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Overpayment Overview
An overpayment in MC remains a potential overpayment until it is determined by the DHCS Investigation Unit that the MC card was used in a particular month. An overpayment may not exist if the MC card was not used.
Only potential overpayments which equal or exceed $100 of usage shall be referred to the DHCS Investigation Unit.
Reminder: There are no administrative overpayments in MC.
For purposes of determining and narrowing the potential MC overpayment period, the EW must request usage information from the local DHCS Investigation Unit.
The EW is responsible for:
- Determining the potential MC overpayment period.
- Requesting MC usage information from the local DHCS Investigation Unit for this period.
- Determining the potential MC overpayment amount. Include only the months in the overpayment period that had usage.
- Referring the potential MC overpayment to DHCS Investigation Unit for recovery action.
Mrs. Jones applies for MC in June and is approved for Non-MAGI MC. At the annual RD in June, the client verbally reports that at the end of March she inherited an empty lot in Saratoga from her grandfather, valued at $750,000.
If Mrs. Jones had reported the change timely, the earliest the EW could have taken action to discontinue the case was 04/30. Therefore, a potential MC overpayment exists for May and June.
The EW shall request MC usage information from the local DHCS Investigation Unit. The DHCS Investigation Unit discovers that the clients had medical expenses paid by MC in May in the amount of $1,150 and no medical expenses paid by MC in June.
An overpayment in the amount of $1,150 exists only for the month of May.
Definition of Potential Overpayments
A potential MC overpayment may occur when a client or the person acting on his/her behalf is competent and has done either of the following:
- Provides incorrect verbal or written information, or
- Fails to provide information, and eligibility or SOC is incorrectly determined.
The EW must inform the client or person acting on his/her behalf, verbally and in writing of his/her reporting responsibility. Written notification is provided on the CCFRM 604, SAWS 1, SAWS 2A or MC 210, MC210 RV, MC 219, SAR 7, QR 7 or 176 TMC.
Reminder: This informing requirement must be done at application, reapplication/restoration and redetermination. Reporting responsibilities must be made accurately, completely, and timely, within ten calendar days from the date of the change.
Causes of Potential Overpayments
A potential overpayment may be caused by:
- Excess personal or real property (Non-MAGI MC only)
- Unreported Income or earnings
- CalWORKs ineligibility (Evaluate for Medi-Cal eligibility, CalWORKs ineligibility does not always indicate MC ineligibility).
- Unreported or untimely reported circumstances or changes, including failure to report other health coverage (OHC).
- Any combination of the reasons listed above.
Note: Effective 1/1/2024, counties are no longer required to report potential overpayments based on excess property since resources will no longer be used to compute Non-MAGI eligibility. Overpayments occurring before 1/1/2024 may continue.
No Overpayment Exists
No overpayment exists in the following situations:
- When no usage occurred in any of the potential overpayment months.
- When the increased amount of income and/or property has no impact on the client’s eligibility or SOC in that month.
- When the client has reported timely and there is no time for a 10-day notice of action (NOA) for adverse action.
- When the client reports a change and the EW fails to take action.
- If the EW fails to inform the client, or the person acting on his/her behalf, of the required action(s) to establish or maintain his/her eligibility, (i.e., the client did not spend excess property due to the EW’s failure to inform him/her of the property spend-down requirements).
- When the client or other person acting on his/her behalf has NOT been informed verbally and in writing of his/her responsibility to report facts affecting eligibility or SOC within ten calendar days from the date of the change.
Related Topics
Types of Potential Medi-Cal Overpayments