CMS Pub. 100-08, ch. pim83exhibits, § 14.2

Overpayment

(Rev. 3, 11-22-00)

Once the contractor has concluded that an overpayment exists (i.e., postpayment review,

including §1879 of the Act waiver determinations is complete), it makes a §1870 determination

regarding waiver of recovery of the overpayment from the provider. Carriers make this

determination for all claims where the provider took assignment. Section 1870, waiver of

recovery, is not applicable for the provider on non-assigned postpayment §1862(a)(1) of the Act

denied claims because the overpayment is a beneficiary overpayment. The provider may have a

refund obligation to the beneficiary, but the provider did not receive an overpayment from the

Medicare program.

Section 1870 is not limited to claims under §1862(a)(1) (A) of the Act denied for not being

reasonable and necessary. Section 1870 is the framework for determining whether overpayment

recovery is waived. For providers taking assignment, waiving recovery of an overpayment is

appropriate where the provider was without fault with respect to causing the overpayment.

Where recovery from the provider is waived, the overpayment becomes an overpayment to the

beneficiary. However, if the provider was "at fault" in causing the overpayment, recovery of the

overpayment from the provider must proceed. Section 1870 waiver of recovery determinations

also must be made where the provider mistakenly receives direct payment on an unassigned

claim and this is the basis for the overpayment.

If §1879 of the Act is applicable, the §1879 determination is made first since an overpayment

does not exist if payment can be made under §1879 because there was a lack of knowledge by

both the beneficiary and the provider.

A. Documentation of §1870 of the Act Determination

The contractor must document the basis for the determination (i.e., rationale), including

appropriate references to contractor newsletters, prior denials, sponsored meetings attended by

the provider, etc., where applicable. Any correspondence going to the beneficiary or provider

(i.e., demand letters) should include all §1870 refund determinations. Also, document the §1870

determination in the CMR summary report.

B. Section 1870 of the Act Determinations and Overpayments

Where waiver of recovery from the provider is appropriate under §1870, the contractor must

show an overpayment amount, but also indicate that recovery is being waived.

C. Section 1870 of the Act Determinations and Extrapolations

If recovery of an overpayment from the provider for one or more claims is waived under

§1870 (i.e., the provider was without fault), the amount waived must be included when

extrapolating in order to get a true projected overpayment as to exactly how much recovery is

being waived. Contractors should subtract the projected waived amount from the projected

overpayment amount to get the amount the provider must repay.