CMS Pub. 100-06, ch. 3, § 200

Recoupment Overpayments

(Rev. 293, Issued: 09-14-17, Effective: 04- 02-18, Implementation: 04-02-18)

For purposes of this instruction, the Provider, Physician and other Supplier will be

referred to as “Provider”.

Section 1893 (f)(2)(a) of the Social Security Act provides limitations on the recoupment of Medicare

overpayments and the limitations extend to the redetermination (first level) and the reconsideration

(second level). This section provides protection to providers during the initial stages of the appeal

process. It also requires the payment of interest on monies recouped when the provider prevails at the

Administration Law Judge (ALJ) or subsequent levels of appeal. These limitations do not affect a

provider’s right to appeal nor the requirements and timeframes associated with appealing; however, to

stop recoupment, a provider must act decidedly to appeal. If the contractor discovers a Bankruptcy or

the provider is in bankruptcy and appeals an overpayment, the contractor shall refer to publication

100.06, Chapter 4, Bankruptcy, § 140.4.3

The contractor shall cease recoupment or not begin recoupment when a valid redetermination or

reconsideration request is received timely on an overpayment subject to these limitations (see

§ 200.1 below). The provider has until the appeal deadline to file an appeal (refer to

publication 100.04, Chapter 29). If a provider wants to delay recoupment, it must submit the

redetermination appeal request within 30 days of the demand letter date. To continue the delayed

recoupment, the provider will have 60 days from the redetermination decision to submit a

reconsideration request. If the request is received before the appeal deadline but after recoupment

has started, the contractor shall stop the recoupment. The contractor shall not refund any monies

collected back to the provider, unless otherwise directed by the Centers for Medicare & Medicaid

Services (CMS). The contractor shall be accountable to ensure the debts continue to age and accrue

interest until the debt is paid in full.

After the first two levels of appeal are completed, the contractor shall resume recoupment and Normal

debt collection processes. Whether or not the provider subsequently appeals the overpayment to the

ALJ, or subsequent levels (Department Appeals Board (DAB), or Federal court), the contractor shall

initiate recoupment at 100% until the debt is satisfied in full, unless an Extended Repayment Schedule

(ERS) is established. If the debt was referred to Treasury and the provider files for an appeal, the

contractor shall recall the debt from Treasury while in an appeal status. If the appeal decision is

unfavorable to the provider, any outstanding debt will be referred back to Treasury, unless an

approved ERS is established or the provider pays the debt in full.

The contractor shall take the necessary steps to adjust affected account receivables (AR) after each

favorable appeal decision. The contractor shall apply the funds collected (ERS payments, voluntary

payments or recoupments) to any outstanding eligible overpayments first (monies shall be applied to

interest first and then to principal) and any funds in excess will then be refunded to the provider.

If the provider prevails at the third level of appeal or higher:

Payment of Section 935 (f)(2) interest is only applicable to overpayments recovered through

involuntary recoupment under the limitation on recoupment provisions. Interest is not payable

on the principal amount recouped on voluntary payments, (e.g., payments from existing ERS,

immediate recoupment prior to the Qualified Independent Contractor (QIC) decision, payment

suspensions and check payments, including checks paid to Treasury).

Requirements that remain in effect:

1. The appeal timeframes and filing requirements. (Refer to Publication 100.04, Chapter 29)

2. Overpayment interest accrual and assessment requirements. (Refer to 42 CFR 405.378 and

Publication 100.06, Chapter 4)

3. Underpayment interest requirements. (Refer to 42 CFR 405.378 and Publication 100.06,

Chapter 4)

4. Rebuttal requirements. (Refer to 42 CFR 405.373-405.375)

Note: Rebuttal statements are not appeal requests. Only valid appeal requests at the first and

second level trigger Section 935(f)(2) Limitation on Recoupment rights in accordance with 42

CFR 405.379.

5. Suspended payment requirements. (Refer Publication 100-08, Chapter 4)