It is a prompt to act quickly, preserve documentation and choose the right response path. Allegations of overpayments can arise from coding issues, medical necessity determinations, duplicate billing, coordination of benefits problems or post-payment audits by a Medicare Administrative Contractor or other review entity. It is helpful to treat the notice as both a financial and compliance event.
Although the exact response depends on the organization and notice, general practices that are helpful include:
- Review notice for important deadlines
- Organize applicable records and correspondence
- Notify leadership and compliance personnel and consider engaging experienced counsel early
After applying the response plan, you typically have several routes: repay, request a redetermination or other appeal level, seek a rebuttal to recoupment where available or pursue an extended repayment schedule if cash flow is a concern. The best option depends on the strength of the documentation, the legal theory behind the denial and the business impact of recoupment.
The announcement is a reminder of the government’s continued focus on fraudulent claims and likely signals an increase in investigative efforts. As such, groups and health care organizations are wise to prepare for potential investigations and review strategies to address a notification of a Medicare overpayment.
Attorney John Rivas is responsible for this communication.
