22.2 Corrective Action

An "overpayment" occurs when Medicaid benefits are paid for someone who was not eligible for them, or when Medicaid payments are made in an incorrect amount. The amount of recovery may not exceed the amount of the Medicaid benefits incorrectly provided. Some examples of how overpayments occur are:

Concealing or not reporting income.
Failure to report a change in income or assets.
Providing misinformation, at the time of application, regarding any information that would affect eligibility.

22.2.1.1 Recoverable Overpayments

Initiate recovery for a Medicaid overpayment if the incorrect payment resulted from one of the following:

Member Error

Member error exists when an applicant , member , or any other person responsible for giving information on the member’s behalf, unintentionally misstates (financial or nonfinancial) facts, which results in the member receiving a benefit that he or she is not entitled to or more benefits than he or she is entitled. Failure to report nonfinancial facts that impact eligibility or cost share amounts is a recoverable overpayment effective July 27, 2005. For ongoing cases, September 1, 2005, is the earliest a claim can be established for failure to report a nonfinancial change. For applications on/after July 27, 2005, overpayment claims can be established effective with the application date.

Member error occurs when there is a:

Misstatement or omission of facts by a member, or any other person responsible for giving information on the member’s behalf, at a Medicaid application or review, or
Failure on the part of the member, or any person responsible for giving information on the member’s behalf, to report changes in financial (income, assets, expenses, etc.) or non-financial information that affects eligibility, premium, patient liability or cost share amount.

A Medicaid member is responsible for notifying his or her IM worker of changes within 10 days of the occurrence.

An overpayment occurs if the change would have adversely affected eligibility benefits or the post eligibility contribution amount (cost share, patient liability).

Example 1: Ed applied for EBD Medicaid and was found eligible effective November 1, 2013. Ed originally reported $1,800 of nonexempt assets (checking and savings accounts), which were subsequently verified. At the time of his application, Ed failed to disclose ownership of several nonexempt vehicles with an equity value of $1,000. The agency discovers Ed’s ownership of these vehicles on February 10, 2014. On February 20, 2014, the agency receives verification that the equity value of Ed’s nonexempt vehicles and other nonexempt assets has continuously exceeded the $2,000 Medicaid asset limit since the Medicaid application date. The agency sends Ed a Notice of Decision on February 22, 2014, advising him that his eligibility is being discontinued effective March 31, 2014. The overpayment amount that is subject to recovery is the total of all Medicaid benefits that were received by Ed from November 1, 2013, through March 31, 2014.

Example 2: Sally, determined eligible for a HCBW in January with a cost share, experienced a reduction in her health insurance expense as of July 1, but did not report that to her worker until her November review. The worker made the changes in CARES and increased her cost share for December.

Had Sally reported timely, her cost share would have increased beginning in August. The overpayment is the difference between the new cost share and the old cost share for August, September, October, and November.

Example 3: Shana was determined eligible for WWWMA in February. She had private insurance which covered treatment of breast or cervical cancer, but due to a waiting period for preexisting conditions, her treatments were not covered. The waiting period ended July 31, and the private insurance began to cover Shana’s treatment effective August 1. Shana did not report this to her worker, so Medicaid continued to pay some service costs for Shana until the worker closed the case effective November 30.

Since her case would have closed August 31 if she had reported the change timely, Shana has an overpayment for September through November. The fee-for-service claims paid for September, October, and November are recoverable.

Example 4: Joe has been a Medicaid member since January 1, 2012. During a December 2013 eligibility review, the agency discovers that Joe won a $10,000 lottery that was paid to him on June 12, 2013. Joe never reported the receipt of these lottery winnings and still has about $8,000 from the lottery proceeds. The agency verifies that Joe’s nonexempt assets have been in excess of the $2,000 Medicaid asset limit since June 12, 2013, and sent him a Notice of Decision, advising him that his Medicaid eligibility is ending effective January 31, 2014. The overpayment amount that is subject to recovery is the total of all Medicaid benefits that were received by Joe from August 1, 2013, through January 31, 2014. June 2013 and July 2013 are not included in the overpayment period because Joe had 10 days to report the change that he had won a lottery. If Joe would have reported this change timely (no later than June 22, 2013), the earliest that the agency could have terminated Joe’s eligibility with proper notice would have been July 31, 2013.

Fraud

Fraud exists when an applicant, member, or any other person responsible for giving information on the member's behalf does any of the following:

Intentionally makes or causes to be made a false statement or representation of fact in an application for a benefit or payment.
Intentionally makes or causes to be made a false statement or representation of a fact for use in determining rights to benefits or payments.
Having knowledge of an event affecting initial or continued right to a benefit or payment and intentionally failing to disclose such event.
Having made application to receive a benefit or payment and intentionally uses any or all of the benefit or payment for something other than the intended use and benefit of such persons listed on the application.

Member Loss of an Appeal

A member may choose to continue to receive benefits pending an appeal decision. If the appeal decision is that the member was ineligible, the benefits received while awaiting the decision can be recovered. If an appeal results in an increased patient liability, cost share, or premium, recover the difference between the initial amount and the new amount.

22.2.1.2 Non-Recoverable Overpayments

Do not initiate recovery for a Medicaid overpayment if it resulted from a non-member error, including the following situations:

The member reported the change timely, but the worker could not close the case or reduce the benefit due to the 10-day notice requirement.
Agency error (keying error, math error, failure to act on a reported change, etc).
Normal prospective budgeting projections based on best available information.
A change in the Medicaid category if the benefits in the new category are the same as the original, and the post-eligibility contribution, if any, remains the same.

Example 5: A Medicaid EBD member reports on March 25, 2014 that they have received a $50,000 inheritance on March 23, 2014. The agency sends the member the required Notice of Decision discontinuing their eligibility effective April 30, 2014. Even though the member had excess assets during March and April 2014, there is no Medicaid overpayment for those months because the change was reported timely, and the agency was required to provide appropriate and timely notice before discontinuing the member’s eligibility. Benefits issued only because of our timely notice requirements are not overpayments and are not subject to recovery.

22.2.2 Overpayment Calculation

22.2.2.1 Overpayment Period

22.2.2.2 Overpayment Amount

22.2.2.2.1 Institutional Overpayments

22.2.2.2.1.1 Overpayment as a Result of Misstatement or Omission of Fact

22.2.2.3 Deductible

22.2.2.4 Premiums

22.2.2.4.1 Overpayments for Individuals Eligible for FPOS Benefits

22.2.2.4.2 Overpayments for QMB cases

22.2.2.5 Determining Liable Individual

22.2.2.1 Overpayment Period

If the overpayment is a result of a misstatement or omission of fact during an initial Medicaid application, determine the period for which the benefits were determined incorrectly and determine the appropriate overpayment amount (22.2.2.2 Overpayment Amount).

The ineligible period should begin with the application month.

Failure to Report

For ineligible cases, if the overpayment is a result of failure to report a change, calculate the date the change should have been reported and which month the case would have closed or been adversely affected if the change had been reported timely.

Fraud/IPV

For ineligible cases, if the overpayment was the result of fraud, determine the date the fraudulent act occurred. The period of ineligibility should begin the date the case would have closed or been adversely affected allowing for proper notice. If an overpayment exists, but the case is still being investigated for fraud, establish the claim so collection can begin promptly. Prosecution should not delay recovery of a claim.

22.2.2.2 Overpayment Amount

Use the simulation function in CARES to determine a member’s eligibility, nursing home liability, premium or cost share (if applicable) based on the corrected information ( CARES Guide Chapter VIII, 1.4.1). Use the actual income received by the member in determining if an overpayment has occurred.

To calculate the overpayment amount, use the RC ( member claims ) screen on MMIS. The overpayment amount depends on the Medicaid category and whether the case is fee-for-service or enrolled in a HMO.

If a case was ineligible due to excess income recover :

The lesser of FFS services Medicaid paid or the amount the member would have paid toward a deductible (If eligible for a deductible)

The lesser of what the member paid or would have paid toward the deductible and the amount Medicaid has spent on HMO capitation payments.

If a case/individual was ineligible for reasons other than excess income or not eligible for a deductible) recover the:

Amount paid for the medical services provided if the case is fee-for-service.

Managed care organization’s capitation rate, less any contribution made by the member (ex. premium, cost share) if the case members are enrolled in a Medicaid managed care organization. The capitation rate is the monthly amount Medicaid pays to the member’s managed care organization.

For the overpayment amounts for institutional (22.2.2.1 Overpayment Period), waiver (22.2.2.1 Overpayment Period), BadgerCare (22.2.2.3 Deductible), Medicaid Purchase Plan (22.2.2.3 Deductible), deductible (22.2.2.2 Overpayment Amount) and FPOS cases see the appropriate sections.

22.2.2.2.1 Institutional Overpayments

The overpayment amount for an institutional case is the amount Medicaid paid.

Note: Patient liability should not be subtracted from the claims paid by Medicaid when determining the overpayment amount.

22.2.2.2.1.1 Overpayment as a Result of Misstatement or Omission of Fact

If a misstatement or omission of fact results in an increased nursing home liability or waivers cost share, the difference between the correct liability/cost share amount and the one the member originally paid is the overpayment amount.

Do not send a F-10110 (formerly DES 3070) to retroactively increase the patient liability on MMIS.

Family Care

For Family Care cases in which an omission of fact results in an increased Family Care liability or cost share, complete the following:

Recalculate the cost share or Family Care liability for any months that would have been affected.
Calculate the difference between the paid cost share or Family Care liability amount and the new cost share or Family Care liability amount.
Send the member a notice indicating the correct cost share for the months in question. Indicate on the notice the cost share amount still owed to the Care Management Organization ( CMO ) for each month in question. Do not attempt to recover the overpayment.
Report the new cost share amount to the CMO.

It is the CMO’s responsibility to collect the difference between the cost share already paid and the correctly calculated cost share amount. This amount is not an overpayment of Medicaid funds, but is the amount that the member owes the CMO directly.

22.2.2.3 Deductible

If a member error increases the deductible before the deductible is met, there is no overpayment. Recalculate eligibility and notify the member of the new deductible amount.

If the member met the incorrect deductible and Medicaid paid for services after the deductible had been met, there is an overpayment. Recover the difference between the correct deductible amount and the previous deductible amount or the amount of claims over the six month period (whichever is less) .

If the member was ineligible for the deductible, determine the overpayment amount. If the member prepaid his or her deductible, deduct any amount he or she paid toward the deductible from the overpayment amount.

22.2.2.4 Premiums

If a BadgerCare or MAPP (MAPP offers people with disabilities who are working or interested in working the opportunity to obtain health care coverage through the Wisconsin Medicaid Program.) case was still open for the timeframe in question, but there was an increase in the premium, recover the difference between the premium paid and the amount owed for each month in question. To determine the difference, determine the premium owed and view the premium amount paid on CARES screen AGPT.

BadgerCare

If the case was ineligible for BC, recover the amount of medical claims paid by the state and/or the capitation rate. Deduct any amount paid in premiums (for each month in which an overpayment occurred) from the overpayment amount (22.2.2.2 Overpayment Amount).

The overpayment amount is the difference between the premium paid and premium owed even if the premium that was paid was $0.

Example 7: Tom and his family became eligible for BadgerCare in June 2004 without a premium. In his application Tom failed to disclose income from a second job which would have resulted in a $100 per month premium. This new information was discovered in July 2004.

Overpayment Calculation

$100 premium owed for June

+ $100 premium owed for July

$200 Total premium owed

- $ 0 premium paid

$200 Overpayment

MAPP

If the case was ineligible for MAPP, recover the amount of medical claims paid by the state. Deduct any amount he or she paid in premiums (for each month in which an overpayment occurred) from the overpayment amount.

22.2.2.4.1 Overpayments for Individuals Eligible for FPOS Benefits

If an individual or case was ineligible for Medicaid or BC but would have been eligible for FPOS benefits, the calculation of the ultimate Medicaid overpayment amount is as follows:

If the incorrect/overpaid Medicaid benefits were "fee for service” medical claims paid by the state, recover the amount of benefits that were actually paid by the state minus any premiums which the member may have paid and the amount of any actual FPOS services that were provided.

If the incorrect /overpaid Medicaid benefits were paid by an HMO, recover the HMO capitation rate paid by the state minus any premiums which the member may have paid and the "average” (currently $28.60) monthly cost of Medicaid FPOS services.

22.2.2.4.2 Overpayments for QMB cases

The overpayment amount for QMB cases is:

1. 1. 1. Medicare Part A premium if paid by the state (some are free others are paid by the state).

plus

1. 1. 1. Medicare Part B premium

plus

1. 1. 1. Medicare deductibles

plus

1. 1. 1. Medicare Co-insurance

Use the MMIS RC screen to determine if any Medicare deductibles and co-insurance payments were made by the state.

22.2.2.5 Determining Liable Individual

Except for minors, collect overpayments from the Medicaid member, even if the member has authorized a representative to complete the application or review for him or her.

Example 8: Sofie applied for Medicaid in December, and at that time designated her daughter, Lynn, as her authorized representative . Lynn did not report some of her mother’s assets when she applied, which would have resulted in Sofie being ineligible for Medicaid. Sofie was determined to be ineligible for Medicaid from December through March. Recover from Sofie for any benefits that were provided to her from December through March.

If a minor received Medicaid in error, make the claim against the minor’s parent(s) or legally responsible relative if the parent or legally responsible relative was living with the minor at the time of the overpayment.

22.2.3 Overpayment Process

22.2.3.1 Overpayment Process Introduction

22.2.3.2 Member Notice

22.2.3.1 Overpayment Process Introduction

Follow the instructions in Chapter VIII of the CARES Member Assistance for Re-employment & Economic Support Guide to enter the claim. CARES issues a repayment agreement the first business day of the month following the date the claim was entered. You are responsible to:

Enter the claim into CARES.
Send a manual Medicaid Overpayment Notice (F-10093 ) indicating the reason for the overpayment and the period of ineligibility.
Record the completed and signed repayment agreement on CARES screen BVPA within five days of receipt.
Record payments on CARES screen BVCP within five days of receipt.

CARES will:

Track the issuance of notices of non-payment and send automated dunning notices (i.e. past due notices).
Refer past due claims for further collection action (i.e. tax intercept) to the Central Recoveries Enhanced System (CRES ).
Close the claim when the balance is paid.

22.2.3.2 Member Notice

Notify the member or the member’s representative of the period of ineligibility, the reason for his or her ineligibility, the amounts incorrectly paid, and request arrangement of repayment within a specified period of time.

22.2.4 Refer to District Attorney (DA)

See IMM Chapter 3, Public Assistance Fraud Program for referral criteria when fraud is suspected. The agency may refer the case to the state fraud investigation service provider where fraudulent activity by the member is suspected. If the investigation reveals a member may have committed fraud, refer the case to the district attorney or corporation counsel for investigation. The district attorney or corporation counsel may prosecute for fraud under civil liability statutes. The agency may seek recovery through an order for restitution by the court of jurisdiction in which the member or former member is being prosecuted for fraud.

22.2.5 Fair Hearing

The IM Agency’s decision concerning ineligibility and amounts owed may be appealed through a fair hearing. During the appeal process the agency may take no further recovery actions pending a decision.

22.2.6 Agency Retention

The IM Agency can retain 15% of the payments recovered. See IMM Chapter 3.3.8 Local Agency Retention.

22.2.7 Restoration of Benefits

If it is determined that a member’s benefits have been incorrectly denied or terminated, restore his or her Medicaid from the date of the incorrect denial or termination through the time period that he or she would have remained eligible.

If the member was incorrectly denied or terminated for BC or MAPP The Medicaid Purchase Plan (MAPP) offers people with disabilities who are working or interested in working the opportunity to obtain health care coverage through the Wisconsin Medicaid Program. with a premium obligation. Allow the member to pick which months he or she would like to receive benefits. Collect all premiums owed for all prior months before certifying the member for the months he or she chose.

If a member already paid for a Medicaid covered service, inform the member that he or she will need to contact his or her provider to bill Medicaid for services provided during that time. A Medicaid provider must refund the amount that Medicaid will reimburse for the service. The provider may choose to refund up to the full amount billed to the member, but that decision is entirely optional.

22.2.8 Incorrect Member Contribution

22.2.8.1 Premiums

22.2.8.1.1 BadgerCare

22.2.8.1.2 Medicaid Purchase Plan (MAPP)

22.2.8.1 Premiums

If it is determined that a premium amount was incorrectly calculated for BC or MAPP The Medicaid Purchase Plan (MAPP) offers people with disabilities who are working or interested in working the opportunity to obtain health care coverage through the Wisconsin Medicaid Program. and would result in a refund for the member, determine the correct premium amount for each month in which it was incorrect.

When reporting the refund to the BadgerCare or MAPP Unit, include the:

The member’s Social Security Number.
Months for which a refund needs to be issued.
New premium amount.
Old premium amount.

Indicate whether there is a hardship situation that requires the refund to be processed more quickly.

22.2.8.1.1 BadgerCare

If the premium was recalculated and reduced for prior month(s), report the premium refund to the BadgerCare Unit by:

Telephone: 1 (888) 907-4455

Fax: (608) 251-1513

When submitting a fax, write " Attn: BC Premium Refunds”.

22.2.8.1.2 Medicaid Purchase Plan (MAPP)

If the premium was recalculated and reduced for prior month(s), report the premium refund to the MAPP Unit by:

Telephone: 1 (888) 907-4455

Fax: (608) 251-8185

When submitting a fax, write "Attn: MAPP Premium Refund”

This page last updated in Release Number: 15-01

Release Date: 06/10/2015

Effective Date: 06/10/2015