OIG to CMS: Collect Medicaid overpayments

WASHINGTON - CMS did not collect $1.6 billion in Medicaid overpayments in 77 current period audits and $188.6 million in seven prior period audits, according to a new report from the Office of Inspector General.

The OIG reviewed CMS's efforts to collect overpayments identified in 313 audits in fiscal years 2010-15 (the current period) that recommended recovering overpayments totaling $2.7 billion and 10 audits in 2004-09 (the prior period) that recommended recovering overpayments totaling $225.6 million. For these 323 audits, the OIG chose only the overpayments that it had recommended for recovery and with which CMS had concurred, totaling $2.6 billion for the current period and $191.3 million for the prior period.

“CMS had not recovered all overpayments covered by this review because its policies and procedures did not include timelines for resolving overpayment when state agencies disagreed with the recommendations,” the OIG stated. “CMS did not ensure that states correctly reported Medicaid overpayments because it did not always verify that states followed its guidance.

The OIG continued: “CMS did not retail documentation to support that overpayments were recovered because its standard operating procedures included a retention period that was inconsistent with federal retention guidelines.”

The OIG recommends that CMS recover the remaining $1.6 billion due the federal government from the current period and $188.6 million due from the prior period, and improve the timeliness of recovering overpayments by setting guidelines about the time CMS has to work with states to obtain documentation and issue disallowance letters to States. It also recommends that CMS verify that states report overpayments correctly, require states to resubmit corrected CMS-64s when they do not, and continue to educate states about their responsibility to report overpayments correctly.

CMS concurred with the OIG's recommendations and described actions that it has taken or plans to take to address the recommendations.