This section pertains to funds for
which the contractor financially underwrites. These procedures shall be
followed when a contractor initiates recoupment of an overpayment
for underwritten funds. Also, see
Chapter 3, Section 3,
for instructions on reporting overpayments to the Defense Health
Agency (DHA) made with underwritten funds.
1.0 Causes
Of Overpayments
An overpayment adjustment
for recoupment action may be a result of any one or more of a number
of circumstances, such as issuance of a duplicate payment, correction
of a coding error, or erroneous calculation of the allowable amount.
2.0 Determination
Of Liability For Overpayment
The general
rule for determining liability for overpayments is that the person
who received the erroneous payment is responsible to return such
payment. This provision may be modified by applicable state laws.
In the case of care delivered by a contractor network provider to
a person not eligible for care under TRICARE, the provider shall
not submit a claim for such care and will collect payment directly
from the patient. If a claim is erroneously paid for care delivered
to an ineligible person then the contractor shall be responsible
for collection.
3.0 Provider
Overpayments
3.1 Overpayment refunds shall be sought from the
provider who received the incorrect payment in the following situations:
3.2 The payment
was based on an amount in excess of that allowable.
3.3 The provider
received and retained duplicate TRICARE payments.
3.4 The overpayment
was due to a mathematical or clerical error; e.g., an error in calculation
of overlapping or duplicate bills. This does not include a failure
to properly assess the deductible. Where a provider has been incorrectly
paid a deductible, recovery shall be sought from the beneficiary.
3.5 The overpayment
was for noncovered services or supplies.
3.6 The services or supplies were
not received by the beneficiary, or there is no documentation to substantiate
that the provider performed the services claimed. (See
Chapter 13, if fraud is suspected.)
3.7 The services
or supplies were furnished by a provider not authorized under TRICARE.
3.8 The TRICARE
payment was made to the participating provider and a primary health
insurance plan also made a benefit payment to the provider or beneficiary
for the same services or supplies, and the combined payments exceed
the lower of the amount remaining after the double coverage plan paid
its benefits or the amount TRICARE would have paid as primary payer
(see the TRM,
Chapter 4).
3.9 The payment
was made to the wrong provider or to a nonparticipating provider.
In such cases, the contractor shall issue payment to the correct
payee and initiate recoupment action against the erroneously paid
provider concurrently. The contractor shall not postpone
issuing payment to the correct payee pending completion of the recoupment.
If only network providers are involved, follow the agreement and/or
administrative procedures for this situation.
3.10 The patient
was not eligible for TRICARE when the services were provided.
3.11 The patient
had Other Health Insurance (OHI) primary to TRICARE and the contractor’s
efforts to recover the overpayment through coordination of benefits
with the OHI were not successful in whole or in part (see
paragraph 9.0).
4.0 Beneficiary
Liable
Recoupment should be sought from the
beneficiary in the following situations:
4.1 The overpayment was caused
by incorrect application of the deductible, copayment, or other cost-share.
4.2 The patient
was not an eligible beneficiary at the time services were provided
and the payment was made to a participating provider for whom a
good faith payment has been authorized by DHA (see
paragraph 6.0).
4.3 The TRICARE
payment was made to the beneficiary and his or her primary health
insurance plan made a benefit payment for the same services or supplies.
4.4 The TRICARE
payment was made to the beneficiary instead of the non-network participating provider.
The contractor shall immediately issue payment to the non-network
participating provider and concurrently take recoupment action against
the beneficiary.
4.5 Any other instance in which
the erroneous payment was made directly to the beneficiary.
4.6 The beneficiary
who received the TRICARE payment had OHI primary to TRICARE.
5.0 Overpaid
Party Is Deceased
If the contractor determines
that liability for an overpayment rests with a beneficiary or provider
who is deceased, the contractor shall seek recoupment of the overpayment
from the estate of the deceased person under state laws. The procedures
described in this section shall be followed.
6.0
Good
Faith Payment
6.1 With prior approval from Defense Health Agency
(DHA) Communications in Falls Church, Virginia, a contractor shall
make a good faith payment to a participating provider, or allow
a previous payment to stand, for care provided to a patient, but
only in the following situations:
• An ineligible patient
holds an ID card showing TRICARE eligibility and the provider exercised
reasonable care in accepting the apparently valid ID card as evidence
of eligibility; or
• An
ineligible patient/person enrolls in Prime, claims are filed and
denied as TRICARE ineligible, and the contractor can document via
evidence from DEERS that the individual had in fact been shown on
DEERS as eligible on the date of Prime enrollment and for the period
covering the dates of medical care.
6.2 Whether
the claim is initially paid or denied, the provider shall be expected
to make reasonable efforts to collect payment from the ineligible
patient prior to requesting approval of a good faith payment. Documentation
of the unsuccessful effort is to be in a file submitted to the Defense
Health Agency, 7700 Arlington Blvd., Suite 5101, Falls Church, Virginia,
22042-5101, Attn: Good Faith Payment Requests, with the request.
Immediately prior to submitting a request for approval of a good
faith payment, the contractor shall recheck the current DEERS records
to confirm that the person is not eligible and include the documentation
of the results. The contractor shall not be financially responsible
for making good faith payments. The contractor’s costs will be separately
reimbursed by the Government.
6.3 If the contractor made payment
to the participating provider, the contractor shall advise the participating
provider and the patient of the patient’s ineligibility and then
follow recoupment procedures. If, during the recoupment process,
the participating provider alleges that he or she relied on the
information on the patient’s ID card showing TRICARE eligibility,
the contractor shall forward the file to DHA Communications for
consideration of a good faith payment and advise the participating provider
of the action taken. The file shall include documentation of all
contact with the participating provider and patient.
6.4 If the
contractor has not made payment to the participating provider, the
contractor shall deny the claim based upon ineligibility of the
patient. If the participating provider alleges that he/she/it relied
on the information on the patient’s ID card showing TRICARE eligibility,
the contractor shall forward the file to DHA Communications and
advise the participating provider of the action taken. The file
shall include documentation of all contacts with the participating
provider and patient.
6.5 If DHA Communications notifies
the contractor that a good faith payment has been granted, the contractor
shall terminate collection from the provider, refund any monies
collected from the provider and initiate recoupment against the
ineligible beneficiary.
6.6 A provider who erroneously
furnishes services and/or supplies to an ineligible patient as a result
of careless identification procedures is not entitled to a good
faith payment. Defense Manpower Data Center (DMDC) is responsible
for providing beneficiaries with accurate and appropriate means
of identification.
6.7
TRICARE
Encounter Data (TED) Related to Good Faith Payments
6.7.1 If
a previously made underwritten payment is determined to be eligible
for a good faith payment, the contractor shall transfer the payment
or debt from underwritten to non-underwritten by taking the following
actions:
• Cancel the initial
financially underwritten TED record (if this is contractor debt
then this action should have already been done); and
• Submit
a new non-financially underwritten TED record with the following
values:
• Payee = Self
• Cite
Special Processing Code (SPC) =
G1 - Good Faith Payment
Debt Transfer (TRICARE Systems Manual (TSM),
Chapter 2, Section 2.8, Record Locator 1-
185 or
2-
305).
6.7.1.1 Upon receiving authority to release the non-financially
underwritten payments from the DHA, Contract Resource Management
(CRM) Budget Officer, the contractor is authorized to issue a payment
to “Self” from the non-financially underwritten bank account for
all TED records citing SPC = G1. The cancellation of
the financially underwritten TED record will result in the recoupment
of funds from the contractor by DHA, CRM, and the draw of funds
from the non-underwritten bank account by the contractor will reimburse
the contractor and transfer ownership of the debt to the government.
6.7.1.2 Upon receipt of the non-underwritten payment
the contractor shall establish a non-underwritten debt in the amount
of reimbursement in the name of the ineligible beneficiary. The contractor
shall pursue and report the non-underwritten debt in accordance
with
Section 4.
6.7.1.3 Under the “Notes” section of the Bank Reconciliation
Report the contractor shall report the monthly total of all payments
to “Self.” The amount reported on the Bank Reconciliation Report
shall equal the total of all the TED records (Amount Paid Government
Contractor, TSM,
Chapter 2, Section 2.4, Record Locator 1-140
or 2-205) received for the month citing SPC =
G1 and
approved for payment.
6.7.2 Claims that have not been
paid which are determined to be eligible for a good faith payment,
shall be paid to the provider or beneficiary from the non-financially
underwritten bank account citing SPC =
G2 - Good Faith
Payment. If paid from the non-financially underwritten account, any
subsequent collection actions shall be initiated and reported per
Section 4.
7.0
Overpayments
Resulting From Alleged Misinformation
An
allegation by a patient or provider that information obtained from
a Beneficiary Counseling and Assistance Coordinator (BCAC), contractor,
or other party resulted in the overpayment does not alter the liability
for the overpayment, nor is it grounds for termination of recoupment
activity.
8.0 Denial
Of Benefits Previously Provided
In those
instances in which clarification, interpretation or a change in
the TRICARE Regulation would result in denial of services or supplies
previously covered, no action should be taken to recover payments
expended for those benefits paid prior to the date of such clarification
or change, unless specifically directed by DHA.
9.0
Double
Coverage Situations
A “Primary Plan,” under
TRICARE Law and Regulation is any OHI coverage the patient has, except
Medicaid (Title XIX) or a supplement plan which is specifically
designed to pay only TRICARE deductibles, coinsurance and other
cost-shares. (See the TRICARE Reimbursement Manual (TRM),
Chapter 4.) Prior to payment of any claim
for services or supplies rendered to any TRICARE beneficiary, regardless
of eligibility status, it must be determined whether OHI exists.
If the reason for the overpayment is that another coverage plan
primary to TRICARE was not considered in whole or in part in the
coordination of benefits, then the following actions are required
to recover the overpayment:
9.1 If the primary plan has not
made payment to the beneficiary or provider, the contractor shall attempt
to recover the overpayment from the primary plan following the contractor’s
coordination of benefits procedures.
9.2 If the overpayment cannot
be recovered from the primary plan, or if the primary plan has made payment,
the overpayment will be recovered from the party that received the
erroneous payment from TRICARE.
10.0 Third
Party Recoveries
When potential recovery
from or actual payment by a liable third party is discovered, the contractor
shall take action under the provisions of
Section 5.
11.0
Identification
of Overpayments
For the purpose of determining
the amount of the overpayment in a particular case, the contractor
shall include all claims overpaid for the same reason/case/Episode
Of Care (EOC). The contractor shall establish its own threshold
for economically feasible recoupments. However, if the overpayment
is attributable to failure to properly assess the deductible, it
shall be recouped, even if less than a contractor’s established
threshold. A contractor’s decision not to recoup when an overpayment is
reported to DHA shall never result in the beneficiary paying more
than the minimum deductible, copay/cost-share amount, or the amount
of any erroneous payment that the beneficiary received.
12.0 Overpayments
Recovery
The contractor shall take recovery
actions in accordance with applicable laws of the states in the
jurisdiction. The procedures for recovery shall be documented and
subject to review and approval by DHA. The recovery actions shall
include issuing a letter to the participating provider requesting payment
and establishing a system for offsetting from subsequent claims.
At the same time, the beneficiary shall be notified, in writing,
that a recoupment action has been initiated against the rendering
provider. This letter shall identify the beneficiary specific claims
included in the recoupment action. The letter should advise the
beneficiary that no response is required and refer the beneficiary
to the contractor’s customer service if they have further questions.
The contractor has discretion in developing its own demand letters
as long as it includes the information required by
paragraph 14.0 (see
Addendum A, Figure 10.A-1). Because the recovery
actions are for the collection of “financially underwritten” funds,
demand letters should not reference the Federal Claims Collection
Act (FCCA) as authority for collection nor should they advise debtors
that delinquent debts may be collected by administrative offset
from other federal monies owed, or referred to the Department of
Justice (DOJ) for enforced collection or offset from tax refunds.
13.0 Offset
Procedures
If the initial and follow-up refund
requests and the offset attempt, if any, are unsuccessful for a period
of 60 days from the date of the initial demand letter, the contractor
should leave an offset flag or similar control on the file of the
overpaid party (including a provider) for the term of the TRICARE contract
for potential future offset. If at any time all or part of an overpayment
is offset, prepare an Explanation Of Benefits (EOB) for each claim
against which offset was made and send a notice to the overpaid
party explaining the overpayment and the offset. If the offset is
against the provider, the provider shall be advised that reimbursement
for the claim against which the offset was made may not be sought
from the patient on whose behalf the services were provided. Any
requests for offset from other Government agencies and orders for
garnishment issued by the courts shall be handled under the laws
of the state(s).
14.0
Refund
Requests
Refund requests shall include a
preaddressed return envelope and the following:
• Name
and Address of the Beneficiary and Provider.
• Last four digits
of sponsor’s Social Security Number (SSN).
• Internal Control
Number (ICN).
• Date(s) and Type(s)
of Service.
• Principal
Amount of Debt.
• Date(s) of Check(s).
• Name of Payee.
14.1 A clear
explanation of why the payment was not correct.
14.2 The amount
of the overpayment and how it was calculated, and the amount of
the correct payment, if any.
14.3 A notice that the overpaid
party is required to refund the overpayment, or make acceptable arrangements
to make the refund, within 30 days of the date of the request.
14.4 A notice
that:
• Interest
shall be assessed at the rate of ___ percent. (Enter the rate
which would be collected under the Federal Claims Collection Act
or the rate allowed by applicable state law, whichever is lower.)
Interest shall begin to accrue from the date of this letter.
• Accrued interest will
be waived if payment is received within 30 days.
• Administrative costs
may also be assessed for expenses in collecting the debt. DHA must
be informed of the procedures, policies, and any charges, which
are subject to DHA approval.
14.5 A notice
of the possibility of offset if the overpayment is not refunded.
14.6 Instructions
that the refund shall be by check or money order made payable to
the contractor.
14.7 A notice, when appropriate,
that unless a refund is made, or arrangements for a refund are made,
the case may be referred to a credit reporting agency which could
result in the assessment of added administrative costs, penalties
and interest.
14.8 An explanation of rights to an administrative
review and/or to appeal rights (see
paragraph 18.0).
15.0 Contractor
Responses To Debtors
There shall be no undue
time lag in responding to any communication from debtors. The contractor
shall respond within normal correspondence timeliness standards,
but in no case shall there be a delay in excess of 30 days from
receipt of any communication from the debtor.
16.0 Beneficiary
Installment Refunds
16.1 If, in responding to the request for refund,
the beneficiary alleges that immediate repayment of the overpayment
in full would be a financial hardship and requests an installment
refund plan, the contractor shall exercise its judgment in providing
such a plan. The size of the overpayment and the financial status
of the beneficiary are the primary considerations. If installment
payments are approved, the contractor shall enter into a repayment
agreement with the debtor. The repayment agreement may include a
provision for payment of interest. If the debtor fails to sign and
return a written agreement, the contractor may still collect installment
payments. However, if the debtor fails to remit the agreed-upon
monthly installments, the case shall be treated in accordance with
the instructions for handling delinquent installments (see
paragraph 17.0).
The contractor shall acknowledge each payment received in writing.
The acknowledgment shall indicate the amount of the payment received,
the amounts applied to interest, if applicable, and principal and
the current balance due. The contractor shall maintain an accounting
record of such payments which shall be subject to audit at all times.
16.2 The size
of the monthly installment shall normally allow for complete refund
of the overpayment within 24 months. Monthly installments of less
than $50 shall be allowed by the contractor if evidence is presented
that financial hardships or other justifiable reasons exist. If
it is alleged by the beneficiary that monthly installments cannot
be made to complete the refund within 24 months, the case should
be carefully reviewed by the contractor. The beneficiary should
be assisted to the fullest reasonable extent by allowing reasonable
terms.
16.3 If an offset flag was previously established
on an account, it shall be lifted once a repayment agreement is
established, unless the debtor requests that the offset remain.
Any offsets so collected shall be treated as an installment payment.
Suspended claims shall be processed and paid normally.
16.4 The contractor
shall make the collection of overpayments under conditions which
will not create severe hardship on the beneficiary/sponsor debtor.
Policies related to such collections shall be subject to DHA approval
and shall comply with all applicable state and local laws governing
collections and promissory notes. If the contractor elects to charge
interest on overpayments, it shall not begin to accrue earlier than
30 calendar days following notice of the overpayment, if payment
is made within the 30 calendar days following notice. Interest rates
charged shall not exceed the rate which would be collected under
the FCCA or the rate allowed by applicable state law, whichever
is the lower.
17.0
Installment
Delinquencies
If the debtor fails to comply
with an established repayment agreement, the contractor shall notify
the debtor of the delinquent amount and urge that the account be
brought current. A written delinquency notice shall be sent 35 days
after the established due date if an installment payment, or any
portion thereof, remains outstanding. If the delinquent amount is
not remitted within 30 calendar days of the initial delinquency
notice, the contractor shall take appropriate action under the laws
of the appropriate state. Should the debtor fail to bring the account
to a current status, but, instead, remit the missed installment
or a portion thereof, the contractor shall contact the debtor and
attempt to resolve the delinquency problem. A delinquent case should
not be referred to collection agencies, or other similar action
taken until at least two full installment payments are past due.
An offset flag may, however, be set and maintained on all delinquent
installment cases.
18.0
Recoupment
Action And The Appeals Process
The determination
that an overpayment was made is not, in itself, an appealable issue.
If a service or supply which is not a TRICARE benefit was paid in
error, the reversal of the payment decision constitutes an initial
adverse determination. The overpaid party may appeal if an appealable
issue exists. Such appeals are subject to the requirements and time
limits outlined in
Chapter 12. Any funds recouped by offset after
a reconsideration has been requested are to be identified and properly accounted.
The appealing party is to be notified that the recoupment of the
overpayment shall continue by offset. The contractor shall not terminate
offset action because of an appeal. When a requirement to recoup
TRICARE funds is identified in a Formal Review Decision or a Final
Decision resulting from a hearing, the case will be forwarded to
the contractor for possible recoupment action in accordance with
this section.
19.0 Requests
For Relief Of Indebtedness
The contractor
may compromise, suspend, or terminate collection actions on claims
arising out of overpayments to beneficiaries if it is evident that
severe hardship will be imposed and/or there is a reason of equity
involved because the overpayment was the result of an initial error
by the contractor. All requests from debtors for relief from all
or a portion of their indebtedness, including requests for relief
from the assessment of interest, penalties, and administrative charges
shall be carefully reviewed. This does not apply to automatic waiver
of interest on accounts paid within the first 30 days. After a case
is established, the contractor shall take appropriate corrective
action to stop or amend a recoupment when a contractor error is
discovered.
20.0 Administrative
Review Of Indebtedness
20.1 If a debtor requests an administrative review
of his indebtedness, the contractor shall review the documentation
contained in the case file and any additional information or documents
submitted by the debtor. The contractor review shall be conducted
by someone in a position of higher authority within the contractor
organization than the individual who originated the recoupment action. Following
the review, the contractor shall respond to the debtor. When the
debtor questions a contractor’s determination that the care is not
a covered benefit, the debtor’s request for review will be referred
to the appropriate unit within the contractor’s organization for
issuance of a reconsideration pursuant to
32 CFR 199.10 unless the issue is not appealable
under the provisions of
Chapter 12,
the issue has been resolved through or is currently pending in the
appeal system, or the recoupment action was initiated for one of
the following reasons:
• TRICARE payment was
issued without regard to OHI, or the TRICARE liability, after taking into
consideration payments made by OHI, was inaccurately calculated.
• The action was initiated
to recoup a duplicate payment.
• The action was initiated
because an error was made in the original determination that a claim
was a participating or a nonparticipating claim.
• The action was initiated
because the payee was incorrect.
20.2 Based upon
the above instructions, if it is inappropriate to provide the debtor
a reconsideration, the contractor shall issue a response to the
debtor’s request for administrative review. The contractor’s response
shall describe the documentation reviewed, including any submitted
by the debtor, and explain the reviewing party’s rationale for the
decision to pursue or terminate the recoupment action. The response
shall explain that further administrative appeal is not available.
If the review results in a decision to recoup the overpayment, the
debtor will be advised that full payment or other satisfactory arrangements
for repayment must be made within 30 days. A debtor’s request for
an administrative review of his or her indebtedness does not result
in suspension of the accrual of interest from the date of the initial
demand letter.
21.0 Suspicion
Of Fraud
If there is reason to believe that
the overpayment may have been caused by fraud, no request for refund
shall be made until the fraud issue is resolved. However, the contractor
shall retain any amount voluntarily refunded pending resolution
of the fraud issue. These funds shall be deposited in the contractor’s
account and an accounting record maintained which is capable of
audit. Copies, only, of documentation of the refund and all other
evidence relating to the case shall be sent to the DHA Program Integrity
Office (PI). Any recoupment action shall be taken in accordance
with
Chapter 13.
22.0
Bankruptcy
When the contractor learns that any debtor
has filed a petition in a bankruptcy, all recoupment actions shall
cease. If the debtor is on offset, the contractor shall terminate
the offset immediately. Until the bankruptcy is resolved, no further
recoupment action shall occur and the contractor shall be bound by
the laws of the state and the court ruling. Bankruptcy cases for
debts which were paid with financially underwritten funds are retained
by the contractor for appropriate action. All bankruptcy notices
shall be forwarded to DHA.
23.0 Interest,
Penalties And Administrative Costs
23.1 The debtor shall be notified
in the initial demand letter that interest, if required by established corporate
policy, and allowed by state law and the TRICARE contract, will
accrue from the date of that letter. However, the collection of
interest shall be automatically waived on the debt or any portion thereof
which is paid within 30 days after the date of the initial demand
letter.
23.2 If the contractor applies penalties, debtors
shall be notified in the initial demand letter. A penalty shall
not exceed 6% per year, if to be charged. It will only be applied
on any portion of the debt which is delinquent for more than 90
days. Administrative costs, based on costs incurred in processing and
handling the debt because it became delinquent, may be added to
the amount of the indebtedness.
23.3 The contractor shall collect
interest only when the debtor enters into an installment repayment agreement
as described in above. The rate of interest shall be the rate established
as described above. Each installment payment shall be applied first
to the accrued interest and then to the outstanding principal balance.
23.4 Interest
will not be charged on previously accrued interest. When the debtor
and the contractor enter into an installment repayment agreement,
interest will be charged for the period which began with the date
of the initial demand letter and ended on the due date of the first
payment. Interest shall be calculated at the current rate, on that
portion of the debt which was outstanding 30 days after the date
of the initial demand letter. Interest will be applied to the debtor’s
account for any balance remaining after the due date of the first
installment payment. The payments shall be first applied to interest
and then to principal. Subsequently, interest shall be computed
daily on the outstanding principal balance, at the rate current
when the debtor entered into a repayment agreement, or at the rate
specified in the note, if the debtor signs a promissory note. The
note rate shall be that which is current at the time the note is
signed.
23.5 The rate of interest shall remain fixed unless
a debtor defaults on a repayment agreement and seeks to enter into
a new agreement. The new interest rate shall be set reflecting the
current value of funds, and in accordance with the contractor’s
rate and/or state laws at the time the new agreement is executed.
The current value of funds is the value of funds to the U.S. Treasury.