Minnesota Health Care Programs

1.3.2.5 Overpayments

Overpayments occur when an enrollee receives more Minnesota Health Care Programs (MHCP) benefits than they were entitled to as a result of fraud, theft, abuse or error on the part of the enrollee.

Overpayments are not determined when recovery of the overpayment would be unreasonable or unfair. Examples of when it may be unreasonable or unfair to cite an overpayment include, but are not limited to, when:

The overpayment is the result of agency error
The enrollee reports a change timely and the agency cannot provide timely notice
Eligibility was determined using the enrollee’s estimate of expected income and the enrollee’s actual income was later found to be higher than the original estimate
There is suspected fraud or unreported information that has not yet been verified or confirmed

The overpayment amount:

Is the amount the health care program paid for benefits on behalf of the enrollee, either through fee-for-service claims or managed care payments, minus premiums paid for the overpayment period.
The amount MHCP paid for benefits is compared to the benefits the enrollee should have received. The overpayment amount may be reduced or eliminated if the enrollee would have been eligible for the same program under a different basis.

Overpayment Notification

People must receive written notice of overpayments using Minnesota Health Care Programs Notice of Overpayment (DHS-4939) or Notice of Medical Assistance Overpayment (DHS-4600). The notice:

explains the reason for the overpayment,
shows how the overpayment was computed,
requests repayment,
advises enrollees that further action may be taken if payment is not made, and
advises enrollees of their appeal rights.

Overpayment Collection

Available collection methods vary according to the program, whether the overpayment is determined to be the result of fraud, and whether the person is a current enrollee.

Voluntary Repayment

Voluntary repayment is available for all MHCPs and for both current and former enrollees. Each county, tribal or state servicing agency sets its own procedures for receiving voluntary repayments.

Revenue Recapture

Revenue recapture allows the county, tribal or state servicing agency to recover overpayments in MHCPs by intercepting income or property tax refunds and lottery winnings. Counties and DHS collections must submit requests for revenue recapture to the Commissioner of Revenue, who determines if revenue recapture is allowable under the Revenue Recapture Act, Minnesota Statutes 270A.

Revenue recapture may be used when the individual is no longer enrolled in the MHCP for which the debt is owed. Revenue recapture may be used for an overpayment established from an agency finding based on enrollee error, an administrative appeal decision based on enrollee error, or a court determination of benefits incorrectly paid.
Some health care overpayments may not be recoverable through revenue recapture. Recovery of overpayments for medical care is prohibited if the person’s income was below certain limits at the time the benefits were received.

Civil Recovery

Civil recovery includes obtaining a judgment and pursuing repayment through methods such as garnishment or property liens. Current enrollees are protected from civil recovery while they are enrolled and for six months after enrollment ends.

For MA, these methods are only available after a civil or criminal court judgment with a finding that benefits were incorrectly paid, with or without a finding that fraud occurred.
For state funded health care programs, the county agency or DHS collections may use the Judgment by Operation of Law (JOL) procedures outlined in Minnesota Statutes 256.0471.

Criminal Restitution

As part of the sentence for a conviction for fraud, the court may order the person to make restitution. The court may:

Lower the previously determined overpayment amount. order a monetary restitution for an amount less than the previously determined overpayment amount without reducing the total overpayment. This means that the person must pay a reduced amount as a condition of probation. The county or DHS collections may pursue repayment of the remainder of the overpayment through civil recovery or revenue recapture.
Order restitution in addition to the previously determined overpayment amount, such as fines, penalties, and accrued interest. Any added restitution is collected and retained entirely by the court or the agency that brought the fraud charge.

Legal Citations

Minnesota Rules, part 9505.0131

Minnesota Rules, part 9505.2215

Minnesota Statutes, section 256.01, subdivision 2(s)

Minnesota Statutes, section 256.98,

Minnesota Statutes, section 256.045, subdivision 10

Minnesota Statutes, section 256.0471

Minnesota Statutes, section 256B.016

Minnesota Statutes, section 270A

United States Code, title 42, section 1396b(d)