South Florida Hospital News
Thursday August 6, 2020

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November 2008 - Volume 5 - Issue 5


Medicare Overpayment Recoupment: Delayed, But Incomplete, Relief

The Centers for Medicare & Medicaid Services ("CMS") recently issued Transmittal 141, implementing changes to the recoupment process for Medicare provider and supplier overpayments. Recoupment is the process by which Medicare recovers outstanding debt by reducing present or future Medicare payments and applying the amount withheld to the indebtedness. The new policy implements a federal law that prohibits CMS from initiating the recoupment process when a provider or supplier requests a redetermination or reconsideration by a Qualified Independent Contractor ("QIC").

When Medicare determines that an overpayment has been made, providers and suppliers seeking to appeal that determination must request a redetermination. A provider generally has 120 days from the date of the demand letter to request a redetermination. Under the new policy, filing within the 120-day time period will not necessarily stop recoupment from starting; it will only prevent any further recoupment. To prevent CMS from initiating the recoupment process, a redetermination must be requested within 30 days from the date of the demand letter. If an appeal is not filed within 30 days, recoupment can begin on day 41 and any amount recouped is retained until final determination.

Although the new policy is generally favorable to providers and suppliers, especially when compared to the prior process in which an appeal had no effect on recoupment activity by CMS for certain Part A providers such as hospitals, providers and suppliers should be cognizant of the time limitations applicable to halting recoupment. 30 days may not be sufficient to gather complete evidence and prepare an appeal. Consequently, providers and suppliers may have to choose between halting recoupment, filing incomplete information with their appeal and attempting to submit additional information before the contractor completes the redetermination, or forfeiting their money for the duration of the appeals process in order to prepare a comprehensive and perhaps more persuasive appeal. Contractors have 60 days to issue a redetermination decision, but may complete it sooner, so the decision would be rendered before the additional information is received.

If a redetermination produces unfavorable results, providers and suppliers may then request reconsideration by a QIC, and again halt the initiation of recoupment. However, filing for reconsideration will only prevent recoupment if the request is received within 60 days following the date of the redetermination, although providers and suppliers have 180 days in which to request reconsideration. Providers and suppliers should use the time that the contractor uses to conduct the redetermination and the 60 days to request a reconsideration to gather all additional evidence for submission to the QIC. In this way, even if all such evidence was not considered at the redetermination stage, it will be considered at reconsideration before recoupment is commenced.

The reconsideration level of appeal is generally a provider or supplier’s last opportunity during the appeals process to submit written evidence in support of its position. Because of this important evidentiary rule, some providers and suppliers may find that the new policy provides little relief from recoupment during the appeals process, because 60 days may not be enough time to gather all the necessary information. Providers and suppliers should also be aware that the Medicare contractor can begin or resume recoupment once the QIC’s decision is made and a 30-day notice is sent to the provider or supplier, regardless of whether or not a request for administrative law judge ("ALJ") review, the third level of appeal, is filed.

Lester Perling, a partner with the Fort Lauderdale office of the statewide law firm, Broad and Cassel, is a board-certified health law attorney. He is the author of the Medicare Claims Appeals Process Handbook, which is available at and can be reached at (954)764-7060 or
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