Withholding Medicare Payments to Recover Medicaid Overpayments

60.2 - Withholding Medicare Payments to Recover Medicaid Overpayments (Rev. 29, 01-02-04) Section 1885 of title XVIII of the Act and 42 CFR §405.375 provide for CMS to withhold Medicare payments under both Part A and B to recover Medicaid overpayments that a Medicaid agency has been unable to collect. The RO determines if withholding the Medicare payments due the overpaid Medicaid institution is appropriate. Where it determines that withholding the Medicare payments is proper, it advises the FI/carrier to withhold the Medicare payments to the institution by the lesser of: • The amount of the Medicare payments to which the institution would otherwise be entitled; • The total Medicaid overpayment. The FI/carrier shall terminate the withholding action if the Medicaid overpayment is recovered or the RO advises it to do so. It shall submit to the RO, at least monthly until the overpayment is recovered, the amount of Medicare payments withheld. If no claims are received in any month, it informs the RO that no payments were withheld. The Medicaid agency establishes procedures to assure the return to the institution or person amounts withheld that are ultimately determined to be in excess of the Medicaid overpayments. The FI/carrier shall establish internal procedures to account for the Medicare amounts withheld under this section.