CMS Can Withhold Medicare Payments To Pay Off Pre-Bankruptcy Overpayments

April 12th, 2013

A medical provider’s Medicare claims filed with the Centers for Medicare & Medicaid Services after a bankruptcy filing can be used to recoup overpayments from claims paid to the provider prior to bankruptcy, according to a March 22 federal court ruling in South Carolina (Fischbach v. Centers for Medicare and Medicaid Services (In re Fischbach), D.S.C., No. 1:12-cv-513, 3/22/13).

Judge J. Michelle Childs’s ruling for the U.S. District Court for the District of South Carolina held that a Medicare provider’s continuing stream of claims and payments from CMS represent a single transaction under Chapter 7 of the U.S. Bankruptcy Code and are not subject to the automatic stay provision of a bankruptcy filing.

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