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Medicare overpayments not facing any major penalties yet, government states

Medicare providers to keep the billions in overcharges faced by seniors from 2011 to 2017

Government officials offered a financial pardon to Medicare Advantage plans for retirees after the plans returned millions in government overpayments, some of which dated back ten years or more. Popular health plans got billions of dollars in overcharges from the Centers for Medicare & Medicaid Services as early as 2011. The insurance industry has dreaded this day would come for a long time.

However, CMS suddenly stated that it would ask insurers for virtually nothing in return for any overpayments they got from 2011 to 2017. CMS will not levy significant fines until audits of payments from 2018 and upwards have been completed.

Medicare plans will retain millions in excess fees

Future Medicare plans may pay billions in penalties as a result of this ruling, but those penalties won't be imposed for years. As for audits, health plans can keep millions in overpayments and probably much more. We don't know for sure how much since audits dating back to 2011 have not yet been finished.

The choice to disregard prior audit results is distressing because CMS has spent millions on audits dating back to 2011 — considerably higher than the government can recover. According to CMS, the agency spends $54 million yearly to fund 30 of these investigations. Even with optimistic projections for the years 2011 to 2017, CMS won't be able to recuperate that much.

Puzzle where Medicare written on it

CMS criticized for long-dragging overcharge appeals

KHN published the results of 90 audits conducted between 2011 and 2013 last week; the information was obtained through a FOIA lawsuit. During the three years audited, about 18,090 patients had net overpayments of approximately $12 million. Medicare and Medicaid cover over 30 million Americans; the federal government has promised to tighten down on billing irregularities in popular health schemes since 2010. The inspector general for the Department of Health and Human Services is conducting a series of audits that are unrelated to Medicare Advantage plans, which could result in overpayments totaling several hundred million dollars.

CMS has been criticized for allowing long appeals that take years to resolve, and the audits of Medicare Advantage have taken years to complete.

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