Overpayment

Any payer can pay too much, but Medicare spells out its rules in regulation. Its regulation defines an overpayment as funds a provider or supplier received or retained under the Medicare statute that it is not entitled to after applicable reconciliation¹. Some surface on the payer’s side, when a post-payment review ends in a revised determination that an overpayment occurred⁴. Others show up in your own posting: a duplicate payment, a line paid at the wrong rate, a credit balance that never cleared.

Finding one starts a deadline. A provider has identified an overpayment when it knowingly receives or retains it, with “knowingly” carrying its False Claims Act meaning, and must report and return it by the later of 60 days after identification or the date any related cost report is due². The deadline pauses while a timely, good-faith investigation looks for related overpayments, but for no more than 180 days after the first one was identified. The duty covers overpayments identified within 6 years of the date they were received, and the report is made through the contractor’s claims adjustment, credit balance, self-reported refund or other reporting process².

When Medicare finds the overpayment first, the MAC sends a demand letter. The letter says interest will begin to accrue if the overpayment is not paid in full within 30 days³. For overpayments covered by the limit on recoupment during appeal, withholding from your payments starts on day 41 unless a valid redetermination request reaches the MAC by day 30³. Post refunds and takebacks as their own adjustment lines, tied to the original claim, so the report shows what left the practice and why.