CMS halts efforts to reclaim improperly mailed Medicare drug benefit premium refunds after advocacy groups file lawsuit

[Sep 19, 2006]--Some of the 230,000 Medicare beneficiaries who last month received erroneous reimbursements of their Medicare drug benefit premiums should not have to repay them, according to a lawsuit filed by the Center for Medicare Advocacy on behalf of two consumer advocacy groups, AP/Long Island Newsday reports. 

A computer error resulted in beneficiaries receiving an average reimbursement of $215. The reimbursements equaled the amount of beneficiaries' monthly premiums paid this year. CMS has said beneficiaries must return the money. According to CMA, which is representing the Gray Panthers and the Action Alliance of Senior Citizens in the suit, federal law allows for waiver of recovery of funds when a beneficiary is not at fault in an overpayment.  

In response to the suit, CMS on Monday agreed to stop mailing letters that instruct beneficiaries to return the money and to remove content on the recovery of overpayments from its Web site. CMS spokesperson Jeff Nelligan said the waiver of recovery law does not apply in this case.  

However, he said that he could not elaborate because "this is a matter in litigation, and consistent with our policy, we are responding to these allegations through our court filings." CMA attorney Gill Deford said, "The next steps are for CMS to return monies already repaid and inform all beneficiaries who received the incorrect refunds of their right, under federal law and the U.S. Constitution, to seek waiver of recovery" (Freking, AP/Long Island Newsday, 9/18).