# Found a Billing Mistake? The Medicaid 60-Day Overpayment Rule for NEMT

Canonical URL: https://nemtguide.com/guides/medicaid-overpayment-60-day-rule/ · Updated 2026-09-29

The Medicaid 60-day overpayment rule says that when you find you were paid money you are not owed, such as for a ride billed in error, you must report it, return it, and explain the reason in writing within 60 days after you identify it. Money kept past that deadline becomes an obligation under the federal False Claims Act. Use the payer's refund or self-disclosure process.

- You have 60 days after you identify an overpayment to report it, return it, and explain in writing why it happened.
- Money kept past the deadline becomes an obligation under the False Claims Act, where penalties run $14,308 to $28,619 per violation (for penalties assessed after July 3, 2025) plus triple damages.
- Return the money to whoever paid the claim, the state, a health plan, or a broker, using its own process.
- Routine errors go through a void or adjustment. Patterns, system errors, and excluded employees go to a state self-disclosure program.
- Possible fraud, such as falsified trip logs or paid referrals, calls for a health care attorney before you disclose.

A claim you were already paid for can turn out to be wrong. A biller spots a duplicate, a driver admits a no-show went out as a ride, or a remittance shows two payers paid for one trip. The money is not yours, and what you do in the next 60 days decides whether it stays a simple refund.

## What the 60-day overpayment rule says

The rule is section 1128J(d) of the Social Security Act ([42 U.S.C. 1320a-7k(d)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1320a-7k&num=0&edition=prelim)), added by the Affordable Care Act in 2010. If you received an overpayment, you must:

1. **Report and return it** to the state, its contractor, or whoever paid you, at the correct address.
2. **Explain it in writing,** giving the reason for the overpayment.
3. **Do both within 60 days** after the date you identified it, or by the date a related cost report is due, if that is later. If you do not file cost reports, the deadline is 60 days.

An overpayment is any money you received or kept under Medicare or Medicaid that you are not entitled to. The rule covers providers, suppliers, and Medicaid managed care plans, but not riders.

Money kept past the deadline becomes an obligation under the False Claims Act. The Act makes it a violation to knowingly conceal, or knowingly and improperly avoid, an obligation to pay the government ([31 U.S.C. 3729(a)(1)(G)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section3729&num=0&edition=prelim)). See the False Claims Act.

| What you risk | Amount | Rule |
|---|---|---|
| False Claims Act penalty | $14,308 to $28,619 per violation for penalties assessed after July 3, 2025, plus three times the government's damages | 31 U.S.C. 3729(a), 28 CFR 85.5 |
| Federal civil money penalty for not reporting and returning | Up to $25,595 per item or service after the inflation adjustment published January 28, 2026, plus up to three times the amount claimed, and possible exclusion | 42 U.S.C. 1320a-7a(a)(10), 45 CFR 102.3 |
| New York penalty for not reporting, returning, and explaining | Up to $10,000 per item or service, or $30,000 if already penalized in the previous five years | New York Social Services Law 145-b(4), as OMIG describes it |
| A whistleblower lawsuit | A whistleblower, often a current or former employee, who brings a False Claims Act case gets 15 to 25 percent of the recovery when the government joins it | 31 U.S.C. 3730(d) |

Reporting also starts the state's own clock. Once you acknowledge a specific overpaid amount to the state Medicaid agency in writing, the overpayment counts as discovered that day. The state then has one year to recover it before it must refund the federal share to CMS ([42 CFR 433.316](https://www.ecfr.gov/current/title-42/section-433.316)). Expect prompt collection after you report.

## What counts as an overpayment on a NEMT trip

| What happened | Why the money goes back |
|---|---|
| A no-show or cancelled ride was billed as a completed trip | No ride took place |
| The same leg was billed twice, or paid by two payers | Only one payment is owed |
| A wheelchair or stretcher rate was billed for an ambulatory ride | The rider got a lower level of service than you billed |
| Miles were rounded up or padded | You were paid for miles you did not drive with the rider |
| The rider was not eligible on the date of service | The payer owed nothing for that ride |
| The trip log, signature, or approval is missing | Nothing supports the payment |
| An excluded person drove the ride | Medicaid pays nothing for services furnished by an excluded person ([42 CFR 1001.1901(b)](https://www.ecfr.gov/current/title-42/section-1001.1901)) |

Screen every driver against the [OIG exclusion list](https://nemtguide.com/glossary/oig-exclusion-list/) before hire and monthly, because one excluded driver can taint every ride that driver gave.

Some overpayments start on the payer's side, such as a claim paid twice by a system error. The rule still applies. Once you know, the money goes back.

## When the 60 days start

The clock starts when you identify the overpayment, and the statute does not define "identified." Two official readings show where the line sits.

- **Medicare.** Since January 1, 2025, CMS says you identify an overpayment when you knowingly receive or keep it, using the False Claims Act meaning of knowingly: actual knowledge, deliberate ignorance, or reckless disregard ([42 CFR 401.305(a)(2)](https://www.ecfr.gov/current/title-42/section-401.305)). Looking away does not stop the clock. A timely, good-faith investigation into related overpayments pauses the deadline until the investigation ends or until 180 days after the first overpayment was identified, whichever comes first. Whatever remained of the 60 days then runs. The duty reaches overpayments identified within 6 years of when you received them.
- **New York Medicaid.** OMIG says identifying an overpayment includes finding why and how it happened, who caused it, who found it, and the fix, and working out the amount as best you can. Providers who fail to use reasonable diligence to find overpayments face penalties. The lookback is 6 years by date of service.

Those Medicare details cover only Medicare Parts A and B ([42 CFR 401.301](https://www.ecfr.gov/current/title-42/section-401.301)). For Medicaid, no federal regulation defines when an overpayment is identified, so your state's process fills in the details. When in doubt, count day one from the date someone in your company first had credible information, and write that date down.

### An example timeline

This is a made-up case to show how the days line up.

| Day | What happens |
|---|---|
| 0 | Your biller sees that a rider's return trip on March 3 was billed twice |
| 1 | You hold new claims for that rider and write down who found the problem and when |
| 2 to 20 | You check every claim for that rider and that driver across the lookback period and find two more duplicates |
| 21 | You void the three duplicate claims through the payer's process |
| 22 | You send the written explanation: what happened, the claims, dates of service, amounts, and the fix |
| Before 60 | You confirm the voids on your remittance advice and file everything |

## Who gets the money back

Return the money to whoever paid the claim, using that payer's process.

| Who paid you | Where the overpayment goes | Rule |
|---|---|---|
| The state Medicaid program (fee-for-service) | The state's claim adjustment or refund process | 42 U.S.C. 1320a-7k(d) and your state manual |
| A Medicaid health plan, directly or through its broker | The plan's process, within 60 calendar days, with the reason in writing | 42 CFR 438.608(d)(2) |
| A broker that contracts with the state on a prepaid basis for NEMT only | The broker's process under your agreement | 42 CFR 438.9 and your agreement |

Health plans must give network providers a way to report and return overpayments within 60 calendar days, with the reason in writing ([42 CFR 438.608(d)(2)](https://www.ecfr.gov/current/title-42/section-438.608)). A network provider includes one contracted through the plan's subcontractor, such as its broker ([42 CFR 438.2](https://www.ecfr.gov/current/title-42/section-438.2)). A broker that contracts with the state on a prepaid basis to run only NEMT is exempt from that section ([42 CFR 438.9](https://www.ecfr.gov/current/title-42/section-438.9)), so your agreement sets the steps.

Broker agreements can let the broker take the money back itself. MTM Health's standard agreement, in the January 1, 2023 version Pennsylvania posts, lets it recover overpayments by offsetting future payments (section 6.D). WellTrans's Indiana agreement, revised October 16, 2025, does the same in its payment terms (Exhibit B). Tell the broker in writing anyway, so the reason is on record. See [how to bill NEMT brokers](https://nemtguide.com/guides/how-to-bill-nemt-brokers/).

Some states want to hear about managed care refunds too. Under its self-review protocol, Pennsylvania asks providers to return managed care overpayments to the plan and also make the self-disclosure directly to its Department of Human Services. New York tells network providers to use the plan's self-disclosure process. If the plan does not respond, you document your attempts and file a Full Self-Disclosure with OMIG.

## How states want overpayments returned

| State | Routine overpayment | What else to know |
|---|---|---|
| Arizona | Void the claim to return the full payment, or send a correction claim for part of it while the date of service is within the 12-month clean claim period. Do not send a check, because it can cause a duplicate recovery (AHCCCS manual, revised November 3, 2025). | A provider must notify AHCCCS of any overpayment of a claim. The manual sets no cutoff for finding and refunding one, so old overpayments still go back. |
| Indiana | Void or adjust the claim. After the 180-day filing limit, add the claim note "Adjustment due to overpayment. Timely filing does not apply." | Billing system errors, possible violations of law or policy, and totals over $1,000 go on the Voluntary Self-Disclosure of Provider Overpayments Form, sent without payment (IHCP, January 29, 2026). |
| New York | Void or adjust, then report it on the Self-Disclosure Abbreviated Statement, one at a time or in a monthly batch. A void alone does not meet the duty to report and explain. | Excluded employees, documentation errors, system errors, possible fraud, and systemic problems go through the Full Self-Disclosure process, which pauses the 60 days. |
| Pennsylvania | Use the claim adjustment process, or mail a refund check payable to the Commonwealth of Pennsylvania with a cover letter to the Bureau of Program Integrity, P.O. Box 2675, Harrisburg, PA 17105-2675. | Estimating from a sample needs the Bureau's approval of a work plan first. If you disclose voluntarily and in good faith and the cause was not fraud, the state accepts repayment without penalty. |
| Texas | Send a refund check with the Texas Medicaid Refund Information Form, or ask for a recoupment through the paper appeal process (TMPPM, September 2026). | Providers must report inappropriate payments to the Inspector General when identified, by letter or its checklist form, at OIGSelf-Report@hhs.texas.gov or by mail. |

For the mechanics of voids and replacement claims, see [corrected and voided NEMT claims](https://nemtguide.com/guides/corrected-nemt-claims/).

## Refund, state self-disclosure, or OIG

Pick the path by what you found, not by the dollar amount alone.

| What you found | Where it goes |
|---|---|
| A one-off error, such as a typo, a wrong code, or a duplicate | The payer's void, adjustment, or refund process, with a written reason |
| A pattern, a system error, a large total, or an excluded employee | Your state's self-disclosure program, or the plan's |
| Possible fraud: falsified trip logs, rides that never happened billed on purpose, paying for referrals | A health care attorney first, then the OIG Self-Disclosure Protocol or your state's inspector general |

The HHS OIG Self-Disclosure Protocol (amended November 8, 2021) is for conduct that may break federal law and carry civil money penalties. It is not for plain overpayments or errors, which go to the payer's refund process. What it involves:

- **Money.** OIG generally settles for at least 1.5 times single damages. The minimum settlement is $20,000, or $100,000 for kickback matters.
- **Integrity agreements.** OIG presumes it will not require one for good-faith disclosures.
- **Timing.** You submit through OIG's online form. If your internal investigation is not done, you certify it will be finished within 90 days of your first submission.
- **Excluded employees.** Before you disclose one, screen every current employee and contractor, and disclose them all in one submission.
- **The 60 days.** For Medicare, the deadline to return is suspended once OIG acknowledges your submission ([42 CFR 401.305(b)(2)](https://www.ecfr.gov/current/title-42/section-401.305)). Texas's Inspector General lists a similar pause among the benefits it may offer providers who self-disclose Medicaid overpayments in good faith.

The False Claims Act also lets a court cut damages to double when a company gives federal investigators everything it knows within 30 days of learning it and cooperates fully, as long as no action had started and it did not know of an investigation ([31 U.S.C. 3729(a)(2)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section3729&num=0&edition=prelim)). That is a decision to make with a lawyer. See [NEMT fraud](https://nemtguide.com/guides/nemt-fraud/) for how investigators tell mistakes from schemes.

## How to handle an overpayment, step by step

1. **Stop the problem.** Hold claims for the affected trips, riders, or drivers until you know the scope. If the claims are part of an audit, ask the auditor before you void anything. New York requires permission from the investigating agency first.
2. **Write down day one.** Note the date, who found the problem, and how.
3. **Find the scope.** Check the same driver, rider, code, and period for related errors. A 6-year lookback is common, as in Medicare and New York.
4. **Work out the amount.** Review every affected claim where you can. Use a sample only with the payer's approval. Pennsylvania wants a work plan approved first, and New York decides sampling requests at its discretion, using the lower limit of the 90 percent confidence interval.
5. **Return it the payer's way.** Void or adjust through the claims system when the payer prefers that, as Arizona and Indiana do. Send a check only where the payer asks for one.
6. **Explain it in writing.** Say what happened, which claims and dates of service, the amount, how you found it, and what you changed. Keep proof you sent it.
7. **Fix the cause.** Retrain, change the process, or remove the person, and write down what you did. See [NEMT compliance programs](https://nemtguide.com/guides/nemt-compliance-program/).
8. **Keep the file.** Keep the explanation, the void confirmations, and the remittance that shows the money went back for your full retention period. See [NEMT record retention](https://nemtguide.com/guides/nemt-record-retention/).

## Mistakes that make an overpayment worse

- **Waiting for the full number.** Outside the narrow Medicare pause, the 60 days run while you investigate. Start early.
- **Voiding without explaining.** In New York, a void or adjustment alone does not meet the duty to report and explain.
- **Sending a check the payer did not ask for.** Arizona warns that a check can cause a duplicate recovery.
- **Paying the wrong payer.** A broker or health plan trip goes back to the broker or plan, not the state.
- **Brushing off an employee who raises it.** The False Claims Act protects employees who try to stop a violation from retaliation, with remedies that include reinstatement and double back pay (31 U.S.C. 3730(h)). An employee can also file suit.

When the payer finds the overpayment before you do, it becomes a recoupment. See [Medicaid recoupment](https://nemtguide.com/guides/medicaid-recoupment/) for how to respond, and [Medicaid audits for NEMT](https://nemtguide.com/guides/medicaid-audit-for-nemt/) for what auditors check.

## Frequently asked questions

### Does the 60-day overpayment rule apply to Medicaid or only Medicare?

Both. Section 1128J(d) of the Social Security Act covers money received under Medicare and under Medicaid. CMS has written detailed rules only for Medicare, such as the Parts A and B rules at 42 CFR 401.301 to 401.305, so Medicaid providers follow the statute and their state's process. Texas, New York, and Indiana all tell Medicaid providers to return overpayments within 60 days.

### When does the 60-day clock start?

On the day the overpayment is identified, a word the statute does not define. For Medicare, CMS says since January 1, 2025 that you identify an overpayment when you knowingly receive or keep it, which includes deliberate ignorance and reckless disregard. New York says identifying includes finding why and how it happened and working out the amount, and it penalizes providers who fail to use reasonable diligence. Count from the day you first had credible information.

### What if I cannot work out the full amount within 60 days?

For Medicare, a timely, good-faith investigation into related overpayments pauses the deadline until it ends or until 180 days after the first overpayment was identified, whichever is first, and then the rest of the 60 days runs (42 CFR 401.305(b)(3)). Medicaid has no federal version of that pause. In New York, filing a Full Self-Disclosure Statement pauses the 60 days while OMIG reviews it. Elsewhere, ask the payer in writing how to proceed before day 60.

### Do I owe interest when I pay back an overpayment?

Sometimes. Ohio charges simple interest at the average bank prime rate from the date it paid you, but may waive it when you repay voluntarily before the state notifies you (Ohio Adm. Code 5160-1-25). Texas's Inspector General may forgive or reduce interest for up to two years for providers who self-disclose in good faith. Ask your state or plan how it handles interest.

### Is a billing mistake Medicaid fraud?

An honest mistake you catch and return is not fraud. The risk starts when you know and keep the money. After 60 days it becomes an obligation under the False Claims Act, whose standard of knowing covers deliberate ignorance and reckless disregard and needs no proof of intent to defraud (31 U.S.C. 3729(b)). Falsified records or paid referrals are different, and they call for a health care attorney.

### What if a broker paid me, not the state?

Return it through the broker or the health plan behind it. Health plans must give network providers a way to report and return overpayments within 60 calendar days with a written reason, and that includes providers in the plan's broker network. Brokers that contract with the state on a prepaid basis to run only NEMT are exempt from that federal section, so your agreement sets the steps.

## Official resources

- [HHS OIG: Health Care Fraud Self-Disclosure Protocol](https://oig.hhs.gov/compliance/self-disclosure-info/self-disclosure-protocol/)
- [HHS OIG: List of Excluded Individuals and Entities](https://oig.hhs.gov/exclusions/)
- [New York OMIG: Self-disclosure frequently asked questions](https://omig.ny.gov/self-disclosure-frequently-asked-questions)
- [Texas HHS OIG: Information for providers (self-disclosure of errors)](https://oig.hhs.texas.gov/resources/information-providers)
- [Pennsylvania DHS: Medicaid Provider Self-Review Protocol](https://www.pa.gov/agencies/dhs/report-fraud/medicaid-provider-self-audit-protocol)
- [eCFR: 42 CFR 401.305, Medicare overpayment reporting and returning](https://www.ecfr.gov/current/title-42/section-401.305)