Current through Register Vol. 35, No. 18, September 24, 2024
MAD charges interest on overpayments and pays interest on
underpayments as a result of year-end cost settlements, unless waived.
A.
Interest periods: Interest
accrues from the date of the final determination of costs or from a date
required by a subsequent administrative reversal. Interest is charged on the
overpayment balance or paid on the underpayment balance for each 30 calendar
day period that payment is delayed.
(1) For
purposes of this provision, a final determination is considered to occur when:
(a) MAD, the MAD selected claims processing
contractor, or the MAD audit contractor makes a written demand for payment or a
written determination of underpayment; or
(b) a cost report which was filed in a timely
manner indicates that an amount is due MAD and the amount due is not included
with the report.
(2) The
date of final determination for an additional overpayment or underpayment, as
determined by the MAD audit contractor, is considered to occur if any of the
previously mentioned events occur.
(3) The date of final determination for an
unfiled cost report occurs the day after the date the cost report was due. A
single extension of time not to exceed 30 calendar days is granted for good
cause. A written request for the time extension must be received and approved
by MAD before the cost report due date. When the cost report is filed, a second
final determination date is calculated based on the occurrence of either of the
aforementioned events.
B.
Interest rates: The interest
rate on overpayments and underpayments is based on the prevailing rate
specified in bulletins issued under article 8020.20 of the treasury fiscal
requirement manual. When a provider signs a repayment agreement with MAD for an
overpayment, the following provisions apply:
(1) the rate of interest specified in the
agreement is binding unless a default in the agreement occurs; or
(2) the rate of interest on the balance may
change to the prevailing rate if the provider or supplier defaults on an
installment and the prevailing rate in effect on the date the installment
becomes overdue is higher than the rate specified in the agreement.
C.
Accrual of
interest: Even though a filed cost report does not show an overpayment,
interest begins to accrue on the date of final determination, if MAD, the MAD
audit contractor, or the MAD selected claims processing contractor determines
that providers have been overpaid.
(1)
Interest continues to accrue during administrative or judicial appeals and
until final disposition of claims.
(2) If a cost report is filed which indicates
that an amount is due MAD, interest on the amount due accrues from the date the
cost report is filed unless:
(a) the full
payment on the amount due accompanies the cost report; or
(b) the provider and the MAD audit contractor
agree in advance to liquidate the overpayment through a reduction in interim
payments over the next 30 calendar day period.
(3) If the MAD audit contractor determines
that a further overpayment exists, interest accrues from the date of final
determination.
(4) If the cost
report is not filed, interest accrues from the day following the date the
report was due, plus a single extension of time not to exceed 30 calendar days
if granted for good cause, until the time the cost report is filed. Written
requests for time extensions must be received for approval by MAD before cost
reports due dates.
(5) Interest
accrues on an underpayment owed by MAD to a provider beginning 30 calendar days
from the date of MAD's notification of the underpayment by the MAD audit
contractor.
D.
Interest charge waivers: MAD may waive the interest charges when:
(1) the overpayment is liquidated within 30
calendar days from the date of the final determination; or
(2) MAD determines that the administrative
cost of collection exceeds the interest charges; interest is not waived for the
period of time during which cost reports are due but remain unfiled for more
than 30 calendar days.
E.
Interest charges with installment or
partial payments: If an overpayment is repaid in installments or
recouped by withholding from several payments due to a billing provider, the
amounts are applied in the following manner:
(1) each payment or recoupment is applied
first to accrued interest and then to the principle; and
(2) after each payment or recoupment,
interest accrues on the remaining unpaid balance; if an overpayment or an
underpayment determination is reversed following an administrative hearing,
appropriate adjustments are made on the overpayment or underpayment and the
amount of interest charged.
F.
Allowable interest cost:
Allowable interest cost is the necessary and proper interest on both current
and capital indebtedness. An interest cost is not allowable if it is one of the
following:
(1) an interest assessment on a
determined overpayment; or
(2)
interest on funds borrowed to repay an overpayment; following an administrative
review and favorable provider decision, interest paid on funds borrowed to
repay an overpayment or the interest assessed on an overpayment becomes an
allowable cost.
