The Centers for Medicare & Medicaid Services wants to establish a formal process that allows it to use a payment offset system to handle disputes with Medicare Advantage insurers about potential payment errors.
Although the agency loses billions of dollars each year from overpayments that aren't recovered, CMS doesn't have a process in place to address the financial losses, the Center for Public Integrity reported. In fact, CPI found that from 2008 to 2013, improper payments to Medicare Advantage plans topped nearly $70 billion.
CMS says the problem is that it lacks authority to force an insurer to fix an error if the insurer refuses. So CMS wants to the ability to deduct the disputed amount from payments it would otherwise owe the insurer. The insurer would then have 30 days to appeal the payment adjustment, reported LifeHealthPro.
The new overpayment recovery and appeals process will be part of draft regulations CMS will publish July 14, with a final rule expected by Nov. 1. CMS said the appeals process would include three levels of review--reconsideration, an informal hearing and an agency administrator review, according to an agency fact sheet.
"Deterring improper payments is a top priority for CMS in order to protect beneficiaries and taxpayers," said CMS spokesman Raymond Thorn, according to CPI. "This new rule is just another tool that CMS would use to recover improper payments in the Medicare program."
However, CMS didn't clarify how much money it hopes to recover, particularly since it says Medicare Advantage insurers could be responsible for returning overpayments from the last six years.