Successfully Handling Recoupment Requests

Recoupment and Refund

Recoupment is a request for a refund when an insurance company overpays an account. On the other hand, a billing refund is a technical process of returning the excess money in the specified amount that the party, medical provider, patient, or other responsible parties owes according to the recoupment request. Some of the most common reasons for recoupment are:  

  • The insurance company was not aware of a patient’s other health insurance coverage 
  • A duplicate payment was made for the same service code
  • A duplicate payment was made for the same service date
  • A duplicate claim was made in error
  • The payment for a claim was for an ineligible beneficiary
  • The payment for a service or treatment occurred after the termination of the patient’s plan
  • An accidental payment was sent to the wrong health care provider
  • A medical billing error was made when calculating the patient’s deductible
  • A payment has been made for a supply or service that was not covered in the patient’s plan

How does Recoupment Process work?

Some recoupment processes are relatively straightforward, while others can be more complicated. In a few rare cases, legal action is taken by the medical provider or the insurance provider to help deal with a miscommunication or an impasse. Most of the time, the recoupment process starts with a written request for repayment. This might be accompanied by a phone call, e-mail, or other electronic communication to alert the medical insurance provider that an error occurred. Most insurance companies will allow a response time of 30 to 60 days after the initial mailing was sent.

The response time is typically included in the written request to ensure that the medical insurance provider is aware of the imposed deadline. If the response is not received in the acceptable window of time the insurance company will then take a more proactive approach. This typically involves transferring the case to Defense Health Agency (DHA) who will actively handle the insurance claim management collection process. If the provider believes that the claim is indeed invalid, an appeal can be filed to further evaluate the decision. Though the Defense Health Agency’s claim collection has different alternatives for recoupment.

Follow up Actions by Defense Health Agency (DHA)

If a provider fails to respond, or files an appeal and refuses to take further action the Defense Health Agency (DHA) might take one or more of the following actions: 

  • Filing for litigation or legal action against the provider in a court of law.
  • Recovering the recoupment amount from the provider’s retirement fund or federal funding.
  • Subtracting the overpayment amount from upcoming submitted claims.
  • Notifying credit bureaus to alter your credit score

Appealing Recoupment Request

Providers who believe the recoupment request is authentically invalid, have a few options. This starts with requesting all the documentation from the insurance company relating to the recoupment request. This request will include information about the patient’s account, the patient’s play details, and the procedure codes used in the medical billing process, as well as verifying the service date. The medical provider who is contesting the recoupment request can then cross-check the contract terms to ensure that the recoupment request was made within the established guidelines.

It’s also a good idea to check with the insurance commissioner about your state laws, as soon as possible after receiving the contested recoupment request. A few states apply stricter timelines for recouping funds, which can affect a possible legal process, should it occur later. When analyzing the documents, the provider needs to identify the areas where the breach of contract occurred. This is a critical step for assessing which party is liable for the recoupment, and to what degree the agreement needs to be honored financially. 

Avoiding Recoupment Request

As you have observed in common reasons for recoupment, it happens due to mistakes of the revenue cycle team. You have to bring more accuracy in your medical billing and coding operations to avoid occurrences of recoupment requests, which can be done in the following ways: 

  • Keep your administrative and billing staff updated on the medical billing and coding area by continuously providing training.
  • Improve patient intake and information collection processes.
  • Verify a patient’s coverage as part of the scheduling process.
  • Constantly check payer reimbursement policies for coding and billing updates. 

Rather than hiring and training additional administrative staff, a lot of small practices that have experience recoupment issues in the past will outsource their medical billing services to MedicalBillersandCoders (MBC). Not only does this free up more time for treating patients, but it also gives you the peace of mind that comes with knowing highly trained and experienced professionals who are using the medical billing industry’s best practices to avoid future recoupment requests and refunds. To know more about our billing and coding services, contact us at info@medicalbillersandcoders.com / 888-357-3226

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