This section pertains to funds
for which the contractor financially underwrites. The contractor
shall follow these procedures when it 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
2.1 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.
2.2 The contractor
shall be responsible for collection if a claim is erroneously paid
for care delivered to an ineligible person.
3.0 PROVIDER OVERPAYMENTS
The contractor shall seek overpayment
refunds from the provider who received the incorrect payment in
the following situations:
3.1 The payment
was based on an amount in excess of that allowable.
3.2 The provider received and retained
duplicate TRICARE payments.
3.3 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.
3.4 The overpayment was for non-covered
services or supplies.
3.5 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.)
3.6 The services
or supplies were furnished by a provider not authorized under TRICARE.
3.7 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 TRICARE Reimbursement Manual (TRM),
Chapter
4).
3.8 The payment was made to the
wrong provider or to a nonparticipating provider.
3.8.1 The contractor
shall issue payment to the correct payee and initiate recoupment
action against the erroneously paid provider concurrently.
3.8.2 The contractor shall not postpone
issuing payment to the correct payee pending completion of the recoupment.
3.8.3 The contractor shall, if only
network providers are involved, follow the agreement and/or administrative procedures
for this situation.
3.9 The patient
was not eligible for TRICARE when the services were provided.
3.10 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
The contractor shall recoup
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.
4.5 The contractor shall immediately
issue payment to the non-network participating provider and concurrently
take recoupment action against the beneficiary.
4.6 Any other instance in which
the erroneous payment was made directly to the beneficiary.
4.7 The beneficiary who received
the TRICARE payment had OHI primary to TRICARE.
5.0 OVERPAID PARTY IS DECEASED
The contractor shall seek recoupment
of the overpayment from the estate of the deceased person under
state laws, if the contractor determines that liability for an overpayment
rests with a beneficiary or provider who is deceased. The procedures
described in this section shall be followed.
6.0 GOOD
FAITH PAYMENT
6.1 The contractor shall, with
prior approval from the DHA TRICARE Health Plan (THP), 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:
6.1.1 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
6.1.2 An ineligible patient/person
enrolls in Prime, claims are filed and denied as TRICARE ineligible,
and the contractor can document via evidence from Defense Enrollment
Eligibility Reporting System (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 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.
6.2.1 The contractor shall recheck
the current DEERS records to confirm that the person is not eligible
and include the documentation of the results, immediately prior
to submitting a request for approval of a good faith payment.
6.2.2 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 The contractor shall, if the
contractor made payment to the participating provider, advise the participating
provider and the patient of the patient’s ineligibility and then
follow recoupment procedures.
6.4 The contractor
shall forward the file to DHA THP for consideration of a good faith
payment and advise the participating provider of the action taken,
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 file shall include documentation
of all contact with the participating provider and patient.
6.5 The contractor shall deny the
claim based upon ineligibility of the patient, if the contractor
has not made payment to the participating provider.
6.6 The contractor shall, in cases
where the participating provider alleges that he or she relied on
the information on the patient’s ID card showing TRICARE eligibility,
forward the file to DHA THP and advise the participating provider
of the action taken. The file shall include documentation of all
contacts with the participating provider and patient.
6.7 The contractor shall terminate
collection from the provider, refund any monies collected from the provider
and initiate recoupment against the ineligible beneficiary, if DHA
THP notifies the contractor that a good faith payment has been granted.
6.8 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. DMDC is responsible for providing beneficiaries
with accurate and appropriate means of identification.
6.9 TRICARE Encounter Data (TED)
Related to Good Faith Payments
6.9.1 The contractor
shall transfer the payment or debt from underwritten to non-underwritten,
if a previously made underwritten payment is determined to be eligible
for a good faith payment, by taking the following actions:
6.9.1.1 Cancel the initial financially
underwritten TED record (if this is contractor debt then this action
should have already been done); and
6.9.1.2 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).
6.9.2 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.
6.9.3 The contractor
shall, upon receipt of the non-underwritten payment, establish a
non-underwritten debt in the amount of reimbursement in the name
of the ineligible beneficiary.
6.9.4 The contractor
shall pursue and report the non-underwritten debt in accordance
with
Section 3.
6.9.5 The contractor
shall report the monthly total of all payments to “Self”, under
the “Notes” section of the Bank Reconciliation Report. 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.
6.9.6 The contractor
shall pay claims that have not been paid and which are determined
to be eligible for a good faith payment, 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 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 The contractor shall attempt
to recover the overpayment from the primary plan following the contractor’s
coordination of benefits procedures, if the primary plan has not
made payment to the beneficiary or provider.
9.2 The contractor shall, if the
overpayment cannot be recovered from the primary plan, or if the
primary plan has made payment, recover the overpayment from the
party that received the erroneous payment from TRICARE.
10.0 THIRD PARTY RECOVERIES
The contractor shall take action
under the provisions of
Section 4, when
potential recovery from or actual payment by a liable third party
is discovered.
11.0 IDENTIFICATION OF OVERPAYMENTS
11.1 The contractor shall, for the
purpose of determining the amount of the overpayment in a particular
case, include all claims overpaid for the same reason/case/Episode
Of Care (EOC).
11.2 The contractor
shall establish its own threshold for economically feasible recoupments.
11.3 The contractor shall recoup
overpayments attributable to failure to properly assess the deductible,
even if less than a contractor’s established threshold.
11.4 The contractor shall not make
a beneficiary pay more than the minimum deductible, copay/cost-share amount,
or the amount of any erroneous payment that the beneficiary received
as a result of the contractor’s decision not to recoup when an overpayment
is reported to DHA.
12.0 OVERPAYMENTS RECOVERY
12.1 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.
12.2 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.
12.3 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
13.1 The contractor shall, if the
initial and follow up refund requests and the offset attempt, if
any, are unsuccessful for a period of 60 calendar days from the
date of the initial demand letter, 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.
13.2 The contractor shall, 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.
13.3 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’s refund requests
shall include a pre-addressed 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
14.1.1 A clear explanation of why
the payment was not correct.
14.1.2 The amount of the overpayment
and how it was calculated, and the amount of the correct payment,
if any.
14.1.3 A notice that the overpaid
party is required to refund the overpayment, or make acceptable arrangements
to make the refund, within 30 calendar days of the date of the request.
14.1.4 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 calendar 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.
14.2 A notice of the possibility
of offset if the overpayment is not refunded.
14.3 Instructions that the refund
shall be by check or money order made payable to the contractor.
14.4 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.
14.5 An explanation of rights to
an administrative review and/or to appeal rights (see
paragraph 18.0).
15.0 CONTRACTOR RESPONSES TO DEBTORS
15.1 The contractor shall respond
within normal correspondence timeliness standards, but in no case
shall there be a delay in excess of 30 calendar days from receipt
of any communication from the debtor.
15.2 There
shall be no undue time lag in responding to any communication from
debtors.
16.0 BENEFICIARY INSTALLMENT REFUNDS
16.1 The contractor shall exercise
its judgment in providing an installment refund plan, 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 size of the overpayment
and the financial status of the beneficiary are the primary considerations.
16.2 The contractor shall enter
into a repayment agreement with the debtor when the installment
payments are approved. The repayment agreement may include a provision
for payment of interest.
16.3 The contractor
may still collect installment payments if the debtor fails to sign
and return a written agreement. 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).
16.4 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.
16.5 The contractor shall maintain
an accounting record of such payments which shall be subject to
audit at all times.
16.6 The size
of the monthly installment shall normally allow for complete refund
of the overpayment within 24 months.
16.7 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 case
should be carefully reviewed by the contractor. The beneficiary
should be assisted to the fullest reasonable extent by allowing
reasonable terms.
16.8 The contractor
shall, if an offset flag was previously established on an account,
lift the offset flag 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.
16.9 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.
16.10 The contractor
shall not begin to accrue interest on overpayments 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
The contractor
shall notify the debtor of the delinquent amount and urge that the
account be brought current when the debtor fails to comply with
an established agreement.
17.1 The contractor
shall send a written delinquency notice 35 calendar days after the
established due date if an installment payment, or any portion thereof,
remains outstanding.
17.2 The contractor
shall take appropriate action under the laws of the appropriate
state when the delinquent amount is not remitted within 30 calendar
days of the initial delinquency.
17.3 The contractor
shall contact the debtor and attempt to resolve the delinquency
problem when the debtor fails to bring the account to a current
status, but, instead, remits the missed installment or a portion
thereof.
17.4 The contractor shall not refer
a delinquent case 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
18.1 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.
18.2 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.
18.3 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
19.1 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
or there is a reason of equity involved because the overpayment
was the result of an initial error by the contractor.
19.2 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 calendar days.
19.3 The contractor
shall take appropriate corrective action, after a case is established,
to stop or amend a recoupment when a contractor error is discovered.
20.0 ADMINISTRATIVE REVIEW OF INDEBTEDNESS
20.1 The contractor shall review
the documentation contained in the case file and any additional
information or documents submitted by the debtor, when a debtor
requests an administrative review of his or her indebtedness.
20.1.1 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.
20.1.2 The contractor, following the
review, 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 The contractor shall, based
upon the above instructions and if it is inappropriate to provide
the debtor a reconsideration, issue a response to the debtor’s request
for administrative review.
20.2.1 The contractor shall issue
a response that describes 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.
20.2.2 The contractor 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 calendar 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
21.1 The contractor shall not request
a refund until the fraud issue is resolved, if there is reason to
believe that the overpayment may have been caused by fraud.
21.2 The contractor shall retain
any amount voluntarily refunded pending resolution of the fraud
issue.
21.3 The contractor shall deposit
funds in the contractor’s account and an accounting record maintained which
is capable of audit.
21.4 The contractor
shall send copies, only, 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
22.1 The contractor
shall cease all recoupment actions when the contractor learns that
any debtor has filed a petition in a bankruptcy.
22.2 The contractor shall terminate
the offset immediately, if the debtor is on offset.
22.3 The contractor shall be bound
by the laws of the state and the court ruling and until the bankruptcy
is resolved, no further recoupment action shall occur. Bankruptcy
cases for debts which were paid with financially underwritten funds
are retained by the contractor for appropriate action.
22.4 The contractor shall forward
all bankruptcy notices to DHA Office of General Counsel (OGC).
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.
23.2 The contractor shall automatically
waive the collection of interest on the debt or any portion thereof which
is paid within 30 calendar days after the date of the initial demand
letter.
23.3 The contractor shall notify
debtors in the initial demand letter, if the contractor applies
penalties. 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 calendar 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.
23.4 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.
23.5 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.
23.5.1 Interest shall be calculated
at the current rate, on that portion of the debt which was outstanding
30 calendar 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.
23.5.2 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.
23.6 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 United States (US) Treasury.