CMS Issues Final Rule on Recoupment – Impacts RACs

Nancy — Wed, 23 Sep 2009 12:11:55 +0000

CMS Issued New “Final” Recouping Regulation, at 42 CFR 405.370, 405.378, 405.379. The effect of this rule is to shorten providers decision making time in making appeals on overpayment demands. Recouping involves a Medicare Contractor holding back reimbursement to offset monies that a provider is deemed to owe to the Medicare Program.

According to CMS recoupment means “the recovery by Medicare of any outstanding Medicare debt by reducing present or future Medicare payments and applying the amount withheld to the indebtedness.” 42 CFR 405.370

Prior to the Medicare Modernization Act of (2003), CMS could “recoup” even while a provider appealed a claim determination. Under the MMA there is a prohibitition from CMS recouping while a claim is on appeal through a Qualified Independent Contractor (QIC) or second level of appeal. (Redetermination). Under the new regulation CMS will allow Medicare Contractors to recoup if the provider does not file a 1st level appeal within 41 days of the overpayment demand. CMS will also allow Medicare Contractors to recoup after the first level of appeal if a second level appeal has not been requested within 60 days after the 1st level decision.

While the RACs do not directly recoup your monies (that is done your MAC, FI or carrier), the new regulation lists Recovery Audit Contractors under definitions, in an obvious move to ensure that recoupments arising from RAC activities are subject to the regulation.

As you can see, this new regulation Effectively shortens decision time for making appeals on all contractor overpayment demands. The regulation was published in the Federal Register on September 16, 2009, and is effective November 16, 2009.

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CMS Issues Final Rule on Recoupment – Impacts RACs