Medicare will NOT seek refunds of January-February overpayments to physicians

The Centers for Medicare and Medicaid Services (CMS) have announced that the government will not try to recoup about $50 million in overpayments made to physicians for services provided in January and February of this year. This means that the Medicare carriers will not automatically adjust January-February overpayments, which they were otherwise expected to do starting on July 1st. (See Practice Management column in April 2003 NEWSLETTER.)

The overpayments resulted from the fact that the 2002 conversion factors did not change until March. (Organized medicine had urged the delay, to enable Congress to override formula-driven conversion factor cuts by legislation). Thus, the anesthesia conversion factor increased from $16.60 to $17.05 and the general conversion factor from $36.20 to $36.79 only effective March 1st. Claims for services provided in the first two months of the year that the carriers did not process until March, however, were incorrectly paid at the higher March rates. The carriers' software simply did not allow them to match the conversion factor to the date of service.

In a few instances, the delay created underpayments to physicians, and the carriers will adjust incorrectly-paid claims brought to their attention.

The automatic mass adjustments of the overpaid amounts would have produced demand letters to physicians - and corresponding notices to patients - for millions of claims. The American Medical Association deserves credit for persuading CMS to avert the administrative and patient relations chaos that we were facing.