CMS Lowers Interest Rates

Agency trims 0.5% off Medicare overpayments and underpayments to put rate at 10.125%.

CMS has lowered the interest rate on Medicare overpayments and underpayments by 0.5 percent to 10.125 percent. The only time the rate has been that low since 2001 was between April 17 and July 16 this year.

The new rates are effective as of Oct. 18, and were original announced on Oct. 11, during the shut-down of the Federal government. So, CMS announced the new rates again on Oct. 22.

The announcement, as well as a chart of past interest rates can be found on a CMS transmittal available as a PDF at

The rate on overpayments and underpayments begin accruing from the date of the refund is initially requested, and is assessed each 30-day period, or portion thereof, that payment is delayed after the first refund request, according to a statement from the American Association. The interest rate for a final determination is the rate in effect on the date the determination is made, the statement further clarified.

Additional detail from AAHomecare:

“Interest assessed for both late payments and installment payments is computed as simple interest using a 360-day calendar year. Interest rates are not pro-rated on a daily basis for overdue payments received during the month. Interest is assessed for a full 30-day period.

“The interest rate charged on overpayments repaid through an approved extended repayment schedule is the rate that is in effect for the quarter in which the determination was made. The rate remains constant unless the provider defaults (i.e., misses two consecutive installment payments) on an extended repayment plan. If a provider defaults, interest on the balance of the debt may be changed to the prevailing rate in effect on the date of the default if that rate is higher than the rate specified in the repayment agreement.”

About the Author

David Kopf is the Publisher HME Business, DME Pharmacy and Mobility Management magazines. He was Executive Editor of HME Business and DME Pharmacy from 2008 to 2023. Follow him on LinkedIn at and on Twitter at @postacutenews.

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