230,000 people receive Medicare checks erroneously

By: Clair Leka, CBS News
By: Clair Leka, CBS News

August 23, 2006

The check is in the mail...but don't count on cashing it.

Medicare sent checks to more than 200,000 people.

The money was sent to reimburse people for their premiums. The catch is, it's all a mistake, and if you received one of those checks, you now have to send it back.

Don't cash that check. That's the message the government is sending some 230,000 Medicare recipients after they were mistakenly reimbursed for premiums they paid for prescription drug coverage.

"The government is telling them to set this money aside, not to spend it," says Paul Precht of the Medicare Rights Center. "Because they are going to be asked to refund it."

Medicare officials say they caught the glitch after checks totaling nearly $50 million were sent out. Medicare officials have sent out a second batch of letters telling recipients the money must be returned.

"This mistake was the result of the government trying to solve a larger problem," Precht says.

Experts say that in trying to fix a glitch that caused many Part D recipients to be overcharged for premiums, instead Medicare mistakenly sent out the reimbursement checks, which averaged $215 each.

"For people on a fixed income, this can be a lot of money," Precht says.

The Medicare administrator tried to reassure seniors, saying, "It's very important for people to know their coverage is continuing. There's no disruption at all."

But critics say they don't have much faith the government will be able to correct all of the billing issues. This is just one of a string of difficulties the program has faced since it started in January.

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