Overpayments & Refunds
Reporting Overpayments
CMS relies on the existing voluntary refund process defined in the Medicare Financial Management Manual, as well as claims adjustments, credit balances, and self-reported refunds to report and return overpayments. It is important to include the following information in your report:
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- The health insurance claim number
- How the error was discovered
- Description of the corrective action plan implemented to ensure the error does not occur again
- Whether the provider or supplier has a corporate integrity agreement
- The timeframe and the total amount of the refund for the period during which the problem that warranted the refund existed
- The method used to determine the overpayment
- The reason for the refund
According to CMS, the reasons most commonly given for overpayments by providers include:
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- An incorrect service date
- A duplicate payment
- An incorrect CPT code
- Insufficient documentation
- Lack of medical necessity
This information pertains to CMS and Medicare; third-party payers usually have their own policies for reporting overpayment. Your compliance program should include details for all of the third-party payers with whom you work. Implementing an investigative policy and reporting procedure helps your office comply with these guidelines.
We encourage you to have your staff review the following tutorial titled Overpayments & Refund Requests. This quick tutorial provides an overview of overpayments and what a clinic should do if they receive a refund request from a payer. A well-informed staff will support the compliance officer in building a compliant practice.