Elements of a Demand Letter - JA DME

There are two overpayment demand letters, an Initial Demand Letter, and an Intent to Refer Letter (ITR) used in the Medicare debt collection process. The purpose of an overpayment demand letter is to notify the providers and suppliers of the existence and amount of an overpayment, and to request repayment.

Following are the elements of the Medicare Initial Demand Letter. The Demand Letter includes detailed information necessary to satisfy the overpayment and information on how to submit an appeal if there is a disagreement with the overpayment.

This guide provides a complete description of each element (section) of the initial demand letter, including helpful links to our webpages that provide further explanations, submission addresses and fax numbers, and pertinent links to cms.gov to learn more about the topics of bankruptcy, Surety Bonds, and the Treasury Offset Program (TOP).

Initial Request

When Medicare (Noridian) or other contractors such as Comprehensive Error Rate Testing (CERT), Recover Auditor (RAC), Supplemental Medical Review Contractor (SMRC), or Unified Program Integrity Contractor (UPIC) determine that an overpayment has occurred, an Initial Demand Letter is issued. Providers are given 30 days from the date of the Demand Letter to pay the requested overpayment amount. To avoid interest from accruing, timely payment is necessary.

Date

The date on the demand letter is the date the account receivable (AR) is established and the date the letter is mailed. Payment or an appeal request is due within 30 days of the letter date.

Letter Number

The Letter Number represents a unique system number.

The Demand Letter includes detailed information necessary to satisfy the overpayment and information on how to submit an appeal if there is disagreement with the overpayment. The Demand Letter will also be assigned a Letter Number which is used to identify what has been demanded by Medicare.

Supplier Information

This section provides the name and address of the supplier whose claim(s) was involved in the overpayment.

Medicare Overpayment

This section provides the overpayment amount, the Provider Transaction Access Number (PTAN), and the National Provider Identifier (NPI) of the supplier whose claim(s) was involved in the overpayment.

This opening paragraph advises you that an overpayment was identified, whether the overpayment is subject to the Limitation of Recoupment Process (Medicare Modernization Act (MMA) 935), and the amount of the overpayment.

It also advises that the details of the overpayment are provided in the enclosure.

Why you are Responsible

Reasons are given for responsibility for the overpayment and lists the applicable authorities that apply. It will include the authority regarding Limitation on Recoupment if applicable.

It also gives the first reference to your appeal rights.

Rebuttal Process

The rebuttal process is explained.

Note: The rebuttal process does not apply to overpayments subject to the Limitation of Recoupment Process (Medicare Modernization Act (MMA) 935

Learn more about the rebuttal process on the Overpayments section of our website.

Interest Assessment

The interest percentage is explained that will be applied if payment is not received in 30 days, and the exact date when interest will begin to be assessed.

Suspended Funds Applied to the Overpayment and has a Remaining Outstanding Balance

The rules are defined if suspended funds are applied to the overpayment.

Suspended funds involving providers, physicians and suppliers who have been put on payment suspension under 405.372 (e) not a "recoupment" for purposes of the limitation on recoupment. Suspended funds is not a "recoupment" as this term is defined in §405.370. CMS is only limited by section 1893(f)(2) of the Act from recouping Medicare payments. We are not restricted in our ability to apply suspended funds to reduce or dispose of an overpayment. The Provider cannot appeal a payment suspension; only the resulting overpayment determination, may be appealed and subjected to limitation on recoupment. Exception: If the suspended payments are insufficient to fully eliminate any overpayment, and the provider or supplier meets the requirements of 42 CFR § 405.379 "Limitation on Recoupment" provision under §1893(f)(2) of the act will be owed to Medicare.

Payment by Recoupment

This section provides the date and the situations that will begin the recoupment process.

Important Note: In HIGLAS when two or more providers are affiliated and have the same Tax Identification Number (TIN), payments may be withheld from one provider to collect another provider's overpayments.

Make a Payment or Arrange for Payments

This section explains where to send your refund check, and the last date to send your refund before interest begins to be assessed.

Immediate Recoupment

The Immediate Recoupment (also known as Immediate Offset) process is explained and how to request it.

The Immediate Recoupment Form provides the fax number and explains:

Complete this form when requesting immediate offset of a Medicare Noridian DME payment to an outstanding debt. This request for immediate recoupment must be received in writing no later than 16 days from the date of initial demand letter.

Learn more about the Immediate Recoupment process on the Overpayments section of our website.

If you Wish to Appeal this Decision

This section provides appeal instructions, and "935" will be included in the first line if the overpayment is subject to section 935(f)(2) of the Medicare Modernization Act (MMA) (section 1893(f)(2) of the Social Security Act), Limitation on Recoupment (42 CFR 405.379).

Learn more about the appeal process on the Appeal section of our website

Note: Please send your request for redetermination via Noridian Portal (NMP), fax or mail it to us.

How to Stop Recoupment

If the overpayment and any assessed interest has not been paid in full, you can temporarily stop Medicare from recouping any payments. If you act quickly and decidedly, Medicare will stop recoupment at two points.

First Opportunity: We must receive a valid and timely request for a redetermination within 30 days from the date of this letter. We will stop or delay recoupment pending the results of an appeal. To assist us in expeditiously stopping the recoupment process, we request that you clearly indicate on your appeal request that this is a 935 overpayment appeal for a redetermination.

Second Opportunity: If the redetermination decision is (1) unfavorable, we will begin to recoup no earlier than the 60th day from the date of the Medicare redetermination notice (Medicare Appeal Decision Letter); or (2) if the decision is partially favorable, we will begin to recoup no earlier than the 60th day from the date of the Medicare revised overpayment Notice/Revised Demand Letter. Therefore, it is important to act quickly and decidedly to limit recoupment by submitting a valid and timely request for reconsideration within 60 days of the appropriate notice/letter. The address and details on how to file a request for reconsideration will be included in the Redetermination decision letter.

What Happens Following a Reconsideration By a Qualified Independent Contractor (QIC)

This section will be provided if the overpayment is subject to section 935(f)(2) of the Medicare Modernization Act (MMA) (section 1893(f)(2) of the Social Security Act), Limitation on Recoupment (42 CFR 405.379).

It explains the importance of submitting valid and timely request for a redetermination or a reconsideration, as applicable.

It explains the timing of the resumption of recoupment, and the fact that interest continues to accrue even during the period(s) when recoupment is stopped.

Medicaid Offset

This section explains the Medicaid Offset process and the applicable authority.

Right to Inspect Records Prior to Referral to Treasury

This section applies to Intent to Refer (ITR) letters. For ITR letters, the applicable Noridian address to which to send your request to inspect and copy records related to the overpayment will be provided.

For Individual Debtors Filing a Joint Federal Income Tax Return

Learn more about the Treasury Offset Program (TOP) on the cms.gov website

CMS Internet Only Manual (IOM)
Medicare Financial Management Chapter 4 - Debt Collection
70 - Non-Medicare Secondary Payer (Non-MSP) Debt Referral Instructions and Debt Collection Improvement Act of 1996 (DCIA) Activities (Rev. 77, Issued: 09-16-05, Effective: 10-17-05, Implementation: 10-17-05)

For Debtors that Share a Tax Identification Number(s)

Important Note: This section explains that this overpayment could be recouped from another provider/supplier who shares the TIN with the provider/supplier whose claim was overpaid.

Federal Salary Offset

Another offset possibility is provided.

If you have filed a Bankruptcy Petition

Learn more about the Medicare Bankruptcy process on the cms.gov website

If you have a Surety Bond

Learn more about claims against Surety Bonds on the cms.gov website:

CMS Internet Only Manual (IOM)
Publication # 100-08, Medicare Program Integrity Manual
Chapter 10 - Medicare Enrollment
15.21.7.1.1 - Model Letters for Claims Against Surety Bonds (Rev. 681, Issued: 10-27-16 Effective: 01-30-17, Implementation: 01-30-17)

The Overpayment Report provides the Claim Level Details of the Overpayment

Each overpayment letter mailed by Noridian contains one or more Invoice Numbers as well as a list of the specific patients and dates of service included in the overpaid amount(s). The same Invoice Number will appear as an FCN on your remittance notice if the overpaid amounts are withheld (offset) from a payment. The Invoice Number is equivalent to an "accounts receivable" number.

The Invoice Number is the best way to identify the specific patients associated with overpayments. Please retain the letter containing the invoice number(s) associated with each overpayment notification. There may be multiple overpayments included in a single letter. It may be helpful to make a list of patients associated with any overpayment letters you receive from Noridian and use this information to match up to the Invoice number(s) on subsequent remittance notices.

Intent to Refer (ITR) FYI

An Intent To Refer letter is sent when the debt is at least 30 days delinquent and is not in a status excluded from debt referral. In those cases, the letter will state:

RE: Medicare Overpayment and Notice of Intent to Refer Debt to the Department of Treasury's Debt Collection Center for Cross Servicing and Offset of Federal Payments and Certain Eligible State Payments - MMA 935.

Note: If a provider is terminated, the Intent To Refer letter is sent immediately when the debt becomes delinquent (no 30-day waiting period).