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State of Wisconsin |
HISTORY |
The policy on this page is from a previous version of the handbook.
An overpayment occurs when Medicaid benefits are paid for a person 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:
Note: Non-Medicaid Family Care no longer exists as of May 1, 2003. However, ERP could recover from those who received benefits under this program prior to May 1, 2003.
Initiate recovery for a Medicaid overpayment if the incorrect payment resulted from one of the following:
Applicant or Member Error. Applicant or member error exists when an applicant , member , or any other person responsible for giving information on the applicant's or 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 to.
Failure to report nonfinancial facts that impact eligibility or cost share amounts is a recoverable overpayment.
Applicant or member error occurs when there is a:
A Medicaid member is responsible for notifying his or her IM agency 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).
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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. |
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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. |
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Example 3: Shana was determined eligible for WWWMA in February. She had private insurance that 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. |
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Example 4: Joe has been a Medicaid member since January 1, 2012. During a December 2013 eligibility review, the agency discovered 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 verified 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 being discontinued 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:
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 or the amount of claims and HMO capitation payments the state paid for each month (whichever is less).
Note: As of February 1, 2002, there should be no compromise of overpayment claims. If it is determined that a recoverable overpayment exists, recovery may not be waived.
Do not initiate recovery for a Medicaid overpayment if it resulted from a non-member error, including the following situations:
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Example 5: A Medicaid EBD member reports on March 25, 2014, that he received a $50,000 inheritance on March 23, 2014. The agency sends the member the required Notice of Decision discontinuing his 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 the timely notice requirements are not overpayments and are not subject to recovery. |
Misstatement or Omission of Fact
If the overpayment is a result of a misstatement or omission of fact during an initial Medicaid application or renewal, determine the period for which the benefits were determined incorrectly and determine the appropriate overpayment amount (Section 22.2.2.2 Overpayment Amount). The ineligibility period could begin as early as the first month of eligibility, including any backdated benefits.
Failure to Report
For ineligible cases, if the overpayment is a result of failure to report a required change, calculate the date the change should have been reported and the month the case would have closed or been adversely affected if the change had been reported timely.
Fraud
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.
Use the actual income that was reported or required to be reported when determining if an overpayment has occurred. The amount of recovery may not exceed the amount of the Medicaid benefits incorrectly provided.
If a case was ineligible due to excess income, recover whichever is less of the following:
To calculate the overpayment amount, use ForwardHealth interChange data from the Total Benefits Paid by Medicaid Report(s). The overpayment amount depends on the Medicaid category and whether the case is fee-for-service or enrolled in an HMO or MCO.
If a case or person was ineligible for reasons other than excess income or not eligible for a deductible, recover the amount of fee-for-service claims paid by the state and any HMO and MCO capitation rates the state paid. Use ForwardHealth interChange data from the Total Benefits Paid by Medicaid Report(s). Deduct any contribution made by the member (for example, premium or cost share) for each month in which an overpayment occurred from the overpayment amount.
For the overpayment amounts for institutional (Section 22.2.2.1 Overpayment Period), home and community-based waivers (Section 22.2.2.2.1.2 Family Care, Family Care Partnership, PACE, and IRIS), Medicaid Purchase Plan (Section 22.2.2.2.4 [MAPP]), and deductible (Section 22.2.2.3 Deductible) cases see the appropriate sections.
The overpayment amount for an institutional case is the amount Medicaid paid.
If a member failed to report a divestment that would have resulted in a penalty period and the member is still otherwise eligible for long-term care, do not recover benefits Medicaid paid during the time in which the penalty period would have been served. Instead, impose the penalty period for ongoing eligibility as outlined in Section 17.5.4 Penalty Period Begin Date for Members.
Note: Patient liability should not be subtracted from the claims paid by Medicaid when determining the overpayment amount.
If a member is still eligible for long-term care benefits but a misstatement or omission of fact results in an increased nursing home liability or waivers cost share, the difference between the correct liability or cost share amount and the one the member originally paid is the overpayment amount.
Do not send a Medicaid/BadgerCare Plus Eligibility Certification form (F-10110 [formerly DES 3070]) to retroactively increase the patient liability on MMIS.
For Family Care, Family Care Partnership, PACE, or IRIS cases in which an omission of fact results in either of the following conditions:
Follow the instructions in Process Help, Section 31.3.6.1.
An individual may choose to continue to receive benefits pending an appeal decision. If the appeal decision is that the individual was ineligible, the benefits received while awaiting the decision can be recovered.
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 lessor of:
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.
| Example 6: Sean had a deductible of $2,000 for a six-month period. He met the deductible by paying $1,000 and sending in verification of $1,000 in outstanding medical bills. An IM worker discovers an undisclosed bank account that puts Sean over the asset limit for the program. After determining his overpayment amount, the IM worker must decrease the amount overpaid by the $1,000 that Sean prepaid toward his deductible. The IM worker will not decrease the overpayment amount by any of the medical bills that helped Sean meet his deductible. |
If the deductible was prepaid with a check that is returned for insufficient funds, an overpayment may have occurred. Discontinue the member’s eligibility, determine whether Medicaid paid for any benefits on behalf of the member and, if so, establish a claim for benefit recovery.
If a person was ineligible for MAPP, recover the amount of fee-for-service claims and any HMO capitation payments paid by the state. Deduct any amount the person paid in premiums for each month in which an overpayment occurred from the overpayment amount.
If a MAPP member was still eligible for the time frame in question, but there was an increase in the premium, there is an overpayment. Recover the lessor of:
Premium adjustments are only made on months where there is an overpayment. If there is a month without an overpayment, then the premium calculation for that month should not be adjusted.
| Example 7: Stephanie was eligible for MAPP with a premium of $50. She forgot to report a part-time job that would have increased her MAPP premium to $75 a month. During the overpaid months, the state paid a monthly capitation rate of $200. For the months during the overpayment time period, the overpayment each month is $25 because the difference between the premium paid and the premium owed each month is $25, and $25 is less than the monthly capitation rate of $200. |
The overpayment amount for QMB cases is both the following:
Except for minors, collect overpayments from the Medicaid member, even if the member has authorized a representative to complete the application or renewal for him or her. Join liability for married couples is as follows:
Legally married spouses living in the household at the time the overpayment occurred are jointly liable for overpayments.
For cases for which spousal impoverishment rules have been applied, the legally married spouses who signed the application or renewal are jointly liable even though one of the spouses may be institutionalized.
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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–March. Recover from Sofie any benefits that were provided to her from December–March. Even though Lynn failed to report the information as the authorized representative, Lynn is not liable. |
| Example 9: Mary and Herman are married, living together, and eligible for SSI-related Medicaid without a deductible. At their annual renewal, the IM worker discovers an undisclosed pension that would have pushed the couple above the income limit for the program, requiring them to meet a deductible before being eligible. Because they are married and were living in the same household at the time of the overpayment, Mary and Herman will be jointly liable for the entire overpayment that is calculated for the time period in question. |
| Example 10: Jill and Samuel are married and living together. Jill is eligible for SSI-related Medicaid. Samuel receives federal and state SSI. At renewal, the IM worker discovers that Jill receives disability income from her former employer. This income was not disclosed at application. Because they are married and were living in the same household at the time of the overpayment, both Jill and Samuel are jointly liable for any overpayment calculated for the benefits incorrectly paid to Jill. |
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.
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.
Close the claim when the balance is paid.
Notify the member or the member’s representative of the period of ineligibility, the reason for his or her ineligibility, and the amounts incorrectly paid and request arrangement of repayment within a specified period of time.
See Income Maintenance Manual Chapter 13, Public Assistance Fraud 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.
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.
The IM agency can retain 15 percent of the payments recovered (see Income Maintenance Manual, Section 13.8 Local Agency Retention.)
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 BadgerCare Plus or MAPP (MAPP offers people with disabilities who are working or interested in working the opportunity to obtain health care coverage through Wisconsin Medicaid.) with a premium obligation, allow the member to pick the months in which 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.
If a MAPP premium is calculated in an amount that is incorrect and higher than it should have been, the excess amount must be refunded to the member when the error is discovered. See Process Help Section 25.4.3 .
The information concerning the Medicaid program provided in this handbook release is published in accordance with: Titles XI and XIX of the Social Security Act; Parts 430 through 481 of Title 42 of the Code of Federal Regulations; Chapters 46 and 49 of the Wisconsin Statutes; and Chapters HA 3, DHS 2, 10 and 101 through 109 of the Wisconsin Administrative Code.
Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.
Publication Number: P-10030