Recoupments: It pays to know your rights
Q. I am a Medicare provider, and I just received a notice of overpayment for claims that have already been paid. What does this mean, and what can I do to prevent CMS from withholding my future payments?
A. When you get an overpayment letter, you need to know your rights and act quickly. Overpayments often happen when CMS conducts a post-payment audit and decides that some originally paid claims were not medically necessary. Absent any action by the provider, CMS could recoup payment, and this is frequently done by withholding 100% of a provider's current Medicare claims. Such action has the potential to shut down a small- or medium-sized provider.
Although it may seem like the cards are stacked against a provider who is alleged to have an overpayment, you do have some rights. In 2003, Congress passed legislation preventing the government from recouping funds until a Qualified Independent Contractor (QIC) has rendered a decision (at the second level of appeal). Thus, a provider may issue a rebuttal and appeal through the QIC level prior to any collection or withholding of funds. You now have the opportunity to eliminate or at least reduce an overpayment before paying a dime back to the government.
In September 2006, CMS issued a proposed rule implementing this limitation on recoupment. The final rule will fill in the details. For example, the regulations will specify how interest is calculated and paid, both by the provider to CMS if the overpayment is upheld through appeal, or by CMS to the provider if the overpayment is paid and subsequently reversed. Although providers have 180 days to file for a QIC appeal, the proposed rule would require a provider to file a QIC appeal within 30 days to maintain the limitation on recoupment. The proposed rule has yet to be finalized by CMS.
While an overpayment determination is never easy, you have the right to challenge the overpayment through the QIC appeal before any funds may be collected or withheld.
Valerie Eastwood is a healthcare attorney with Eastwood & Azia, PLLC.