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Medicare Drug Program News
Money Mistakenly Returned by Medicare, Then Returned
by Seniors, Must Go Back to Seniors Says Judge
CMS must stop collections and send letter to
230,000 in drug program affected to advise of waiver option
 September
29, 2006 A federal judge has ruled that people in the Medicare drug program who were mistakenly sent $50
million in refunds have the opportunity to seek a "waiver of recovery."
Basically, they can claim it would be a hardship for them to return the
money. Judge Henry H. Kennedy, Jr. ordered the Centers for Medicare &
Medicaid Services to send a letter to the 230,000 senior citizens and
others who received the refunds telling them that have a right to
request a waiver. The Washington, D.C. judge also ordered CMS to send
back to the individuals any money that has been returned.
In previous action on September 18, the judge
responded to a lawsuit filed by the Center for Medicare Advocacy and
ordered CMS to stop trying to collect the money mistakenly returned to
the seniors as refunds of their drug program premiums. The average
amount appears to be about $215 for each of the 230,000 beneficiaries.
The judge took this further action late Wednesday
after a hearing on the preliminary injunction motion. The lawsuit was
filed by CMA on behalf of the Action Alliance of Senior Citizens and
Gray Panthers.
Medicare sent out a letter in late August demanding
that the 230,000 beneficiaries who received the premium refunds repay
them by September 30. The letter did not include a statement that the
Medicare statute requires recovery of incorrect payments such as these
to be waived in specified circumstances.
The CMA wrote a letter send to those the government
had listed as being sent refunds and said, "Waiver of the overpayment
may be available to a beneficiary who was without fault in causing the
overpayment and where repayment would be against equity and good
conscience.
"Beneficiaries who believe they meet the
requirements for a waiver should request a waiver when they call the
specially-designated phone number. If they are told they cannot request
a waiver or if the waiver request is denied, they should file an
appeal."
Waiver of recovery where the beneficiary is not at
fault in causing the overpayment and where certain other conditions
exist is provided by statute for many government benefit programs in
recognition of the hardship that recovery might cause for beneficiaries
with fixed low incomes, according to CMA.
The Medicare Payment Advisory Commission reports
that 51% of Medicare beneficiaries have incomes under 200% of federal
poverty limits.
Gill Deford, an attorney with the Center for
Medicare Advocacy, Inc., said: The judge did the right thing. The
courts said 30 years ago that beneficiaries have to be informed of their
right to a waiver when they receive an incorrect payment. The government
just compounded its original mistake when it didnt tell people of this
basic right.
The erroneous premium refunds were a result of a
computer error involving the Part D prescription drug program. The Part
D enrollees receiving refunds are among those who have their monthly
premiums deducted from their Social Security benefits. The amount of
their monthly premium was mistakenly sent to them in August.
Claiming that the Medicare waiver statute did not
apply to mistaken Part D premium refunds, CMS then demanded that the
money, which averaged $215 per person, be returned.
Before filing the lawsuit, CMA Executive Director
Judith Stein contacted CMS, including Administrator Mark McClellan, both
in writing and by phone in order to request that the right to a waiver
be included in the original letter, but CMS declined to take action on
the concerns.
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