Immediate Recoupment

Medicare allows providers to sign up for Immediate Recoupment, a process which allows overpayments to be automatically recouped from currently processed and paid claims. The provider must have currently processed and paid claims to cover the overpayment amounts prior to the 30th day, so interest will not accrue.

Request Immediate Recoupment

If a provider decides to request immediate recoupment on a specific overpayment demand, the immediate recoupment form must be completed correctly, received timely and include a copy of the overpayment demand letter. The form must be received, by Noridian, within 30 days from the date of the overpayment demand letter in order for the immediate recoupment to be created before any interest starts to accrue. Recoupment on the overpayment will begin after the 41st day from the overpayment demand letter.

An immediate recoupment must be requested by the provider. The provider must complete and fax/mail the form and demand letter to Noridian as indicated on the form. Access the Immediate Recoupment Form from the Overpayment and Recoupment Forms webpage.

Immediate Recoupment is a voluntary repayment option. There are three types of Immediate Recoupment requests:

  1. One-time repayment request for all current overpayment(s) addressed in reference demand letter and all future overpayments
    • This is a one-time request to have all current and future overpayments recouped atomically based upon funds available for provider
    • One form for each PTAN and NPI combination must be submitted with required information (a valid Provider signature is required
    • After provider has set up for this option, Demand Letters will continue to be sent in order to communicate all overpayments. The overpayment amount listed on each Demand Letter will automatically recoup 15 days from date of Demand Letter, as long as there are current processed and paid claims available to cover overpayment amount indicated on Demand Letter
    • If there is not enough current processed and paid claims available to cover overpayment, remaining overpayment balance will continue to accrue interest until the balance is paid in full
  2. Single repayment request for current overpayment(s) addressed in referenced Demand Letter only
    • Every claim number included in specific Demand Letter will be offset with Immediate Recoupment process, as long as there are current processed and paid claims available to cover overpayment amount indicated on Demand Letter
    • This option is available for first 39 days from date of Demand Letter
      • If specific patient claim information has not offset by Day 40, each account listed will accrue interest and be collected by offset on Day 41, along with interest accrued. CMS has established these rules for this type of payment method. This process cannot be stopped. After Day 41, remaining overpayment amounts must be individually collected by other payment methods
    • If there are not enough funds available to offset overpayment amount in Demand Letter, accounts will continue to accrue interest until they are paid in full
  3. A request to terminate a previously established immediate recoupment request made on all current and future overpayments
    • One-time request to discontinue recoupment of all current and future overpayments atomically that was previously requested. This will discontinue the automatic recoupment of all Demand Letters from that point forward
    • One form for each PTAN and NPI combination currently set up for automatic recoupment submitted with required information (a valid Provider signature is required) in order to discontinue this automatic Immediate Recoupment process

Benefits of Immediate Recoupment

Avoid Interest Accumulating on Overpayments

If providers are set up for immediate recoupment, demanded overpayments are offset by day 16. Interest without immediate recoupment or receipt of payment will begin accrual on day 31.

Timeframes (Based on Date of Demand Letter)

  • Day 16 - Immediate Recoupment starts (if requested by the provider). Recoupment shall begin for overpayments not subject to Limitation on Recoupment provisions of Section 935 (f)(2) of the MMA. Unless the debt is in an excluded category (ERS Request, an approved ERS, appeal or bankruptcy)
  • Day 31 - Interest shall begin to accrue

All overpayments will be communicated to the provider by an overpayment demand letter. Payments for any overpayments must be made to Medicare and applied within 30 days, if not, interest will start to accrue on day 31. Interest will begin accruing on the principal balance starting on the 31st day in 30-day increments.

If a provider is unable to satisfy the overpayment within 30 days from the date of final determination and overpayment demand for repayment, interest will begin to accrue on the unpaid principal balance and is due and payable for each full 30-day period that an overpayment balance is outstanding. Medicare will first apply any payments received to the accrued interest charges and then to the remaining overpayment principal. If the provider has more than one overpayment outstanding and a payment is received, the contractor credits the payment to the oldest overpayment first, unless the provider designates otherwise.

Another way to avoid overpayment interest is to request to be set up for immediate recoupment. To ensure interest will not accrue, the provider must have current processed and paid claims to cover the overpayment amounts prior to the 30th day.

Any open debt will be offset by current payments owed to the provider from Medicare. If there is not enough current processed and paid claims available to cover the overpayment, the remaining overpayment balance will continue to accrue interest until the balance is paid in full.

If a provider decides to request immediate recoupment on a specific overpayment demand, the immediate recoupment form must be completed correctly, received timely and include a copy of the overpayment demand letter. The form must be received, by Noridian, within 30 days from the date of the overpayment demand letter in order for the immediate recoupment to be created before any interest starts to accrue. Recoupment on the overpayment will begin after the 41st day from the overpayment demand letter.

View immediate recoupment options.

Timeframes (Based on Demand Letter Date)

  • Day 1 - The accounts receivable (AR) is created, the initial demand letter sent to the provider.
  • Day 15 - Deadline for provider rebuttal request. A rebuttal does not delay recoupment.
  • Day 16 - Immediate Recoupment starts (if requested by the provider)
    • Recoupment shall begin for overpayments not subject to Limitation on Recoupment provisions of Section 935 (f)(2) of the MMA
    • Unless the debt is in an excluded category (ERS Request, an approved ERS, appeal or bankruptcy)
  • Day 31 - Interest shall begin to accrue.
  • Day 41 - If not paid in full by day 40, recoupment begins for overpayments subject to Limitation on Recoupment provisions of Section 935(f)(2) of the MMA unless in an excluded category (ERS Request, an approved ERS, appeal or bankruptcy).
  • Day 90 - Noridian will attempt to contact the provider by telephone if the debt is 60 days delinquent and not in a status excluded from referral to Treasury.
  • Day 61-90 - Noridian will send the Intent to Refer (ITR) on eligible delinquent debts to the provider.
  • Day 126-15 - Eligible delinquent debt shall be referred to Treasury.

At least 7 days prior to referral to Treasury - Noridian will make a second call to the provider before the debt is referred to Treasury.

No Need to Mail a Check to Medicare

If providers are set up for immediate recoupment, overpayments will be satisfied by Medicare payments owed to the provider. There would be no need to mail in a check to Medicare as payments will automatically pay any outstanding debts.

Any open debt will be offset by current payments owed to the provider from Medicare. If there is not enough current processed and paid claims available to cover the overpayment, the remaining overpayment balance will continue to accrue interest until the balance is paid in full.

If a provider is set up for immediate recoupment, a demand letter with any overpayments will still be sent to the provider. Any offset amounts will show up on the remittance advice with the PLB reason code of WO (withholding).

Note: If a provider has submitted a request to be set up for immediate recoupment for all future overpayments, but the request has not yet been processed and a demand letter is received, a check should be sent to avoid accruing interest. If the immediate recoupment request for all future overpayments has been processed and the demanded overpayment is being offset prior to the payment being processed (checks will be processed within 20 calendar days), the check will be applied according to CMS Medicare Learning Network (MLN) Matters (MM)3274.

Save Time

The provider will spend less time submitting unnecessary paperwork and payments for every demand letter if they are set up for immediate recoupment on all future overpayments.

Sign Up is Easy

The provider must complete and fax or mail the form and demand letter to Noridian as indicated on the form. See Immediate Recoupment form and instructions.

Identify if Provider is Set Up for Immediate Recoupment

Q. Is a provider set up for Immediate Recoupment?
A. Immediate recoupment allows a provider's overpayments to be collected via any current Medicare claim payments. If current overpayments are not being satisfied until the 41st day from the date of the demand letter, the provider's related Provider Transaction Access Number (PTAN) might not be set up for immediate recoupment. If the provider is set up for immediate recoupment, overpayments will be satisfied on day 16 if there are any current Medicare claim payments being generated.

Q. How does a provider know if they are currently set up for immediate recoupment?
A. Currently, the provider must call our Provider Contact Center and ask for the Recoupment team. The Recoupment team is able to determine if the provider is currently set up for immediate recoupment. Once the provider has found out if they are set up for immediate recoupment, they should keep track and share that information with their billing personnel.

If a provider is set up for immediate recoupment, the overpayment demand letters will still be sent to the provider. CMS requires contractors to send the demand letters out.

Q. Are the provider's overpayments collecting after they have been set up for Immediate Recoupment?
A. Overpayments are offset with current paid Medicare claims. Medicare claims will process normally. Once the provider's claims have finalized and there is payment, the payments will apply to the oldest pending overpayment. If there is not enough claim payment to satisfy the overpayment in full, the remaining overpayment balance could accrue interest until the overpayment has been collected in full.

Q. Why would a provider continue to receive demand letters when they have been set up for immediate recoupment?
A. If a provider is set up for immediate recoupment, a demand letter with any overpayments will still be sent to the provider. The demand letter would be informational. There are two ways to determine if a provider is set up for immediate recoupment, either by looking on their Remittance Advice (RA) or by calling the Provider Contact Center and ask for the Recoupment team to verify.

If the provider is set up to offset all future overpayments, it is unnecessary for the provider to submit an immediate recoupment form for each overpayment demand letter.

Identify Immediate Recoupment on Remittance Advice (RA)

To determine if immediate recoupments are occurring on currently paid Medicare claims, a provider can look on their RA. There are two key PLB Reason Codes located in the Provider Adjustment Details on the RA: WO - Withholding and FB - Forwarding Balance.

Forwarding Balance (FB) means a claim has adjusted on the providers RA. The FB code is informational and informs the provider that no funds were taken, it just indicates that an adjustment has been made. The main reasons for an FB is:

  • A claim adjusted because an overpayment was found. Medicare will send an overpayment demand letter when an overpayment is identified and payment needs to be made to Medicare.
  • An adjustment was done but the allowed amount stayed the same. The FB informs the provider that the requested adjustment was completed.
  • A claim adjusted due to an error discovered by the provider, which was refunded to Medicare on a submitted voluntary check. The FB informs the provider the requested adjustment was completed.

Withholding (WO) means an offset was completed as a result of an existing overpayment (A/R accounts receivable). The WO indicates Medicare has deducted funds from the RA to satisfy an overpayment. A reference number (the original Internal Claim Number (ICN) and Medicare ID is applied for tracking purposes. The FB code will be sent first to notify of the adjustment and a WO RA will be sent second to notify of the offset of funds.

When a WO occurs, an aggregate account number will appear in the Financial Control Number (FCN). It will be the number followed by AG. Aggregate means there are at least two or more overpayments for less than the Medicare under-tolerance amount of $25. Each month Medicare checks to see if two or more overpayments of the same type reach the $25 limit. If the amount is met, one overpayment demand letter is sent. To learn more regarding collections on overpayments, visit the CMS Internet Only Manual (IOM), Publication 100-06, Chapter 3 - Overpayments.

Visit the Standard Paper Remittance (SPR) Advice Field Descriptions webpage for more RA field headings and descriptions.

 

Last Updated Nov 02 , 2022