Medicaid program; Medicaid overpayment reporting requirements--Health Care Financing Administration. Proposed rule.

We are proposing an amendment to Medicaid regulations which would require the States to establish procedures to identify overpayments to providers of services and report them to HCFA. The amendment would revise current policy that requires medical assistance grant awards to be reduced at the time overpayments are reported. The proposed regulations provide that provider overpayments would not be offset against a grant award until the States have had a reasonable period of time to verify and resolve the debt (i.e., 12 months for institutional providers and 90 days for non-institutional providers). Some States do not have effective mechanisms for identifying and reporting overpayments, and some States do not report overpayments timely. The purpose of these proposed regulations is to reduce program costs to both the State and Federal governments by assuring that all overpayments are identified and reported promptly, and that grant awards are adjusted appropriately, and thereby to encourage States to establish or improve controls that will reduce the number and amount of ovepayments.