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Policy & oversight

Federal Auditors Find Medicare Contractor Overpaid Providers in 138 Cases Where Billed Amounts Were Below Fee Schedule

An OIG audit of Wisconsin Physicians Service, a Medicare claims processor serving several Midwestern states, found that 138 of 801 sampled claim lines violated the rule that Medicare should never pay more than a provider actually charges.

By the Goodsurance editorial teamJuly 26, 2026

Medicare has a basic billing rule: the program should pay the lower of the Medicare fee schedule rate or the amount the provider actually billed. If a small clinic charges less than the fee schedule allows, Medicare should pay only what was billed, not the higher schedule amount. A new Office of Inspector General audit found that Wisconsin Physicians Service Insurance Corporation (WPS), the Medicare Administrative Contractor that processes Part B claims in several Midwestern states, did not always follow this rule.

Of 801 outpatient claim lines the OIG sampled covering services billed between January 1, 2022, and December 31, 2023, 138 were incorrect. Those errors resulted in overpayments totaling at least 140,182 dollars. An additional 31 claim lines totaling 76,640 dollars involved providers the OIG could not locate, leaving those payments unverified.

Federal auditors found 138 Medicare billing errors at a Midwest claims processor where the program paid more than what providers actually charged.

The OIG published the audit on July 21, 2026. It made three recommendations: that WPS confirm the 140,182 dollars in overpayments associated with the 123 claim lines for which corrected claims had already been processed has been fully recovered; that WPS determine whether the 76,640 dollars connected to the uncontacted providers was correctly paid and recover any identified overpayments; and that WPS work with the remaining 15 providers on incorrect lines to recover any remaining overpayments. WPS agreed with all three recommendations.

The audit is part of a broader OIG series examining whether Medicare Administrative Contractors consistently apply the lower-of-billed-charges rule across Part B claims processing.

In plain words

Medicare has a rule: it should never pay a doctor more than what the doctor charged. If a doctor charges 80 dollars and Medicare's price list says 100 dollars, Medicare pays only 80 dollars.

Auditors checked a Medicare claims processor called Wisconsin Physicians Service, or WPS. It handles Medicare billing for several states in the Midwest. Out of 801 bills reviewed, 138 had mistakes. Those mistakes led to overpayments of at least 140,182 dollars total. For another 31 bills, the auditors could not find the doctors involved, so 76,640 dollars in payments are still under review.

WPS was told to get the overpayments back and agreed. The auditors also said WPS should work with the remaining providers to fix the errors.

This kind of audit is routine. The federal government runs similar checks to make sure Medicare pays exactly the right amount, no more and no less.

Understand the basics first

Source: HHS OIG
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