APMA News - September/October 2019 - 34

Reimbursement
By APMA Health Policy and Practice Committee

Dealing with Private Payer Recoupments
Health plans' practice of recouping amounts previously paid
is irritating and burdensome. Plans request repayment for myriad reasons such as overpayment for a covered service.
A common recoupment type is "retroactive denial." Retroactive denials occur when a plan claims it should have denied
payment for services because: 1) the individual was not eligible
for coverage when the service was rendered; or 2) the service
was not covered because it was medically unnecessary or did
not meet the plan's coverage guidelines.
Plans also seek recoupment due to coordination of benefits
errors (e.g., the plan paid as primary payer when it should have
paid as secondary payer).
The two main resources to consult to determine your rights
when a plan requests reimbursement are: 1) your contract with
the plan; and/or 2) state law.
The following provisions in a provider contract may affect
a plan's ability to recoup funds from you:
An explicit provision allowing for recoupment.
Almost all provider contracts include a provision that
allows the plan to adjust payments retroactively. Multiple provisions may allow such adjustments, depending
on the grounds for the adjustment. Ensure your contract allows a plan to make its specific request.
A time limit on recoupment requests.
The contract may include a limited timeframe during
which the plan may recoup amounts paid previously.
This limitation may reflect applicable law or your plan
negotiations.
A process for objecting to or appealing a recoupment
request.
This process may be expressed in the agreement or the
plan's policies and procedures. It may apply specifically
to refund requests for previously paid amounts or to
broader disputes with the plan. If you object to a recoupment request, be sure to identify this process and follow
the applicable procedures within any timeframe required.
A provision allowing the plan to offset amounts you
owe against current claims.
Another common contractual provision allows plans to
recoup amounts through offsets against current claims.
If your agreement contains this provision, determine
whether it sets forth conditions for the offset, for example, whether the plan will only offset if you do not submit payment or object within a specific timeframe. If you
do not object to the recoupment request (i.e., you believe
the amounts requested are due), you may submit payment by check rather than a plan recoupment through
offset in order to avoid the administrative hassle involved
in such offsets.

34 APMA News September/October 2019

State law may regulate whether, or under what circumstances, a plan may recoup money from providers. APMA maintains
a summary chart of state recoupment laws at www.apma.org/
statereferencemanual.
State recoupment laws may address various issues such as:
1) the timeline during which a plan may retroactively deny a
service or recoup overpayment; 2) the information a plan must
furnish when requesting a recoupment; 3) whether the plan
may offset the amount due against amounts it owes the provider; or 4) whether the provider has the right to appeal. Laws vary
greatly in the amount of protection they provide-from a law
that broadly prohibits recoupments beyond a specific period to
a law that requires plans to comply with certain notification
requirements when requesting recoupment.
However, it is important to understand which types of plans
are subject to a state law limiting recoupment. For example, a
state law limiting recoupment would generally be preempted in
the case of individuals covered under the Federal Employees
Health Benefits Program, a military health-care program, or
Medicare (whether under Medicare fee-for-service or a Medicare
Advantage plan). State law is also generally preempted in the
case of self-insured employer group health plans.
State law may apply in the case of employer group plans that
are not self-insured if the laws are viewed as regulating the "business of insurance." State law would apply to plans selling coverage directly to individuals and to ACA coverage sold through
an exchange.
If you believe a recoupment request you received is inconsistent with applicable state law, that your contract does not
support such a request, or the plan has not followed applicable
requirements of the law or your contract, include such information as part of your objection.
Where recoupment is requested based on coordination of
benefits, you may generally bill the primary payer for the services. If the billing timeframe has passed, include that information in your objection.
For retroactive denial based on ineligibility for benefits, you
can collect payment from the individual. However, in cases of
retroactive denial because the service was not covered, you may
be precluded from collecting from the member by a "hold harmless" clause in the plan's contract.
For more information on recoupment provisions in provider contracts, and dealing with recoupment requests, see chapter three of APMA's Private Insurance Resource Guide at www.
apma.org/pirg.
n
For further advice, contact the Health Policy and
Practice department at healthpolicy.hpp@apma.org.

http://www.apma.org/statereferencemanual http://www.apma.org/statereferencemanual http://www.apma.org/pirg http://www.apma.org/pirg

APMA News - September/October 2019

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