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.