BALTIMORE (Oct. 28, 2013)—CMS recently announced a 0.5 percent decrease in the interest rate on Medicare overpayments and underpayments to 10.125 percent. Except for April 17 to July 16 of this year, this is the lowest rate since 2001.
Interest on overpayments and underpayments accrues from the date of the initial request for refund and is assessed for each 30-day period, or portion thereof, that payment is delayed after the initial refund request. The interest rate for a final determination is the rate in effect on the date the determination is made.
Interest assessed for both late payments and installment payments is computed as simple interest using a 360-day calendar year. Interest rates are not prorated on a daily basis for overdue payments received during the month. Interest is assessed for a full 30-day period.
The interest rate charged on overpayments repaid through an approved extended repayment schedule is the rate that is in effect for the quarter in which the determination was made. The rate remains constant unless the provider defaults (i.e., misses two consecutive installment payments) on an extended repayment plan. If a provider defaults, interest on the balance of the debt may be changed to the prevailing rate in effect on the date of the default if that rate is higher than the rate specified in the repayment agreement. Visit cms.gov.
