When ineligibility of a case or member occurs, the potential for Medicaid overpayment is created. To determine if an overpayment has occurred, the ineligible case/members will be evaluated using Medically Needy criteria. A potential overpayment has occurred when the Medically Needy evaluation results in:

For reporting of potential overpayments, refer to the following:

An overpayment occurs when medical payments have been made on behalf of individuals in any month the individuals are found not eligible.

When excessive payment has been made for the LTC vendor payment due to understated liability the potential for Medicaid overpayment is created. To determine if an overpayment has occurred, it will be necessary to determine who received the benefit of the excessive payment.

When it is determined that the LTCF received the benefit of the excessive payment, there is no overpayment. An adjustment of vendor payment (to the effective date of change) will be keyed to WNHU instead of submitting an overpayment via an EMS-51.

When an individual(s) is ineligible due to income, the amount of excess income will be determined by deducting the appropriate MNIL (Re. MS 7500) for the month(s) of ineligibility from countable income for the period of ineligibility. The amount of the overpayment claimed for repayment will be determined by comparing the excess income for the period to the Medicaid payments for services obtained by the ineligible individual(s) during the period of ineligibility.

The amount claimed for repayment will be limited to the lesser of the amount of excess income or the cost of the medical services.

For LTC cases, the amount claimed for repayment will be limited to the LTC vendor payments made during the period of ineligibility when the amount of the LTCF's private payment rate for the month(s) of ineligibility exceeds the excess income. If the private pay rate is less than the excess income, then the amount claimed for recovery will be the LTC vendor payment plus the Medicaid payment for all medical services received during the period.

The procedure for determining the amount of overpayment to be recovered is as follows:

1. The County Office will compute net countable income for the entire period of ineligibility. Net countable income for each month in the period will be determined by applying all exclusions and deductions which would be applicable if computing Medically Needy eligibility for the individual(s) (add together the net countable income received in each month in the period).
2. The County Office will compute the total MNIL for the entire period of ineligibility (add together the monthly MNILs for each month in the period).
3. The County Office will compute excess income by deducting the MNIL for the period (Re. 2, above) from the net countable income for the period (Re. 1 above).
4. The Overpayments Unit will compare the medical expenses incurred during the period of ineligibility to the excess income for the period.

1. For LTC cases, if the total private pay rate for the period of ineligibility (add together the private pay rate for the patient's level of care for each month in the period) is more than the amount of excess income, the amount claimed for repayment will be limited to the total vendor payments.

If the total private pay rate for the period of ineligibility is less than the amount of extra income, then the amount claimed for repayment will be the total vendor payment plus any medical expenses incurred.

2. For non-LTC cases, the amount claimed for repayment will be the lessor of the excess income or the amount of payment for medical services received during the period.

Overpayments and potential overpayments due to excess income will be reported by the County Office on Form EMS-51. The report will identify each individual by name and Medicaid ID number, the total excess income for ineligible month(s), and each month/year of ineligibility.

NOTE: Where AFDC grant ineligibility has occurred due to failure to include an increase in earned income, a Medicaid overpayment will not occur for the initial month of ineligibility and the three subsequent months if the requirements in MS 2060 were met.

Example 1 (Excess Income) -

Determine the amount of excess income for the period of ineligibility as follows:

1. Calculate net countable income.
   

$1,150.00/month - $20.00 (general exclusion) = $1,130.00 x 4 months = $4,520.00

2. Calculate appropriate MNIL.
   

$108.33 (1 person MNIL) x 4 months = $433.32

3. Calculate excess income.

Determine private payment rate for the facility as follows:

Since the private payment rate ($6,000) exceeds excess income ($4,086.68), the amount of overpayment claimed for repayment will be limited to the amount of the LTC vendor payment.

Example 2 (Excess Income) -

Determine the amount of excess income (for the period of ineligibility as follows:

1. Calculate net countable income
   

$1,150 - $20.00 (general exclusion) = $1,130 X 4 months = $4,520.00

2. Calculate appropriate MNIL.
   

$108.33 (1 person MNIL) X 4 months = $433.32

3. Calculate excess income

Determine private payment rate for the facility as follows:

The County Office will evaluate the case to determine the months of ineligibility due to excess resources by comparing the level of resources for each month to the appropriate Resource Level. For non-nursing home cases, use the appropriate MNRL. For nursing home cases use $2,000 or $3,000, whichever is applicable.

The Overpayments Unit will compare the highest level of excess resources for an ineligible month(s) to the total medical payments made on behalf of case members in the ineligible month(s) to determine the amount claimed for overpayment.

When the LTC vendor payment in the month of receipt is an amount greater than the excess resources, the amount of overpayment claimed for repayment will be limited to the amount of the excess resources.

When the LTC vendor payment is an amount less than the excess resources, the amount claimed will be the lesser of the excess resources or the total amount of medical payments (includes vendor payments).

Overpayments and potential overpayments due to excess resources will be reported by the County Office on the EMS-51. The report will identify each individual by name and Medicaid ID number, the highest dollar amount of excess resources for an ineligible month, and each month/year of ineligibility.

NOTE: Medicaid overpayment claims for AFDC cases ineligible due to excess resources will be reduced by the amount claimed for AFDC grant overpayments. Medicaid overpayments associated with ineligible AFDC cases will be reported separately on Form EMS-51.

Example (Excess Resources) -

Determine the highest level of excess resources for an ineligible month as follows:

1. Select appropriate resource level.
   

$2,000 (1 person)

2. Calculate excess resources for each ineligible month.
   

$2,100 - 2,000 = $100

$2,200 - 2,000 = $200

$2,300 - 2,000 = $300

$2,400 - 2,000 = $400

$2,500 - 2,000 = $500

3. Select highest level of excess.

All payments made on behalf of individuals who are ineligible to be included in a financial eligibility determination for Medicaid will be considered overpayments.

When an overpayment has occurred, enter the period of ineligibility/ understated liability, the reason(s) why the overpayment occurred, and any other pertinent information in the case narrative.

Each overpayment discovered will be entered in a register in each County Office. The register will show the following information:

All overpayments will be referred to the Central Office Overpayments Unit on Form EMS-51. If fraud is suspected, Form DHS-1700 will be sent with the EMS-51.

The Overpayments Unit will register all referrals. After the DHS-1700 is registered, it will be sent to the Fraud Unit for investigation.

If the investigation indicates a prosecutable case, the Fraud Unit will refer the case to the Overpayments Unit (after the case has been adjudicated).

The Overpayments Unit, State Office, will make the decision concerning the feasibility of repayment for all overpayments and ineligibles, whether they resulted from:

The Overpayments Unit will:

The Central Office Overpayments Unit will make the determination relative to the disposition of the claim when collection and/or fraud referrals are indicated.

When an agreement is reached with the client either by the Fraud Unit or Office of Chief Counsel, the Central Office Overpayments Unit will be apprised of whether:

Willful withholding of information is the deliberate misrepresentation or intentional concealment of information for the purpose of obtaining eligibility. Intentional concealment of information that affects eligibility must be clearly indicated. Overpayments resulting from "willful withholding" may be subject to prosecution for fraud.

"Willful" withholding of information includes:

Willful misstatements, oral or written, made by a recipient in response to oral or written questions from the agency concerning the recipient's income, resources, or other circumstances that may affect eligibility. Such misstatements may include understatements of amounts of income or resources and omission of information regarding income and resources.

Willful failure by the recipient to report changes in income, resources, or other circumstances that may affect eligibility if the agency has clearly notified the recipient of his obligation to report such changes.

When a client signs the application/review form, he certifies that he understands that failure to fulfill his obligation to provide correct, complete information and to keep the agency informed of changes may be considered willful withholding of information and permit the agency to recover any overpayments.

The County Office will promptly report, by memorandum to the Central Office Overpayments Unit, any pertinent information (coming to its attention) which would have any affect on an established overpayment claim that has not been satisfied, such as, but not limited to:

If clients or other interested persons have questions concerning recovery letters received directly from the Central Office, the County Office will refer them to the Central Office Overpayments Unit.

If clients wish to make arrangements for repayment, the County Office will explain that the final decision regarding recovery rests with the Central Office Overpayments Unit and give the mailing address:

Act 372 of 1983 as amended (Ark. Stats. Ann. § 84-4901 thru 84-4918) and Act 987 of 1985 authorizes the collection of debts owed the Department of Human Services (DHS) through the interception of State Income Tax Refunds.

The Division of Finance/Accounts Receivable will submit a list of households with a receivable balance to the Office of Information Systems who will combine the list by Social Security number with a list, prepared by the Child Support Enforcement Unit, of delinquent child support and other amounts owed the Department of Human Services.

Act 987 requires notification to households who owe a debt to the State before this information is furnished to the Revenue Division of the Department of Finance and Administration. A notice of DHS intention to intercept refunds will be mailed by Central Office to the taxpayer prior to December 1 of each year.

In order for an account to be submitted for State (Income) Tax Refund Intercept, the following conditions must be met:

When the Appeals and Hearings Section receives a request for a hearing from the Overpayment Unit along with documentation relative to the overpayment, this information is forwarded to the County DHS Office in the county in which the taxpayer resides so that a County Statement can be prepared. The statement will contain the basis for establishing whether the claimed sum asserted as due and owing is correct. The purpose of the hearing is to determine the validity of the overpayment.

Upon receipt of the STRI Hearing Statement, the Appeals and Hearings Section will forward copies of the Statement and the information received from the Overpayment Recovery Unit to the taxpayer for review.

The DHS-3205 will be attached to the aforementioned information. The taxpayer and/or his representative has the right to subpoena witnesses to testify at the STRI hearing.

The Appeals and Hearings Section will provide written notice to all parties involved at least 10 days prior to the date of the hearing to allow for adequate preparation of the case. The notice will contain:

The Appeals and Hearings Section will designate all Hearing Officers. The Hearing Officer must not have had any personal interest or involvement in the case and must not have been involved in the contested action either as a caseworker or in a supervisory capacity.

A Hearing Officer will conduct the hearing. The taxpayer may be accompanied by friends or other persons and may be represented by a friend, attorney or designated representative. The Department of Human Services will be represented by a County Office representative from the County DHS Office in which the taxpayer resides.

The hearing will be conducted in an informal but orderly manner. The STRI Hearing Statement will be read by the County Representative. This includes presenting evidence and presenting the County's witnesses. The County Representative may be cross-examined by the taxpayer and/or his representative.

The taxpayer or his representative will then present his case which includes presenting witnesses, advancing arguments, offering additional evidence, and questioning or rebutting any testimony or evidence. The taxpayer or his representative will be allowed to question the County Representative. The taxpayer is subject to cross-examination by the County Office. If the taxpayer is unable to present his evidence, the Hearing Officer will assist him. Questioning of all parties will be confined to the issue involved.

When all relevant information has been obtained, the Hearing Officer will summarize the issues, the evidence, the agency policy, and will explain that he will recommend a decision to the Administrator, Appeals and Hearings Section, who will make the final decision.

The hearing decision will contain the following information.

Hearing decisions adverse to the household are sent via certified mail, return receipt requested. This procedure ensures that timely filing for judicial review may be ascertained.

Households not satisfied with an Administrative Hearing decision have the right to judicial review under the Administrative Procedures Act.

The household must file a petition in the Circuit Court of the county in which the household lives or does business or in the Circuit Court of Pulaski County within 30 days from the date the household received the Administrative Hearing decision. Copies of the petition are served on DEMS and other parties of record by personal delivery or mail.

Within 30 days from the date of the service of the petition or DEMS (or additional time granted by the Court, not to exceed 90 days total), the Office of Chief Counsel must transmit to the Court the original or a certified copy of the entire record of the hearing under review.