The Centers for Medicare and Medicaid Services (CMS) has stopped efforts to reclaim improperly mailed Medicare refunds after consumer groups filed a lawsuit. Because of a computer error, approximately 230,000 people were mistakenly mailed refunds for their Medicare prescription drug benefit premiums. CMS had insisted that the money, which averaged $215 a beneficiary, be paid back.

The lawsuit, filed by the Center for Medicare Advocacy, on behalf of the Gray Panthers and the Action Alliance of Senior Citizens, claims that federal law allows for a waiver of an overpayment if the overpayment is not the beneficiary's fault. In response to the lawsuit, CMS stopped sending letters to beneficiaries instructing them to return the money, and removed all content about the recovery effort from its Web site.

The Center for Medicare Advocacy also wants all money already collected by CMS returned to beneficiaries and for the CMS to inform beneficiaries of their right to a waiver. According to an Associated Press article, a CMS spokesman denies that a waiver applies in this case, but did not give details.

For the Associated Press article, click here.