Medicare Advantage Plan Overpayments

on Tuesday, 19 November 2019. All News Items | Case Management | Documentation | Coding

“Pay it Right”

This week I have started seeing Christmas decorations pop up in yards on my daily commute to work. While I am a firm believer in celebrating Thanksgiving before putting up Christmas decorations, I have been known to watch a Christmas movie before Black Friday. Ranked high among my favorite Christmas movies is A Christmas Carol, whether it is George C. Scott as Ebenezer Scrooge or the more modern take on the tale where Bill Murray stars in Scrooged.

Palmetto GBA recently posted information on the final resolution to Medicare Plan Overpayments on their website. The plan for resolving payments includes three letters. The first letter can be likened to the Ghost of Christmas past. The second letter serves as the Ghost of Christmas present as hospitals find out which Medicare Advantage (MA) plans have agreed to waive its claims filing deadline. Last but not least is the third letter or the Ghost of Christmas Future as it is set to be issued next year in early January and it will be up to each provider to decide their future road to a final resolution.

Background: Potential Overpayments

By the end of February 2018 the Jurisdiction J (JJ) Medicare Administrative Contractor (MAC) contract had transitioned from Cahaba GBA to Palmetto GBA. In May of 2018, Palmetto GBA identified potential overpayments related to Part A claims for Medicare Fee-for-Service (FFS) claims paid for beneficiaries covered under a Medicare Advantage (MA) plan on the date of service.

The potential overpayments had been under Cahaba GBA’s watch and occurred due to the fact that Cahaba did not have the required edits in place to reject claims if a beneficiary was identified as being enrolled in an MA plan at the time of service rather than Medicare FFS.  

Affected hospitals were sent a letter in June 2018 providing them a claims listing of potential overpayments. At that time Palmetto noted “if overpayments exist and result in financial hardship,” several options for returning overpayments including an extended repayment plan would be provided to hospitals.

November 2019: Final Plan for Resolving Erroneous Payments

Last week Palmetto GBA posted information on their website letting providers know that in late November they will begin sending out the first of three letters. The first letter will be purely informational. If a hospital receives the second and or third letter provider follow-up will be required.

  • First Letter, Late November: When CMS made companies that sponsor MA plans aware of the overpayments “several dozen MAOs, which collectively sponsor 195 MA plans, on a purely voluntary basis agreed to make repayments to the Medicare FFS program.” Voluntary repayments totaled $26 million, resolved 133,000 erroneous claims, and benefited nearly 2,000 providers. This letter is “purely informational…and providers will not have to take any follow-up actions on the claims referenced in the first letter.”
  • Second Letter, Early December: In this phase, CMS will require repayment of about $2.7 million in FFS payments. The letters will identify MA plans that have agreed to waive their claim filing deadlines and give consideration to claims involving these enrollees. This means hospitals have to repay the “overpayments” to Medicare FFS, but they can also submit new claims to these MA plans for the services erroneously billed to Medicare FFS.
  • Third Letter: Settlement Offers to be issued early January 2020: CMS will make offers to resolve any remaining overpayments. “Settlement offers will identify the total potential MA overpayment, and will provide for 40 percent of the total to be repaid to Medicare and 60 percent of the total to be retained by providers.” This offer must be accepted within 60 days, otherwise a demand letter will be sent for the total potential MA overpayment amount.

Next Steps

Palmetto has advised reading the following three documents posted on their website and sharing this information with your staff:

In addition to reading these documents, Palmetto GBA has included the following sentence in all caps and bolded in third documented listed above:


Article by Beth Cobb

Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Analytics at Medical Management Plus, Inc.  Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. 

In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Risk Assessment (CRA) Tool. You may contact Beth at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.



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