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    Alliance calls for revisions to Medicare repayment plan

    Reimbursement schedule would be more flexible in hardship cases


    Washington—It sounds a little like "Let's Make a Deal": Medicare bureaucrats are proposing a payment plan for physicians and other providers who somehow receive overpayments for their services.

    Bob Gatty
    Last November, the Centers for Medicare & Medicaid Services published a proposed rule change that would let physicians repay Medicare overpayments over time, rather than all at once. The new rule includes a more flexible "hardship" provision and adopts the attitude, "Let's find a way to work this out."

    The Alliance for Specialty Medicine, which represents over 200,000 physicians in 11 medical specialty organizations, including AUA, likes the proposal, but has some suggestions for improvement in the hardship area. One provision the Alliance objects to would require payment in full if even one installment were missed.

    But why would Medicare providers be overpaid to begin with?

    Fast Facts
    "Generally, overpayments result when payment is made by Medicare for non-covered items or services that exceeds the amount allowed by Medicare for an item or service, or when payment is made for items or services that should have been paid by another insurer (Medicare secondary payer obligations)," CMS explained in its Nov. 27, 2006 Federal Register notice. "Once a determination and any necessary adjustments in the amount of the overpayment have been made, the remaining amount is a debt owed to the United States Government."

    One might argue that Medicare should get it right to begin with, but we are talking about the federal government here.

    Federal law authorizes the head of an agency to collect claims in any amount, while uncollectible claims exceeding $100,000, exclusive of interest, are referred to the Department of Justice "for compromise."

    Currently, CMS said in its notice, "In almost all cases, we try to work with the provider or supplier to recover the overpayment. In general, it has been our experience that it is in both CMS's and the debtor's best interests to work out a reasonable repayment schedule to recoup an overpayment, rather than demand immediate collection of the debt, which could place a provider or supplier into bankruptcy."

    Hardship repayment relief

    The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) includes provisions requiring CMS to use certain statutory criteria to decide whether a provider or supplier should be granted a repayment schedule of at least 6 months and up to 5 years. Under that law, CMS may grant a provider or supplier, upon request, a repayment schedule of at least 6 months if repaying an overpayment within 30 days would constitute a hardship, provided certain criteria are met.

    So CMS is proposing to add a new hardship test to the existing regulations to determine the appropriate extended repayment schedule (ERS). In fact, under the proposal, all ERS requests would first be evaluated under the new test. If hardship is determined and no statutory exception applies, the provider or supplier would be granted a repayment period of at least 6 months, but not more than 3 years.

    In comments submitted to CMS, the Alliance pointed out that providers can have 6 months to repay the debt "if the total amount of all outstanding overpayments equals 10% or greater of the total Medicare payments made for the period of the most recently submitted cost report or the previous calendar year."

    The organization said that although the 10% requirement for hardship is specified in the MMA, "we believe that CMS should exercise some flexibility to allow use of a sliding-scale percentage so that the qualifying amount represents a graduated burden based on the proportion of that physician's income represented by Medicare."

    The Alliance also expressed concern about the threat of everything coming due if one payment is missed.


    Bob Gatty
    Bob Gatty, a former congressional aide, covers news from Washington for Urology Times.