CMS only collected half of $498 million in Medicare overpayments, OIG found

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The Centers for Medicare and Medicaid Services has collected just a little more than half the $498 million in Medicare overpayments identified in eight-year-old audits, according to Health and Human Services' Office of the Inspector General.

CMS had agreed to collect those overpayments, which were logged between October 2014 and December 2016. The agency claims it collected $272 million of those overpaid claims, but supporting documentation seemed to indicate it had only collected $120 million.

OIG added that CMS did not take corrective action in response to the recommendations the OIG made in its previous report. In that report, an audit determined that CMS had not recovered $332 million of the $416 million in Medicare overpayments identified in the 30-month period ending in March 2009.

The current audit is a follow-up to the last one. The OIG reviewed 1,228 audit reports issued during the 27 months in question.

WHAT'S THE IMPACT?

Th OIG issued a number of recommendations to CMS, but the latter is allegedly showing reluctance to follow them.

According to the OIG, CMS should continue its efforts to recover any collectible portion of the $226 million in outstanding payments. It should also determine what portion of the $152 million was collected and recorded in its accounting system, and revise the reopening period for claims to be consistent with section 1870 of the Social Security Act, said the OIG.

Th OIG also recommended that CMS develop a plan for resolving cost reports applicable to the nine audit reports in the new report. 

CMS, however, largely did not concur with the recommendations. The agency agreed to continue efforts to recover the $226 million in uncollected payments but essentially shot down the other suggestions.

THE LARGER TREND

According to the OIG, the combination of a substantial balance of uncollected overpayments, inadequate policies and procedures, and unimplemented recommendations increases the future risk that CMS will not collect millions of dollars owed to the Medicare Trust funds.

"Policies and procedures are one of the primary components of an effective internal control system," the OIG wrote. "Both our current and prior audits showed that CMS did not have adequate policies and procedures to address certain collection issues, especially to support that the collection occurred. In the absence of adequate policies and procedures, CMS cannot ensure that Medicare overpayments will be collected to the maximum extent possible."

CMS said it would explore ways that are "operationally feasible and cost effective" to establish a mechanism to reopen claims when the OIG starts an audit.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com