POLICY HISTORY FOR 6.2.1 OVERPAYMENTS

Release 05-02

6.2.1 Overpayments

6.2.1.1 Recoverable Overpayments

6.2.1.2 Non-Recoverable Overpayments

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

1. Concealing or not reporting income or assets.

2. Failure to report a change in income or assets.

3. Providing misinformation, at the time of application, regarding any information that would affect eligibility.

6.2.1.1 Recoverable Overpayments

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

1. Client Error

Client error exists when an applicant, recipient, or any other person responsible for giving information on the client’s behalf, unintentionally misstates facts, which results in the client receiving a benefit that s/he is not entitled to or more benefits than s/he us entitled to.  Client error occurs when there is a:
 

1. Misstatement or omission of facts by a client, or any other person responsible for giving information on the client’s behalf, at a MA application or review.
    

2. Failure on the part of the client, or any person responsible for giving information on the client’s behalf,  to report changes in income or assets.
    

A MA client is responsible for notifying his/her Economic Support ( ES ) 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).

2. Fraud

Fraud is also known as Intentional Program Violation ( IPV ).   

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

1. Intentionally makes or causes to be made a false statement or representation of fact in an application for a benefit or payment.

2. Intentionally makes or causes to be made a false statement or representation of a fact for use in determining rights to benefits or payments.

3. Having knowledge of an event affecting initial or continued right to a benefit or payment and intentionally failing to disclose such event. 

4. 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.

If there is a suspicion that fraud has occurred, see 6.2.4 for information about referral to the District Attorney ( DA ).
 

3. Client Loss of an Appeal

Benefits a client receives due only to a fair hearing order can be recovered if the client loses the appeal.

A client may choose to continue to receive benefits pending an appeal decision. If the appeal decision is that the client 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.

6.2.1.2 Non-Recoverable Overpayments

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

1. The client reported the change timely, but you could not close the case or reduce the benefit due to the 10-day notice requirement.

2. Agency error (keying error, math error, failure to act on a reported change, etc).

3. Normal prospective budgeting projections based on best available information.

4. A change in the MA category if the benefits in the new category are the same as the original, and the post-eligibility contribution, if any, remains the same.

This page last updated in Release Number : 05-01

Release Date: 01/11/05

Effective Date: 01/11/05