Background

Overpayments generally occur when a final determination has been made resulting in an amount due the Medicare program. An overpayment determination can result from the following transaction types; Tentative Settlement, Interim Rate Adjustment, Final Settlement (NPR) and any other determination which results in the issuance of a written determination and a written demand for payment.

Extended Repayment Plans (ERPs) are an option for returning overpaid money to Medicare. Ideally, a request for an ERP should be made immediately after receiving the initial demand or refund letter, however, ERPs can be requested at any point in time the overpayment is outstanding. There is not a minimum dollar tolerance level associated with ERP requests. Providers will need to include a copy of their check for the first payment calculated under their proposed extended repayment plan with their ERP request.

Your first payment, referenced “ERP Request,” should be made payable to “Medicare Part A” and mailed with a copy of the demand letter directly to:

MD providers please remit to:  

Highmark Medicare Services   
CASHIER
PO Box 890386
Camp Hill, PA 17089-0386

PA providers please remit to:

Highmark Medicare Services   
CASHIER
PO Box 890385
Camp Hill, PA 17089-0385

Mail a copy of your check and the requested information for the ERP to:

Highmark Medicare Services
Accounts Receivable – Part A
P.O. Box 890063
Camp Hill, PA 17089-0063

Establishing an Extended Repayment Request

A provider is expected to repay any overpayment as quickly as possible. If payment in full is not received within 30 days from the date of determination, interest will be applied to any unpaid balance at the prevailing overpayment interest rate. The fiscal intermediary will then suspend interim payments and amounts recouped will be applied first to accrued interest and then to the principal balance. If the provider cannot refund the total overpayment within 30 days from date of determination, they should request an extended repayment schedule immediately. The proposed repayment schedule must include specified times and amounts of repayments and be submitted in writing for approval. The submission of a request for extended repayment should only be in situations where full payment would cause extreme financial hardship.

The Fiscal Intermediary is required to continue recoupment of the overpayments pending receipt of the documentation and a decision on the extended repayment request. This Provider Notice will explain the procedure to follow to establish an extended repayment request.

Required Documentation Supporting a Request for Extended Repayment.

1. Proposed repayment schedule.
2. Most recent audited financial statements including but not limited to the following information:

Note: Financial package submitted must be accompanied with certification (see exhibit 1) signed by an officer or Administrator of the provider.

Balance sheets--the most current balance sheet and the one for the last complete Medicare reporting period (preferably prepared by the provider's accountant).

Income statements--related to the balance sheets (preferably prepared by the provider's accountant).

Statement Sources and Application of Funds-- for the periods covered by the income statements (see Exhibit 2 for recommended format).

Cash flow statements--for the periods covered by the balance sheets (see Exhibit 3 for recommended format). If the date of the request for an extended repayment schedule is more than 3 months after the date of the most recent balance sheet, a cash flow statement should be provided for all months between that date and the date of the request.

In addition, whether or not the date of the request is more than 3 months after that of the most recent balance sheet, a projected cash flow statement should be included for the 6 months following the date of the request.

Projected cash flow statement--covering the remainder of the current fiscal year. If fewer than 6 months remain, a projected cash flow statement for the following year should be included. (See Exhibit 4 for recommended format.)

Amount of outstanding accelerated payments.

List of restricted cash funds--by amount as of the date of request and the purpose for which each fund is to be used.


List of investments--by type (stock, bond, etc.), amount, and current market value as of the date of the report.

List of notes and mortgages payable--by amounts as of the date of the report, and their due dates.

Schedule showing amounts--due to and from related companies or individuals--included in the balance sheets. The schedule should show the names of related organizations or persons and show where the amounts appear on the balance sheet--such as Accounts Receivable, Notes Receivable, etc.

Schedule showing types--and amounts of expenses paid to related organizations. The names of the related organizations should be shown.

The percentage of occupancy--by type of patient (e.g., Medicare, Medicaid, private pay) and total available bed days for the periods covered by the income statements.


3. Requests for extended repayment of 12 months or more must be accompanied by one letter from a separate financial institution denying the provider's loan request for the amount of the overpayment.

Manual References

Financial Management Manual (Pub. 100-06) Chapter 4 Section 50

Exhibit 1
Financial Information Certification

MISREPRESENTATION OR FALSIFICATION OF ANY INFORMATION CONTAINED IN THIS FINANCIAL DOCUMENTATION SUBMITTED FOR REVIEW MAY BE PUNISHABLE BY FINE AND/OR IMPRISONMENT UNDER FEDERAL LAW.
CERTIFICATION BY OFFICER OF ADMINISTRATOR OF PROVIDER (S)

I HEREBY CERTIFY that I have examined the financial information prepared by __________ and that to the best of my knowledge and belief, it is a true, correct, and complete statement from the books and records of the provider.
  
Signed

   _______________________________
   Officer or Administrator of Provider(s)
 
   _______________________________
   Title

   _______________________________
   Date
________________________________________

Exhibit 2

   STATEMENT OF SOURCE AND APPLICATION OF FUNDS
   FOR THE PERIOD__________

   Funds Provided by:

                 Operations - Net income for the period     $XXXX

                 Add:       Charges not affecting working
                            capital (depreciation, amorti-
                            zation, etc.)                    XXXX
                                                            $XXXX

      Less:      Operating revenues not affect-
                 ing working capital                         XXXX

      Total fund provided by Operation                                $XXXX

      Long term loans                                                  XXXX

      Unrestricted cash donations                                      XXXX

      Other (identify)                                                 XXXX

      Total Funds Provided                                            $XXXX

   Funds Applied to:

      Retirement of long-term obligations
      (mortgages, notes, bonds, etc.)                       $XXXX

      Purchase of equipment                                  XXXX

      Purchase of land                                       XXXX

      Dividends to stockholders                              XXXX

      Other (identify)                                       XXXX

      Total Funds Applied                                             -XXXX

      Net Increase (Decrease) in Working Capital                    $XXXX

         Working Capital    (end of period) (date)                     $XXXX

      Less:    Working Capital    (beginning of period)
                (date)                                                 XXXX

      Net Increase (Decrease) in Working Capital                      $XXXX

Exhibit 3

                 CASH FLOW STATEMENT
                FOR THE PERIOD_______

   Cash provided by:
      Operations (Schedule A) (See Exhibit 8)                $XXXX

      Cash donations (unrestricted)                           XXXX

      Long term borrowing                                     XXXX

      Investment earnings (cash dividends, interest)          XXXX

      Sale of long term investments                           XXXX

      Sale of equipment                                       XXXX

      Issuance of bonds                                       XXXX

      Decrease in current assets - other than Accounts
      Receivable, Prepaid Expense, and Inventory              XXXX

      Increase in current liabilities - other than Accounts
      Payable and Prepaid Income                              XXXX

      Others                                                  XXXX

                                        Total cash provided  $XXXX

   Cash applied to:

      Purchase of equipment                         $XXXX

      Payment of long term debt                      XXXX

      Payment of bond redemption fund                XXXX
  
      Purchase of long term investments              XXXX

      Payment of dividends                           XXXX

      Purchase of land and/or building (purchase
      price less mortgage, capital stock and non
      cash assets given toward purchase)                      XXXX

      Increases in current assets - other than
      Accounts Receivable, Prepaid Expenses,
      and Inventory                                           XXXX

      Decreases in current liabilities - other
      than Accounts Payable and Prepaid Income                XXXX

      Others                                                  XXXX

                                   Total Cash Applied                   XXXX

   Increase (Decrease) in Cash                                         $XXXX

   ----------------------------------------------------------------------
   Cash at end of period (date)                                        $XXXX

   Less: Cash at beginning of period (date)                             XXXX

   Increase (Decrease) in Cash                                          XXXX
 

Exhibit 4

                             PROJECTED CASH FLOW
                       CASH FROM OPERATIONS (SCHEDULE A)

   Net Income (or Net Loss)                                   $XXXX

       Increases:Depreciation expense                  $XXXX

                     Loss from sale of equipment        XXXX

                     Decrease in net Accounts
                     Receivable                         XXXX

                     Decrease in Prepaid Expense        XXXX

                     Decrease in Inventory              XXXX

                     Increase in Accounts Payable       XXXX

                     Increase in Prepaid Income         XXXX

                     Others                             XXXX   XXXX

                     Gross Cash from Operations               $XXXX

       Decreases:    Gain from sale of equipment       $XXXX

                     Increase in net Accounts
                     Receivable                         XXXX

                     Increase in Prepaid Expense        XXXX

                     Increase in Inventory              XXXX

                     Decrease in Accounts Payable       XXXX

                     Decrease in Prepaid Income         XXXX

                     Others                             XXXX    XXXX
                     Net Cash from Operations                  $XXXX