Coping with an Overpayment

An overpayment is money you should not have received, usually from a third party payer, based on a claim for reimbursement. Overpay-ments also affect beneficiaries due to the impact of co-payments and deductibles. It may be all or part of the payment you received. It may be the result of an inadvertent mistake or caused by intentional misrepresentation. It may be an isolated occurrence or a recurring problem. Overpayments are clearly wrong, not disputed amounts due to differences of opinion.

Overpayments may result from a variety of causes. The principal reasons include: 1) poor chart documentation that does not support the medical necessity for services, 2) upcoding eye exams, and 3) unbundling of services that are described by one inclusive CPT code.

This FAQ addresses the following:

  1. What is an overpayment?
  2. What is the provider’s obligation when an overpayment is found?
  3. Where should refunds be sent?
  4. How should related co-payments and deductibles be handled?
  5. When is an overpayment treated as fraud?
  6. Do we require an attorney to make a refund of an overpayment?
  7. If we find a larger problem, how do we communicate that to Medicare?
  8. Should overpayments be reported to the Office of Inspector General?
  9. Does refunding an overpayment lead to an audit?
  10. How can we prevent overpayments?

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