CMS Pub. 100-06, ch. 3, § 20.1

When the provider files a cost report indicating an overpayment, a final determination is deemed to have

occurred if the cost report is not accompanied by payment in full. Where the provider does not remit the

overpayment in full, the FI sends the first demand letter notifying the provider that it will reduce or

suspend interim payments in 15 days if the provider does not make repayment arrangements.

If an overpayment is determined as a result of a tentative settlement, final settlement, interim rate

adjustment, or reopening the FI sends the first demand letter within 7 calendar days. (See Chapter 4,

§20)

When the Notice of Program Reimbursement (NPR), which is sent at the conclusion of an audit, results

in an overpayment a first demand letter must also be sent. The NPR and the first demand letter may be

sent simultaneously, the first demand letter may be sent as a separate document or the first demand letter

may be incorporated into the NPR. If the issuance of the NPR changes the facts as stated in prior

demand letters, the FI shall include in the NPR an explanation of the revised overpayment amount.

See Chapter 4, §40 to determine if the overpayment requires a withhold of payments.

If the provider does not respond within 30 days after the date of the first demand letter, the FI sends a

second demand letter notifying the provider of the FI’s intent to recoup the overpayment from interim

payments. (If the current percentage of withhold is less than 100%, the demand letter shall state that

interim payments will be withhold at 100% in 30 days if repayment arrangements are not made.) If

appropriate, the FI shall advise the provider that action to withhold its Federal share of Medicaid

payments has been requested. The FI shall attempt to make personal (or telephone contact) with the

provider, 15 days after sending the second demand letter to encourage either a lump-sum refund or a

request for an extended repayment plan. It shall document each contact. (See Chapter 4, §10-20)

If there is no response or if the overpayment is still outstanding 30 days after the date of the second

demand letter the FI shall send a third demand letter. If eligible, the third demand letter shall include

notification of the intent to refer the entire debt to the Department of Treasury for additional collection

action. (See Chapter 4, §20)