Medicare failed to collect back $543 million in overpayments

Medicare, already under fire from Congress for its financial woes, did not recover $543 million in overpayments during 2010, and can provide little information on which contractors they overpaid, according to a new report from the Health and Human Services Office of Inspector General.

The Center for Medicare and Medicaid services was only able to provide details on seven of the 32 contractors that owed them money. The seven contractor CMS had detailed information on accounted for $69 million (18 percent) of the uncollected overpayments.

“CMS stated that its inability to provide consistent detailed data for the remaining 32 contractors was caused in part by workloads being transitioned to a new contractor, being added to a contract involving a merger, or being split from a former workload,” the IG said.

The problems occurred, the report said, when CMS switched to a new accounting system. During this switch, only summary information was transferred over instead of detailed information like what was kept on the old system.

“The current status of the overpayments was transferred but the original overpayment amounts and any collection activity were not transferred,” the IG said.

When inspectors requested specific data about the delinquent contractors, CMS estimated it would take 3,421 staff hours to look up the information. The IG said that a lot of CMS’s information from past years can only be accessed manually.

“The accuracy of the financial reports remains heavily dependent on inefficient, labor-intensive manual processes that are also subject to an increased risk of inconsistent, incomplete or inaccurate information being submitted to CMS,” the report said.

Much of the $543 million in Medicare overpayments — the lowest amount between 2007 and 2010 — likely will not be recovered, investigators said. Even with detailed information on seven contractors, CMS has only been able to recover 97 percent of their uncollected overpayments.

“CMS and some of its contractors said debt recovery would be improved if CMS used additional provider identifiers, such as tax identification numbers, to offset Medicare payments,” the IG said.

CMS did not agree with some of the IG’s recommendations. The agency stated in the report that its 80 percent overpayment recovery rate is highly effective.  However, CMS agreed that adding tax ID numbers to their current system is a positive recommendation that would help them keep better track of accounts.


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