As explained by National Government Services, one of the largest Medicare contractors, “recoupment is the act of recovery…of any outstanding Medicare debt by reducing present or future Medicare remittance advice payments and applying the amount withheld to the indebtedness. It applies to the recovery of funds for all Medicare Part A and Medicare Part B claims for which a demand letter is issued.”


MMA section 935 required that CMS change the way it recoups certain overpayments to all providers who submit fee-for-service claims to Medicare claims processing contractors. It also had to change how it pays interest to providers whose overpayment is reversed at subsequent administrative or judicial levels of appeal.


Before Congress enacted the MMS, Medicare could recover debts-even when providers decided to appeal an overpayment determination. That is no longer the case because the MMA limits the recoupment process during the first two stages of the appeal process, which are redetermination and reconsideration. Specifically, Medicare will not begin recoupment of overpayments (or will cease recoupment that has started) when it receives notice that the provider has requested either of these appeals. After the contractor determination, Medicare will begin the recoupment process.


To qualify for the above protections, providers must request their reconsiderations in a timely fashion. In its report slide presentation, CMS says the following: “The timeframe to request an appeal is longer than the timeframe for initiating recoupment. Consequently if a provider wants to avoid recoupment it must submit the appeal request within the (30 days from demand letter) shorter timeframe.” If the provider’s appeal request is not received and validated by the 30th day, recoupment will start on day 41.


The time period for the second level of appeal-the redetermination decision-also has a time limit. The provider must file the appeal request within 60 days from the receipt of the redetermination decision letter.


No changes have been made to appeal requirements and time frames nor to the number of days for appeals:


–     1st level appeal: 120 days;

–     2nd level appeal: 180 days;

–     3rd level appeal: 60 days;

–     4th level appeal: 60 days; and

–     5th level appeal: 60 days


In its slide presentation, CMS also emphasizes items that did not change as a result of MMA 935.




For more information on the above, go to the final rule in the Federal Register at:


For information on Section 935, go, CMS has posted “Slides for Section 935 Recoupment Presentation.”


About the Author


Barbara Vandergrift, RN, BSN, MA, is a senior healthcare consultant with Medical Learning, Inc. (MedLearn®), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

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