Handling Of Overpayments And Underpayments For Specified Providers

This section of rule applies only to providers that are retrospectively cost settled. (7-1-26) 01. Interest Charges. Medicaid charges interest on overpayments, and pays interest on underpayments, as follows: (7-1-26) a. If full repayment from an indebted party is not received within sixty (60) days after the provider received the Department reimbursement notice, interest accrues from the receipt date and is charged on any unpaid settlement balance for each thirty (30)-day period of delayed payment. Periods of less than thirty (30) days are treated as a full thirty (30)-day period, and the full interest charge is applied to any unpaid balance. Each payment is applied first to accrued interest, then to the principal. Interest accrued on overpayments and interest on funds borrowed by a provider to repay overpayments are not allowable interest expenses. (7-1-26) b. When the Department determines an overpayment exists, it may waive interest charges if the administrative costs to collect exceeds the charges. (7-1-26) c. The interest rate on overpayments and underpayments is compounded monthly. (7-1-26) d. Balance and interest are retroactively adjusted to equal the amounts that would have been due based on any changes that occurred due to results of a final determination in an administrative or judicial appeals process. Interest penalties only apply to unpaid amounts and are subordinated to final interest determinations made in a judicial review process. (7-1-26) 02. Recovery Methods. One (1) of the following will be used for recovery of overpayments: (7-1-26) a. Upon receiving a notice of program reimbursement, a provider voluntarily refunds, in a lump sum, the entire overpayment to the Department. (7-1-26) b. The provider may: (7-1-26) i. Request in writing to make overpayment recovery over a period of twelve (12) months or less; and (7-1-26) ii. Submit documentation demonstrating that their financial integrity would be irreparably compromised if repayments occurred over a shorter time period. (7-1-26) c. If a provider does not respond to the program reimbursement notice within thirty (30) days of receipt, the Department initiates recovery of the entire unpaid balance in addition to accrued interest. (7-1-26) 032. – 034. (RESERVED)