Healthcare News & Insights

CMS could extend reach for collecting overpayments

The Centers for Medicare & Medicaid  Services (CMS) is exploring the possibility of pursuing  legislative action to extend the statute of limitations for collecting overpayments.

What this means is that CMS, in the not-too-distant future, may start coming after your overpayments that are past the recovery period of three years. Why?

The results of a recent report from the U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG), showed that CMS failed to collect at least $332.1 million in Medicare overpayments identified during a 30-month period (2007 through the first six months of 2009).

During that time period, the OIG recommended that CMS collect $418 million in Medicare overpayments, of which CMS agreed to collect $416 million. However, CMS only collected $84.2 million.

The OIG cited the current rule, where providers are off the hook for paybacks three years after the original payment date, as a barrier to collecting overpayments. It recommended that CMS make the recovery period longer than the time frame require to reopen a payment determination.

CMS was also accused of not providing its contractors with adequate guidance for collecting overpayments and that it didn’t have an effective system for monitoring it’s contractors’ collection efforts.


The OIG made several recommendations to CMS on how it could improve its performance. These included:

  • pursuing legislation to extend the statute of limitations so that the recovery period exceeds the reopening period for Medicare payments
  • ensuring that its Audit Tracking and Reporting System (ATARS) is updated to accurately reflect the status of audit report recommendations
  • ensuring that CMS staff record collections information consistently in ATARS
  • collecting sustained amounts related to OIG recommendations made after the audit period to the extent allowed under the law
  • verifying that the $84,168,502 reported as collected has actually been collected, and
  • providing specific guidance to its contractors concerning (1) the time frame in which the contractor must take action to collect an overpayment, (2) how to report collections, (3) the type of documentation that the contractor must maintain to substantiate an overpayment collection, and (4) how to report reasons for not collecting overpayments.

We’ll keep you posted on what happens next.


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  1. How about a claim by CMS over Eight years (last settle cost report)