The Medicare health insurance program works with a range of insurance providers in fulfilling the benefit coverages offered through Medicare's program. Billing errors on the part of Medicare or on the part of care providers may result in overpayments on services rendered. To correct for billing errors, Medicare offsets encourage insurance companies and health care providers to refund any overpayments made.
Medicare Overpayments
Under the Federal Claims Collection Act of 1966, Medicare contractors must take action to recover overpayments in the amount of $10 or more made to insurance companies and health providers, according to NHIC Corp., a Medicare contractor agency. Under the law, an overpayment is considered as a debt to the United States government. Regulations put in place by the Centers for Medicare & Medicaid Services require contractors to follow payment recovery procedures. In cases where an insurance company or service provider fails to refund an overpayment amount, Medicare offsets provide one method for recovering overpayment amounts.
Medicare Offset
As part of the billing process, contractors are required to notify insurance companies or providers and request a refund when an overpayment appears on their account. After 30 days of nonpayment, any overpayment amount begins to accrue interest charges, according to NHIC Corp. After 40 days of nonpayment, contractors initiate the payment recovery process using Medicare offsets. Medicare offsets affect current and future payments or reimbursements due to insurance companies. In effect, the overpayment amount is deducted from current and future payments due for services rendered by health providers. Once a Medicare contractor initiates an offset, payments will be affected until the overpayment amount is recovered.
Medicare Offset Methods
Insurance companies and health-care providers -- or debtors -- can handle a Medicare offset notification in one of two ways. Debtors can request an immediate offset of an overpayment amount by submitting a standard offset request form. This is known as a debtor-requested immediate offset. Once they have received this request, Medicare contractors begin offsetting any current or future payments due. The other option -- known as a contractor-initiated offset -- involves taking no action on the debtor's part and the contractor will initiate offset procedures according to the standard timetable. In the case of a contractor-initiated offset, overpayment amounts will accrue interests costs every 30 days.
Offset Appeal Process
Under the Social Security Act, insurance companies and health-care providers have certain rights when it comes to appealing a Medicare offset claim. Also known as a limitation of recoupment, the Social Security Act places certain limitations on Medicare contractors once a case enters the appeal process. According to NHIC, Corp, appeals can move through two different levels, known as the redetermination and reconsideration levels. The limitation of recoupment requires Medicare contractors to delay offset procedures for 41 days once a case enters the redetermination level and 76 days once a case enters the reconsideration level. Throughout the appeal process, interest costs on overpayment amounts continue to accrue.
Tags: overpayment amount, Medicare contractors, Medicare offsets, case enters, current future, current future payments
