Federal District Court Authorizes Medicare Recoupment of Overpayments During Administrative Appeal

On April 1, 2009, the United States District Court for the District of South Carolina (Anderson/Greenwood Division) dismissed a declaratory judgment action filed by thirty-seven South Carolina hospitals seeking a determination that Section 935 of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the “MMA”) precludes recoupment of Medicare reimbursement during the redetermination and reconsideration stages of an administrative appeal of any alleged overpayment. (For a copy of the order, please click here). Section 935 of the MMA, set forth at 42 U.S.C. § 1395dd(f )(2) states, in relevant part: “In the case of a provider of services or supplier that is determined to have received an overpayment…that seeks a reconsideration by a qualified independent contractor on such determination…, the Secretary may not take any action (or authorize any other person, including any Medicare contractor,…) to recoup the overpayment until the date the decision on the reconsideration has been rendered…”

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