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Medicare Drug Program News
Judge Gives CMS Reprieve from Sending Money Back to
Seniors Who Paid Back Medicare Refunds
U.S. Court of Appeals sets January for arguments
over Medicare's erroneous refunds
 October 6, 2006 - The U.S. Court of Appeals for the
District of Columbia Circuit on Wednesday issued a temporary hold on an
order by a lower court that
CMS must
inform 230,000 Medicare beneficiaries who received erroneous
reimbursements of their Medicare prescription drug benefit premiums of
their right to request a waiver of recovery of the funds, the Washington
Post reports.
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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.
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In addition, under the hold, CMS does not have to
return erroneous reimbursements recovered from the affected Medicare
beneficiaries immediately (Washington Post, 10/6).
The affected Medicare beneficiaries received a
total of $50 million in erroneous reimbursements in August as the result
of a computer error. In response, CMS sent letters to the affected
Medicare beneficiaries that instructed them to return the erroneous
reimbursements, which averaged $215, to the federal government by Sept.
30.
The
Gray Panthers
and the
Action Alliance of
Senior Citizens last month filed a lawsuit that seeks to
block the required return of the erroneous reimbursements. According to
the lawsuit, federal law allows for waiver of recovery of funds when
beneficiaries are not at fault for overpayments.
U.S. District Court Judge Henry Kennedy on Sept. 28
ordered CMS Administrator Mark McClellan to send letters immediately to
the affected Medicare beneficiaries to inform them of their right to
request a waiver under federal law.
In addition, he said that erroneous reimbursements
returned to the federal government "must be immediately returned to the
beneficiaries so that they may decide whether to request waiver" (Kaiser
Daily Health Policy, 9/29). CMS appealed the decision (Freking,
AP/Houston
Chronicle, 10/5).
Temporary Hold
The appeals court issued the temporary hold to allow a three-judge
panel to review arguments in the lawsuit (Washington Post, 10/6). The
court also scheduled a trial for January. CMS officials said that the
agency will continue efforts to recover erroneous reimbursements from
the affected Medicare beneficiaries.
According to the AP/Chronicle, CMS to date has
recovered erroneous reimbursements from about half of the affected
Medicare beneficiaries. McClellan said, "CMS remains flexible in working
with each beneficiary to resolve their premium payment issue," adding,
"This includes providing the option of making premium payments over many
months if that is what the beneficiary prefers" (AP/Houston Chronicle,
10/5).
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