[Code of Federal Regulations]

[Title 42, Volume 2]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR405.377]



[Page 96-97]

 

                         TITLE 42--PUBLIC HEALTH

 

                    CHAPTER IV--CENTERS FOR MEDICARE

                          & MEDICAID SERVICES,

                        DEPARTMENT OF HEALTH AND

                             HUMAN SERVICES

 

PART 405_FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED--Table of 

Contents

 

Subpart C_Suspension of Payment, Recovery of Overpayments, and Repayment 

                        of Scholarships and Loans

 

Sec. 405.377  Withholding Medicare payments to recover Medicaid 

overpayments.



    (a) Basis and purpose. This section implements section 1885 of the 

Act, which provides for withholding Medicare payments to certain 

Medicaid providers that have not arranged to repay Medicaid overpayments 

as determined by the Medicaid State agency or have



[[Page 97]]



failed to provide information necessary to determine the amount (if any) 

of overpayments.

    (b) When withholding may be used. CMS may withhold Medicare payment 

to offset Medicaid overpayments that a Medicaid agency has been unable 

to collect if--

    (1) The Medicaid agency has followed the procedure specified in 

Sec. 447.31 of this chapter; and

    (2) The institution or person is one described in paragraph (c) of 

this section and either--

    (i) Has not made arrangements satisfactory to the Medicaid agency to 

repay the overpayment; or

    (ii) Has not provided information to the Medicaid agency necessary 

to enable the agency to determine the existence or amount of Medicaid 

overpayment.

    (c) Institutions or persons affected. Withholding under paragraph 

(b) of this section may be made with respect to any of the following 

entities that has or had in effect an agreement with a Medicaid agency 

to furnish services under an approved Medicaid State plan:

    (1) An institutional provider that has in effect an agreement under 

section 1866 of the Act. (Part 489 (Provider and Supplier Agreements) 

implements section 1866 of the Act.)

    (2) A physician or supplier that has accepted payment on the basis 

of an assignment under section 1842(b)(3)(B)(ii) of the Act. (Section 

424.55 sets forth the conditions a supplier agrees to in accepting 

assignment.)

    (d) Amount to be withheld. (1) CMS contacts the appropriate 

intermediary or carrier to determine the amount of Medicare payment to 

which the institution or person is entitled.

    (2) CMS may require the intermediary or carrier to withhold Medicare 

payments to the institution or person by the lesser of the following 

amounts:

    (i) The amount of the Medicare payments to which the institution or 

person would otherwise be entitled.

    (ii) The total Medicaid overpayment to the institution or person.

    (e) Notice of withholding. If CMS intends to withhold payments under 

this section, it notifies by certified mail, return receipt requested, 

the institution or person and the appropriate intermediary or carrier of 

the intention to withhold Medicare payments and follows the procedure in 

Sec. 405.374. The notice includes--

    (1) Identification of the institution or person; and

    (2) The amount of Medicaid overpayment to be withheld from payments 

to which the institution or person would otherwise be entitled under 

Medicare.

    (f) Termination of withholding. CMS terminates the withholding if--

    (1) The Medicaid overpayment is completely recovered;

    (2) The institution or person enters into an agreement satisfactory 

to the Medicaid agency to repay the overpayment; or

    (3) The Medicaid agency determines that there is no overpayment 

based on newly acquired evidence or a subsequent audit.

    (g) Disposition of funds withheld. CMS releases amounts withheld 

under this section to the Medicaid agency to be applied against the 

Medicaid overpayment made by the State agency.



[61 FR 63747, Dec. 2, 1996]