CLINICAL SOCIAL WORK PRACTICE UPDATE

Medicare Overpayment Requests for Clinical Social Workers in Private Practice

Mirean Coleman, MSW, LICSW, CT
Senior Policy Associate for Clinical Social Work

February 2006

In the United States, 40,000 clinical social workers in solo or group practice are Medicare providers under Part B and receive reimbursement for mental health services provided in an outpatient setting.  A number of social work providers who have received overpayment notices from Medicare have contacted NASW with questions about the administrative process.  This practice update provides an overview of the Medicare overpayment process.

Overpayment

An overpayment is a Medicare fee paid to a Medicare provider that is in excess of the amount due and permitted under Medicare statutes and regulations. Medicare conducts claim edits and record audits to determine if an overpayment has occurred.  When an overpayment has been identified, it becomes a debt owed to the Federal Government.  The Centers for Medicare and Medicaid Services (CMS) is required by federal law to seek the overpayment and assigns the Medicare carrier the responsibility to do so.   An overpayment may occur in the following situations:

• Payment for an excluded service.  For example, since the enforcement of Consolidated Billing in 2002, clinical social workers are no longer able to receive independent  reimbursement for services performed in a Medicare Part A  stay in a skilled nursing facility.   An overpayment may occur when a clinical social worker is paid for this excluded service.
• Payment for a medically unnecessary service.  For instance, should a clinical social worker improperly document the service performed, the error may be designated as an overpayment.  Another example is that Medicare makes available a list of medically necessary diagnoses it will pay for and may seek an overpayment for diagnoses it considers medically unnecessary.  
• Submission of duplicate claim forms and services
• Payment to the incorrect provider; and
• Payment made as the primary insurer when Medicare should have reimbursed as the secondary insurer.

Refunds

The local Medicare carrier may notify the clinical social worker when an overpayment has been made.  Clinical social workers who are aware of an overpayment situation before receiving notification from their Medicare carrier should refund the payment promptly.

The Medicare carrier sends a letter to the provider that identifies the service in question, the reason for the overpayment, the amount being requested, and where to mail the overpayment.  The clinical social worker has 30 days to refund the overpayment in full without interest.  Interest begins to accrue on the 31st day and rates may vary each year.  A second letter is sent if no response is received after 30 days.  If payment is not received 40 days after the date of the first letter, recovery of funds from future Medicare payments may began on the 41st day.  Some Medicare carriers allow the clinical social worker to make installment payments upon request.

The clinical social worker has the right to file for an appeal if she or he disagrees with the overpayment and should do so in writing by certified or registered mail.  An explanation of why the overpayment is incorrect should be included with the appeal request.  Recoupment action may be suspended when the first appeal request has been received. 

Summary

The clinical social worker should not ignore an overpayment request from Medicare.  Doing so allows the Federal Government and its agencies to pursue appropriate criminal, civil, or administrative actions related to the overpayment of the applicable claim.  Clinical social workers who have additional questions related to the overpayment process should contact their local Medicare carrier for assistance.  It may also be helpful to contact an attorney familiar with Medicare law before responding to an overpayment request. The following Web site may help you locate your Medicare carrier: www.cms.hhs.gov/medlearn/tollnums.asp.  NASW also provides a list of Medicare carriers in the Clinical Social Work Practice Update, “Becoming a Medicare Provider” available at www.socialworkers.org/practice/clinical/default.asp.           

Resources

Centers for Medicare and Medicaid Services. (2003). Medicare resident & new physician guide: Helping health care professionals navigate Medicare.  Washington, DC: U.S. Department of Health and Human Services.

U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services. (2004). Reference guide for Medicare physician & supplier billers  (Publication No. 11049-ICN 006209). Washington, DC: U.S. Government Printing Office.