Settlement Offer

Published 08/05/2020

In keeping with the November 8, 2019, status update, and subsequent updates and Articles, Palmetto GBA and the Centers for Medicaid & Medicare Services (CMS) have been moving forward with CMS’s plan for resolving the Medicare Advantage (MA) Plan Overpayments over the past several weeks.

Affected providers received the First Letter (subject line: Notice of Resolution of Certain Potential Overpayments), mailed November 22, 2019, and/or the Second Letter (subject line: Initial Request), also known as the Timely Filing Waiver (TFW) Demand Letters, mailed on December 6, 2019.

The Third and final letter — which will be a Settlement Offer on CMS letterhead, will be mailed on January 3, 2020. This letter will contain a CMS offer to make settlement for the unresolved claims. Key points are:

  • Provider will receive the Third Letter for unresolved MA overpayment claims where the MAO opted against making a voluntary repayment or arranging for rebilling of claims
  • The Third Letter will contain a CMS offer of settlement for the unresolved MA overpayment claims and will contain a listing of the specific claims included in CMS’s settlement offer
  • Providers receiving a CMS settlement offer will have sixty (60) days to respond
  • Providers that accept the CMS settlement offer will retain a sizable portion (60%) of the original payments; but will need to repay the balance specified in the settlement offer
  • Providers that do not accept the CMS settlement offer will receive a Medicare demand letter for the full balance, which they will need to repay; however, these providers will be permitted to pursue appeals on any of the claims if they wish to

Third Letter Does Not Include MA Overpayment Claims Addressed by First and Second Letters
Those providers who received the First Letter (November 2019) were informed that certain erroneous FFS payments had been resolved by voluntary payments made by certain MAOs. CMS and Palmetto have taken care to ensure that these fully resolved claims are excluded from the settlement offer computation. The erroneous Medicare FFS payments included in CMS’s settlement offer were not resolved by any voluntary MAO payment (or prior resolution activity).

Those providers who received the Second Letter (December 2019) were requested to repay certain erroneous FFS payments made, where the applicable MAOs had advised CMS of their willingness to waive their otherwise applicable claims filing deadlines and to consider the claims for payment. CMS and Palmetto have taken care to ensure that claims being resolved through this Timely Filing Waiver process are excluded from the settlement offer computation.

CMS Settlement Offer Letter Addresses Final Group of MA Overpayments
CMS’s settlement offer letter will encompass all the remaining unresolved FFS overpayment claims described in the reopening notices of June 15, 2018, and/or January 28, 2019, that have not already been addressed in a prior communication. Once the January 2020 letters are issued, providers are assured that CMS and Palmetto GBA will not raise any “newly-discovered” claims with respect to the MA overpayments situation described in the June 2018 and January 2019 notices.  Except as described in the settlement offer (and as described in the demand letter the provider will receive in the event the provider opts to reject CMS’s settlement offer), the provider will not receive future notices relating to new/additional claims in connection with the “MA overpayments” matter described in the reopening notices of June 2018, and/or January 2019.

Additional information is available in articles entitled “Medicare Advantage (MA) Plan Overpayments: Background and “Medicare Advantage (MA) Plan Overpayments — Frequently Asked Questions (FAQs).” Questions may be addressed to

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