Medicare Claims Advisory: Interest Rate Increases for Overpayment, Underpayment

The rate of interest that Medicare will pay you for claims that were underpaid, or collect from you from claims that were overpaid, has increased to 10.25 percent, up from the 10.125 percent that has been in effect since Oct. 18, 2013. The change is effective as of Jan. 21, 2014. The Centers for Medicare and Medicaid Services (CMS) announced the latest update in Transmittal 230, Change Request 8624. Medicare Regulation 42 CFR 405.378 provides for the assessment of interest at the higher of the current value of funds rate (1 percent for calendar year 2014) or the private consumer rate as fixed by the Department of the Treasury. The highest interest rate in the past decade was in early 2001, when it was 14.125 percent, but for most of the years since, the rate has hovered between 10.5 percent and 12 percent.