Beginning in 2007, the CMS will begin recouping $750 million in overpayments to Medicare HMOs resulting from the use of outdated data to determine "hold-harmless" payments, the agency confirmed. Such payments are made to HMOs to protect them from reductions they would otherwise see for providing coverage to healthier-than-average beneficiaries. The error was discovered by staff members of Rep. Pete Stark (D-Calif.) and Rep. John Spratt (D-S.C.). In a news release, the congressmen's offices said they are considering legislative action to ensure the CMS will collect the $750 million, currently scheduled to occur over four years.
In other Washington news, the Senate Budget Committee announced that legislation that could cut up to $10 billion from Medicaid will have to be reported to the committee before Oct. 26, extending the original Sept. 16 deadline. The Senate Finance Committee is drafting such legislation and the House Committee on Energy and Commerce is crafting similar legislation. House Speaker Dennis Hastert (R-Ill.) said last week he is pushing back the Sept. 16 deadline two weeks. -- by Tony Fong