OVERPAYMENTS, Refund and OFFSET, Forward balance



An overpayment is defined as Medicare monies a provider or beneficiary received in excess of what is due and payable under the Medicare statute and regulations. Once determined that an overpayment has been made, the amount of overpayment is a debt owned to the United State government. It is important that providers/suppliers refund overpayment to NHIC as soon as they are detected. Below are examples of overpayments:

• Services billed in error
• Services were already paid
• Services were rendered to another patient
• Patient is not my patient



Voluntary Refunds – Overpaid amounts voluntarily reported by providers should not contain language such as “payment in full” intending to absolve the payer of further obligation.

Contractor reviews will be conducted to confirm the amount overpaid or adjusted as indicated by the claims billing history on file. A “no” response on the refund form, under Medicare requested refund indicates the provider is voluntarily refunding the Medicare program.

Partial refunds – A partial refund may be requested when the provider wishes to return a portion of the amount paid by Medicare. Request for an offset of a future payment or refund check for the amount overpaid should be included. Partial refunds do not provide an amended provider remittance notice.

Providers/suppliers requiring a corrected invoice should request an immediate offset or return the amount paid for the entire claim with a request to void initial submission. A corrected claim may be filed once the initial claim is in a voided status.

Refund Checks – Providers/suppliers submitting a refund check should make checks payable to NHIC-Medicare. Refund checks should be forwarded to the address listed on the refund form or check the addresses on the website.
http://www.medicarenhic.com/ne_prov/msp.shtml#ovp

Offset - Overpayments may be recouped by “offset”. Medicare reduces future checks issued to a provider until the amount of overpayment is refunded. When Medicare identifies an overpayment, the offset process is initiated. Providers are sent a letter specifying information regarding the overpayment and are given 30 days to refund the overpaid amount. Overpayment notices contain an accounts receivable number (AR#) which identifies the transaction.

If the refund is not received from the provider within 30 days, a second notice is sent out for overpayments over $50.00, indicating that the overpayment is still outstanding and interest is now accruing. If the overpaid amount is not received upon 40 days of the initial notification,

NHIC will proceed with ‘offsetting’ money from payments to the provider until the overpaid amount is recovered. Interest on the total overpaid amount begins to accrue after the 29th day from the initial notice. Providers may avoid paying interest when choosing the offset method by initially requesting an “immediate offset”. When an immediate offset is requested, a notice is sent with the specific information regarding the offset, but the 40-day period is waived and offset is initiated immediately.Definition of a Medicare Overpayment



Definition of a Medicare Overpayment 

A Medicare overpayment is a payment you receive in excess of amounts properly payable under Medicare statutes and regulations. After Medicare identifies an overpayment, the overpayment amount becomes a debt you owe the Federal government. Federal law requires the Centers for Medicare & Medicaid Services (CMS) to try to recover all identified overpayments.

In Medicare, overpayments commonly occur due to:

** Insufficient documentation
** Medical necessity errors
** Administrative and processing errors

Overpayment Notification and Repayment Process

If you or your staff identify the overpayment, you must report it and arrange to return it by the later of either 60 days after the date the overpayment was identified or the date the corresponding cost report is due. For more information about self-identified overpayments, refer to Medicare Reporting and Returning of Self-Identified Overpayments fact sheet. When Medicare identifies an overpayment of $25 or more, the Medicare Administrative Contractor (MAC) initiates the overpayment recovery process by sending an initial demand letter requesting repayment.

Demand Letter

Demand letters from your MAC explain:

** Medicare made an overpayment
** Interest begins to accrue if you do not repay the overpayment in full within 30 days
** Options to request immediate recoupment or an Extended Repayment Schedule (ERS)
** Rebuttal/appeal rights

Payment Options

Immediate Payment

Follow the directions in the demand letter to submit payment. Request Immediate Recoupment Recoupment occurs when Medicare recovers overpayment by withholding interim payments. Withholding interim payments may be partial (for example, a percentage of payments withheld or a set amount) or complete. You can request your MAC to begin recoupment immediately by following the directions in the demand letter. Request Standard Recoupment You do not need to do anything to request standard recoupment. Your MAC automatically begins recoupment according to the schedule in Figure 1. Note that interest may accrue. Request an ERS If you are unable to pay the overpayment in full in the required timeframe, follow the instructions in the demand letter and request an ERS from your MAC. Other Options

Rebuttal

You can submit a rebuttal to your MAC within 15 calendar days from the date of a demand letter. In your rebuttal statement, explain or provide evidence about why the MAC should not initiate recoupment. While the rebuttal process is not considered an appeal and does not stop recoupment activities, MACs promptly evaluate this information.

Appeal

If you disagree with an overpayment decision, you can file an appeal with your MAC to conduct an independent review of the decision. A redetermination is the first level of appeals in which a qualified employee of the MAC conducts an independent review of the decision. Following an unfavorable or partially favorable redetermination decision, you can request a second-level appeal or reconsideration by a Qualified Independent  Contractor (QIC)

Limitation on Recoupment

The Social Security Act Section 1893(f)(2)(a) provides limitations on the recoupment of Medicare overpayments. It requires that when a valid first- or second-level appeal is received on an overpayment, subject to certain limitations, CMS and MACs cannot recoup the overpayment until the decision on the redetermination and/or reconsideration. This affects the timeframes on recoupment. For more information, refer to MLN Matters® Article MM6183.

Timeframes for Debt Collection Process for Provider Overpayments

Figure 1 shows the timeframes for overpayment debt collection activities. It describes how overpayment collection differs for overpayments subject to the Limitation on Recoupment. It also notes when an action may not apply if an overpayment is in an excluded status. Examples of an excluded status include:

** Requested or approved ERS
** Appeal
** Bankruptcy

Overpayment Collection Process

If you do not pay the overpayment in full, you will receive an IRL 60–90 days after the initial demand letter. The IRL advises you that unless you refund the overpayment or take steps to establish an ERS, the MAC will refer the overpayment to the Federal level for collection. To collect the overpayment, CMS refers eligible delinquent debt to the Treasury or a Treasury-designated Debt Collection Center (DCC). Either the Treasury or the DCC works through the Treasury Offset Program (TOP) to collect the overpayment. To effectively collect the debt that agencies refer, the Treasury issues demand letters, conducts telephone follow-up, initiates skip tracing, refers debt for administrative offset, and refers debt to a private collection agency (PCA). Other collection tools may include Federal salary offset and administrative wage garnishment. The PCA could collect the debt with tools such as skip tracing, credit report search, demand letters, and telephone calls.


An overpayment means any funds that a provider or supplier received or retained under the Medicare program to which the person is not entitled under the program. CMS provided the following non-surprising examples of overpayments:

• Medicare payments for noncovered services.
• Medicare payments in excess of the allowable amount for an identifi ed covered service.
• Errors and nonreimbursable expenditures in cost reports.
• Duplicate payments.
• Receipt of Medicare payment when another payor had the primary responsibility for payment.

Refunding “Claims” versus “Cost Report” Overpayments If an overpayment is “claims” related, the overpayment must be reported and returned within 60 days of “identifi cation.” However, for providers that submit cost reports, if the overpayment is such that it would generally be reconciled on the cost report, the provider would be permitted to report and return the overpayment either 60 days from the identifi cation of the overpayment or on the date the cost report is due, whichever is later.

For example, issues involving upcoding must be reported and returned within 60 days of identification because the upcoded claims for payment are not submitted to Medicare in the form of cost reports. However, for an overpayment that would generally be reconciled on the cost report, such as overpayments related to graduate medical education payments, the provider must report and return the overpayment either 60 days aft er it has been identifi ed or on the date the cost report is due, whichever is later.  “Identifi ed” Overpayments

Th e “identification” of an overpayment triggers a provider’s reporting and refunding obligations, including the commencement of the 60-day period. Hence, the meaning of “identifi ed” is critical. A person has “identified” an overpayment if the person has “actual knowledge of the existence of the overpayment.” Apparently, this standard is met in the following situations—even though the exact amount of the overpayment may not yet be determined:

• A provider or supplier reviews billing or payment records and learns that it incorrectly coded certain services, resulting in increased reimbursement.

• A provider or supplier learns that a patient death occurred prior to the service date on a claim that has been submitted for payment.

• A provider or supplier learns that services were provided by an unlicensed or excluded individual on its behalf.

• A provider or supplier performs an internal audit and discovers that overpayments exist. Th rough these examples, CMS seemed to imply that “actual knowledge” is present if the provider knows of an overpayment issue, even if the provider has not determined the amount of the overpayment. CMS needs to clarify this matter in the fi nal rule.

In addition, a person is deemed to have “identified” an overpayment if the person acts in reckless disregard or deliberate ignorance of the existence of the overpayment. CMS has explained this situation as follows: If a provider receives “information concerning a potential overpayment” or has “reason to suspect an overpayment,” the provider is obligated to investigate the matter timely, reasonably, and with all deliberate speed. If the investigation reveals or confi rms an overpayment, then the person has “identifi ed” an overpayment, and must report and return the overpayment within 60 days (assuming no cost report is involved). However, if the provider fails to make any reasonable investigation, the provider may be found to have acted in reckless disregard or deliberate ignorance of any overpayment.

How to Make the Report and Refund

CMS proposes using the existing voluntary refund process, pursuant to which overpayments are reported using a form that each Medicare contractor makes available on its Web site. Th e information reported would contain:

• Provider/supplier’s name.

• Provider/supplier’s tax identifi cation number.

• How the error was discovered.

• Th e reason for the overpayment.

• Th e health insurance claim number, as appropriate.

• Date of service.

• Medicare claim control number, as appropriate.

• Medicare National Provider Identifi cation (NPI) number.

• Description of the corrective action plan to ensure the error does not occur again.

• Whether the person has a corporate integrity agreement with the OIG or is under the OIG SelfDisclosure Protocol.

• Th e timeframe and the total amount of refund for the period during which the problem existed that caused the refund.

• If a statistical sample was used to determine the overpayment amount, a description of the statistically valid methodology used to determine the overpayment.

• A refund in the amount of the overpayment. A person may request an extended repayment schedule as that term is defi ned in § 401.603.


Medicare overpayment definition

A Medicare overpayment is a payment you receive in excess of amounts properly payable under Medicare statutes and regulations. Once Medicare identifies an overpayment, the overpayment amount becomes a debt you owe the Federal government. Federal law requires CMS try to recover all identified overpayments.

In Medicare, overpayments commonly occur due to:

™ Duplicate submission of the same service or claim;
™ Furnishing and billing for excessive or non-covered services;
™ Payment for excluded or medically-unnecessary services; or
™ Payment to the incorrect payee.


Overpayment Collection Process

When Medicare discovers an overpayment of $25 or more, the Medicare Administrative Contractor (MAC) initiates the overpayment recovery process by sending an initial demand letter requesting repayment. An Intent to Refer Letter (IRL) is mailed 60 days after the initial demand letter.

Demand Letter From Your MAC

Demand letters explain:

™ Medicare made an overpayment;
™ Interest begins to accrue if you do not repay the overpayment in full within 30 days;
™ Options to request immediate recoupment or an Extended Repayment Schedule (ERS); and
™ Rebuttal/appeal rights.


Your Options If You Receive a Demand Letter

You may choose from the following options when responding to an initial demand letter:

Make an immediate payment;
Request immediate recoupment;
Request the standard recoupment process (Automatic Offset/Withholding);
Request an ERS;
Submit a rebuttal; or
Request a redetermination to appeal the overpayment.



BCBS Overpayment Adjustment form

Use this form to request a recoupment from a future remittance or to send us a voluntary refund check for an overpayment we’ve made to you. This form can be used for any of the following plans or programs: Anthem Blue Cross and Blue Shield local plans (including plans sold on or off the Health Insurance Exchange), Federal Employee Program®, New England Health Plans, Medicare Advantage, BlueCard® and Taft Hartley. 

https://www.anthem.com/provider/noapplication/f4/s6/t0/pw_b123660.pdf?refer=ahpprovider



Adjustment Code Reference ID Forward Balance (FB)

• Used to reflect a balance being moved forward to a future remit or a balance that is brought forward from a prior remit.

• When a balance is moving forward to a future remit, the PLB FB contains the TRN02 (check or Electronic Funds Transfer [EFT] trace number) from the current 835 transaction.

• When a balance has been brought forward from a prior remit, the PLB FB contains the TRN02 (check or EFT trace number) that was the Reference ID in the prior remit.

• Use the dollar amount in the PLB to balance the 835 transaction.

• A negative value represents a balance moving forward to a future payment advice. A positive value represents a balance being applied from a previous payment advice.

• The PLB FB is used to move a negative balance from a current 835 transaction into a future 835 transaction. Typically, this happens when we report an overpayment and there aren’t sufficient funds to recoup the entire overpayment amount.


• Forward Balance is tracked at the transaction level and is not claim-specific.





Overpayment Recovery (WO)

• Used when a previous overpayment is recouped from the provider of service.

• Used when a reversal and corrected claim are not reported in the same transaction. WO prevents the prior claim payment from being deducted from the transaction.

• Used to offset the PLB 72.

• Used when a reversal and corrected claim are reported and the overpayment is not immediately recouped. WO prevents the prior claim payment from being deducted
from the transaction. 

Overpayments

• When we identify a claim overpayment, we send a letter requesting a refund. We report a reversal to the original claim and a corrected claim in the 835. Because funds aren’t being immediately recouped, the amount of the overpayment is offset by reporting the amount as a negative value in the PLB WO.

• If the reversal and corrected claim are not reported in the same 835 transaction, the 835 transaction that contains the reversal claim reports a negative value in the PLB WO. The 835 transaction that contains the corrected claim reports a positive value in the PLB WO.


Overpayment Recovery Reduction

• Used when a previous overpayment is recouped from the provider of service.

• If a refund is not received within the timeframe requested in the letter, UnitedHealthcare recoups the money and reports this using the WO adjustment code. The 835 transaction that contains the overpayment recovery reduction will report a positive  value in the PLB WO.


Underpayments

• Used to balance the 835 transaction when the reversal and corrected claims are not reported in the same 835 transaction and prior payment is not being recouped. The 835 transaction that contains the reversal claim will report a negative value in the PLB WO. The 835 transaction that contains the corrected claim will report a positive value in the PLB WO.

• When the reversal and corrected claim are reported in the same 835 transaction, no PLB is reported. Provider refund check reporting

• When a refund check is received, the amount of the refund is reported as a positive value in the PLB WO and a negative value in the PLB 72.

Voided checks

When a check is voided, the amount of the voided check is reported as a positive value in the PLB WO and a negative value in the PLB 72.


Refunds Process

There may be times when Blue Cross must request refunds of payments previously made to providers. When refunds are necessary, Blue Cross notifies the provider of the claim in question 30 days prior to any adjustment. The notification letter explains that Blue Cross will deduct the amount owed from future Payment Registers/Remittance Advices unless the provider contacts us in writing within 30 days.Recoveries and payments for omissions and underpayments shall be initiated within 15 months of the claim’s last date of payment or adjustment. Blue Cross and the participating provider agree to hold each other and the member harmless for underpayments or overpayments discovered after 15 months from the date of payment. 

If Blue Cross returns a claim or part of a claim for additional information, providers must resubmit it within 90 days or before the timely filing period expires, whichever is later. If Blue Cross has made any omissions or underpayments, the Plan will make payment for such errors as soon as they are discovered or within 30 days of written notice from the participating provider regarding the error.

We make every effort to pay claims in a timely manner; however, when a clean claim is not paid on time, we follow the late payment penalty guidelines outlined in House Bill 2052/Regulation 74. Providers automatically receive penalty payment for claims that are not processed in the time frames set forth by House Bill 2052/Regulation 74. The additional payment will almost always appear on the same  payment Register/Remittance Advice as the claims payment and can be identified by the status code “ST, Statutory Adjustment.”

Overpayments

In the event that Blue Cross has overpaid on a claim and we have not sent a request for the overpayment, please return it to us at the following address: 


Blue Cross and Blue Shield of Louisiana
Special Claims Review
P.O. Box 98029
Baton Rouge, LA 70898-9029


Please include the following information:

• Contract number

• Patient name

• Date of service

• Patient account number

• Reason for the overpayment

• Copy of remittance

Please Note: Facilities should actively work credit balances due to Blue Cross and return overpayments to Blue Cross. Refunds greater than $10,000 should be identified back to Blue Cross within 120 days from the occurrence date. This should be done even when credit balance recovery vendors are assisting with this process. Failure to do so will result in the facility being responsible for the fees incurred for the recovery.


Reporting Principal and Interest Amounts When Refunding Previously Recouped Money on the Remittance Advice (RA)

Effective July 5, 2016, CMS is making it easier for providers who receive a favorable appeals decision to identify the claim and/or the refund of principal and interest paid by Medicare.

Palmetto GBA will make sure that the remittance advices are reporting the refunded principal and interest amounts separately, and provide individual claim information. This applies to electronic remittance advice (ERA) only.

Currently reporting of refunded principal and interest amounts for all related claims on the Remittance Advice (RA) is shown as one lump sum amount. This practice creates problems for the provider community as this is not conducive to posting payment properly. Providers have the money but are not able to identify the claim and/or the refund of principal and interest paid by Medicare.

Effective July 5, 2016, MACs are required to report the principal and interest separately, and to provide individual claim information. Specifically, the reporting will be in the Provider Level Balance (PLB) segment of the 835 with an example as follows:

PLB Details - Reporting Principal Refunds

PLB03-1: WW to report overpayment recovery (negative sign for the amount in PLB04) being refunded

PLB03-2 Positions 1 – 25: Account Payable (AP) Invoice Number

PLB03-2 Positions 26 – 50: Claim Adjustment Account Receivable (AR) number

PLB 04: Refund Amount (Principal Refund Amount)

PLB Details - Reporting Interest Refunds


PLB03-1: RU to report interest paid (negative sign for the amount in PLB04)

PLB03-2 Positions 1 – 25: AP Invoice Number

PLB03-2Positions 26 – 50: Claim Adjustment AR number

Please understand that the PLB codes WW and RU will NOT appear on the remittance advice. The last revision to CR 9168 (dated 03/24/2016) indicates that the WW code maps to 'WO' on the provider’s HIPAA PLB code on the RA. Also, the RU code maps to 'L6' on the provider’s HIPAA PLB code on the RA.

Note: Principal Refunds for appeals decisions will appear on the PLB segment as a WO with a negative amount. Interest Refunds for appeals decisions will appear on the PLB segment as a L6 with a negative amount. For each code, the RA will display either the (1) Suppressed Claim Adjustment Number and Patient Control Number (PCN) or HICN, if the PCN is unavailable; or (2) the AR Number associated with the appeal decision.


2 comments:

Anonymous said...

If CMS is going to recoup no matter what, why is it necessary to send them a refund check? Especially if you prefer the recoup method?

UNGAL NANBAN said...

Super

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