This
section pertains to
contractor financially
underwritten
funds.
The contractor shall follow
these procedures
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 shall 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 The contractor
shall seek overpayment refunds 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, the contractor shall seek recovery from
the beneficiary.
3.5 The overpayment
was for non-covered services or supplies.
3.6 The
beneficiary
did not receive the services or supplies
, 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, the contractor shall 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 contractor made erroneous
payment 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 contractor shall follow
the procedures described in this section.
6.0
Good Faith
Payment
6.1 With
prior approval from Defense Health Agency (DHA) Communications
, 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 TRICARE 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 TRICARE 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 make
reasonable efforts to collect payment from the ineligible patient
prior to requesting approval of a good faith payment. If
the contractor is unable to collect the debt after a reasonable
effort, the contractor shall submit a request for relief from the
debt providing documentation of the unsuccessful
effort 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 Government will
separately reimburse contractor’s costs.
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 they 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 contractor shall
ensure the file includes 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 they 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 contractor
shall ensure the file includes 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 patient.
6.6 A provider who erroneously
furnishes services 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
debt
from underwritten to non-underwritten by
submitting a
manual invoice to the Government for the underwritten debt owed
to the contractor by the ineligible patient. The contractor shall
ensure the supporting documentation includes the amount owed, by
TED record indicator (TRICARE Systems Manual (TSM), Chapter 2, Section 2.9). 6.7.1.1 The
Government will issue payment to the contractor, transferring the
debt from underwritten to non-underwritten.
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
patient. The contractor
shall pursue and report the non-underwritten debt in accordance
with
Section 4.
6.7.1.3 The
contractor shall deposit all collections of converted debt in their
assigned current FY non-underwritten bank account. The monthly deposits
of converted debt will create an out-of-balance on the bank reconciliation
report for all collections where underwritten credit TED record
submissions were sent to DHA prior to the underwritten debt being
converted to non-underwritten debt. The contractor shall separately
report on their monthly bank reconciliation report (in summary)
all collections for converted debt where a credit TED record was
sent prior to conversion. Details for reporting are identified in
DD Form 1423, Contract Data Requirements List (CDRL), located in
Section J of the applicable contract.
6.7.2 The contractor
shall, for claims that have not been paid
but
the contractor determine
s to
be eligible for a good faith payment,
pay to
the provider or beneficiary from the
current fiscal
year non-financially underwritten bank account
and
cite SPC =
G2 - Good Faith Payment.
If
the contractor pays from the non-financially
underwritten account,
the contractor shall initiate
and report any subsequent collection actions
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, the contractor shall not take action 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,
the contractor shall determine 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
contractor
shall take the following actions
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 contractor
shall recover the overpayment 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, the contractor shall recoup
it, even if it is 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
contractor
shall document recovery procedures
for
DHA review and approval
. The
contractor
shall ensure recovery actions
include
issuing a letter to the participating provider requesting payment
and establishing a system for offsetting from subsequent claims.
At the same time, the
contractor shall notify the beneficiary
, 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
shall advise
the beneficiary that no response is required and
shall refer the
beneficiary to the contractor’s customer service
for 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,
the
contractor demand letters
shall 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 shall 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, the contractor shall prepare
an Explanation Of Benefits (EOB) for each claim against which offset
was made and shall send a notice to
the overpaid party explaining the overpayment and the offset. If
the offset is against the provider, the contractor
shall advise the provider that
reimbursement for the claim against which the offset was made shall 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
14.1 The
contractor shall ensure refund requests
include
:
• A preaddressed
return envelope.
• 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.
• A clear
explanation of why the payment was not correct.
• The amount of the overpayment
and how it was calculated, and the amount of the correct payment,
if any.
• 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.
• 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.
• A notice of the possibility
of offset if the overpayment is not refunded.
• Instructions to
pay the refund by check
or money order made payable to the contractor.
• 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.
• An explanation
of rights to an administrative review and/or to appeal rights (see
paragraph 18.0).
14.2 The contractor
may assess administrative costs for debt collecting expenses. The
contractor shall keep DHA informed regarding procedures, policies
and changes to those procedures and policies. The contractor shall
obtain DHA approval of these procedures and policies.
15.0 Contractor Responses To Debtors
The
contractor shall not delay in responding to any communication
from debtors. The contractor shall respond within normal correspondence
timeliness standards, but in no case shall 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
requests
an installment refund plan
for financial hardship
reasons, the contractor shall exercise its judgment
in providing such a plan. The
contractor shall primarily
consider the size of the overpayment and the financial
status of the beneficiary
. If installment
payments are approved, the contractor shall enter into a repayment agreement
with the debtor. The
contractor may include interest
in the repayment agreement
. 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
contractor shall
treat the case
in accordance
with the instructions for handling delinquent installments (see
paragraph 17.0).
The contractor shall acknowledge each payment received in writing.
The
contractor shall indicate the amount
of the payment received, the amounts applied to interest, if applicable,
and principal and the current balance due
in the acknowledgment.
The contractor shall maintain an accounting record of such payments
which shall be subject to audit at all times.
16.2 The contractor
shall establish the size of the monthly installment to allow
for complete refund of the overpayment within 24 months. The
contractor shall allow monthly installments of less
than $50 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 contractor
shall carefully review the case. The contractor
shall assist the beneficiary to
the fullest reasonable extent by allowing reasonable terms.
16.3 If an offset flag was previously
established on an account, the contractor shall lift
it once a repayment agreement is established, unless
the debtor requests that the offset remain. The contractor shall
treat any offsets so collected as
an installment payment. The contractor shall process
and pay suspended claims 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, the contractor shall not
begin to accrue interest earlier than
30 days following notice of the overpayment,
if payment is made within the 30 days
following notice. The contractor shall not charge
interest rates that 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. The contractor
shall send a written delinquency notice 35
days after the established due date if an installment payment, or
any portion thereof, remains outstanding. If debtor
does not remit the delinquent amount within
30 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. The contractor
shall not refer a delinquent case to
collection agencies, or take other
similar action until at least two full
installment payments are past due. However, the contractor
may set and maintain an offset flag 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.
The contractor shall
identify and properly account for any funds recouped
by offset after a reconsideration has been requested
. The
appealing party
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. The contractor shall
carefully review 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. 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
contractor shall refer the debtor’s request
for review
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 contractor
shall advise the debtor that
full payment or other satisfactory arrangements for repayment must
be made within 30 days. A debtor’s request for an administrative
review of their 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.
The contractor
shall send only copies
of
documentation of the refund and all other evidence relating to the case
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, the contractor shall cease all
recoupment actions. If the debtor is
on offset, the contractor shall terminate the offset immediately.
Until the bankruptcy is resolved, the contractor shall
take no further recoupment action 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. The contractor shall forward all
bankruptcy notices to DHA.
23.0 Interest, Penalties And Administrative
Costs
23.1 The contractor
shall notify the debtor 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 contractor
shall automatically waive interest collection 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, the contractor shall
notify debtors in the
initial demand letter. The contractor shall not impose
a penalty exceeding 6%
per year, if to be charged. The contractor shall only apply
the penalty to the portion of the debt which is delinquent
for more than 90 days. The contractor may add administrative
costs, based on costs incurred in processing and handling the debt because
it became delinquent, 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 contractor
shall establish the rate of interest as
described above. The contractor shall apply each
installment payment to the accrued
interest first and then to the outstanding
principal balance.
23.4 The
contractor shall not charge interest on
previously accrued interest. When the debtor and the contractor
enter into an installment repayment agreement, the
contractor shall charge interest for the
period which began with the date of the initial demand letter and
ended on the due date of the first payment. The contractor
shall calculate interest at
the current rate, on that portion of the debt which was outstanding
30 days after the date of the initial demand letter. The
contractor shall apply interest to
the debtor’s account for any balance remaining after the due date
of the first installment payment. The contractor shall
apply payments to interest first and
then to the principal. Subsequently, the contractor
shall compute interest 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 contractor shall
set the new interest rate to reflect 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.