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Limitation on Recoupment (935)

Section 935 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) provides limitations on the recoupment of Medicare overpayments. This means that when an overpayment is subject to the limitation on recoupment protections, Medicare will not begin overpayment collection (or will cease collections that have started) when it receives a valid request for a redetermination (first level of appeal), or a reconsideration (second level of appeal). The following provides additional information about this process.

Immediate Recoupment for 935 Overpayments

Providers have the opportunity to request immediate recoupment to avoid making payment by check and/or avoid the assessment of interest if the immediate recoupment pays the debt in full before day 31. An immediate recoupment is considered a voluntary repayment. The request for immediate recoupment should be received in writing at least 16 days from the date of initial demand letter to avoid the assessment of interest; however, when the request is received after 16 days from the date of the demand letter, the debt shall be placed in an immediate recoupment status and interest will continue to accrue if the debt is not fully collected by day 31. Please note the following two options for immediate recoupment:

  1. A one-time request on the total overpayment amount (All accounts receivables) in a single demand letter and any future demanded overpayments; Or
  2. A request on the demanded overpayment (All accounts receivables) addressed in a single demand letter only.

For overpayments that receive a demand letter:

  • Complete the J15 Part A and HH&H Services Immediate Offset Request Form
  • Fax request to: 1.615.664.5932

Results Letters

Overpayments may be the result of a post-pay review or a Medicare Secondary Payer (MSP) recovery. Post-pay reviews may be done by any of the Medicare Contractors.

Based on the overpayment determined by the post-pay review or MSP recovery, CGS will adjust the claim and apply the limitation on recoupment. A demand letter explaining the reason for the overpayment decision is generated and sent to the provider.

Interest begins to accrue on the 31st day from the date of the demand letter, and recoupment will proceed on day 41 from the demand letter.

Rebuttal Process

An opportunity for you to rebut the recoupment action is available by submitting a statement within 15 days of the notice. The rebuttal process is not considered an appeal and does not stop recoupment activities. Rebuttal statements should explain or provide evidence about why the recoupment should not take place. Rebuttal statements can be mailed to:

CGS Administrators, LLC
Attn: HHH OPR
P.O. Box 20014
Nashville, TN 37202

Please send rebuttal statement separately from redetermination requests.

Redetermination (First Level of Appeal)

Recoupment will proceed on day 41 from the demand letter unless you submit a valid redetermination that stops the recoupment process. A valid redetermination request:

  • Must be received by the 30th day from the date of the demand letter to stop recoupment of the 935 overpayment
  • May be received within 120 days from the date of the demand letter, recoupment will stop once the redetermination request is received, but any recoupment already taken will not be refunded.
  • Includes a completed Redetermination FormPDF and supporting medical record documentation.

If you DO NOT request a redetermination or make payment in full by the 39th day:

  • A withholding is initiated on the Remittance Advice (RA) to begin recoupment on the 41st day from the initial demand letter.
  • Interest accrues on the money owed from the date of the initial demand letter.
  • The withholding amount will appear in the 935 withholding section of the RA.

If you DO request a redetermination:

  • The recoupment stops, but not the accrual of interest.
  • A letter will be sent to inform you that the appeal request has been received and the recoupment stopped.

There are three outcomes that may result from the redetermination:

  • Full reversal – The claim will be adjusted and shown on the Medicare remittance advice but will not impact reimbursement. An adjustment will be made to reduce the overpayment balance and accrued interest to $0.00. A refund will be issued for any collections on the debt. The refund may be withheld and applied to other debt that you might owe, and any excess will be released to you.
  • Partial reversal – The claim will be adjusted and shown on the Medicare remittance advice but will not impact reimbursement. The overpayment will be reduced and interest will be recalculated based on the revised overpayment amount. A refund will be issued for any amounts collected in excess of the revised overpayment amount and recalculated interest charges. A letter will be issued to inform the provider of the recalculated overpayment amount and balance due. This letter will indicate that recoupment will begin no earlier than 60 days from the date of the revised overpayment determination.
  • Full affirmation – A letter will be issued to inform the provider of the balance due. The letter will state that recoupment will begin no earlier than 60 calendar days after the Medicare redetermination notice.

Reconsideration (Second Level of Appeal)

If you are not satisfied with the outcome of the redetermination, you may file a reconsideration with the Qualified Independent Contractor (QIC) within 60 days of the redetermination notice. When CGS is notified by the QIC of your valid and timely request for reconsideration, recoupment of the overpayment will stop, or not initiated if it has not yet begun. In addition:

  • The amount already recouped will be applied first to interest and then to principal.
  • Other debts you might owe will continue to be collected; but any monies related to this debt will not be withheld or placed in suspense while it is in the appeal status.

There are three outcomes that may result from the QIC reconsideration:

  • Full reversal – The claim will be adjusted and shown on the Medicare remittance advice but will not impact reimbursement. An adjustment will be made to reduce the overpayment balance and accrued interest to $0.00. A refund will be issued for any collections on the debt that you might owe, and any excess will be released to you.
  • Partial reversal – The claim will be adjusted and shown on the Medicare remittance advice but will not impact reimbursement. The overpayment will be reduced and interest will be recalculated based on the revised overpayment amount. A refund will be issued for any amounts collected in excess of the revised overpayment amount and recalculated interest charge. A letter will be issued to inform the provider of the recalculated overpayment amount and balance due. This letter will indicate that recoupment will begin no earlier than 30 days after the date of the revised overpayment determination.
  • Full affirmation – Recoupment activity may be resumed 30 days after the date of the notice of the reconsideration.

If you subsequently appeal the overpayment to the Administrative Law Judge (third level), Appeals Council (fourth level), or the Judicial (fifth level), CGS will continue to recoup payment until the debt is satisfied in full.

Resources:

Updated: 12.21.21

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