Military Health System

3.1  The provider furnished erroneous information or failed to disclose facts that the provider knew or should have known were relevant to payment of the benefit. (Refer to Chapter 13.)

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 provider turned a duplicate TRICARE payment over to the beneficiary.

3.5  The overpayment was due to a mathematical or clerical error; e.g., an error in calculation of overlapping or duplicate bills. Mathematical error does not include a failure to properly assess the deductible. Where a provider has been incorrectly paid a deductible, the provider shall be deemed to be without fault and any required recovery shall be sought from the beneficiary.

3.6  The overpayment was for non-covered services, supplies, or pharmaceutical agents.

3.7  The services, supplies, or pharmaceutical agents were not received by the beneficiary or there is no documentation to substantiate that the provider performed the services or provided the pharmaceutical agents claimed. (See Chapter 13, if fraud is suspected.)

3.8  The services, supplies, or pharmaceutical agents were furnished by an unauthorized provider.

3.9  The TRICARE payment was made to the participating provider and a primary health insurance or pharmacy plan also made a 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 has paid its benefits or the amount TRICARE would have paid as primary payor. See TRICARE Reimbursement Manual (TRM), Chapter 4.

3.10  The payment was made to the wrong provider or a nonparticipating provider.

3.11  The patient was not eligible at the time the services were provided. Except when payment was made to a retail network pharmacy based on erroneous eligibility data provided by the Government from Defense Enrollment Eligibility Reporting System (DEERS), the pharmacy may retain the payment as a good faith payment.

3.12  The patient had OHI or pharmaceutical coverage primary to TRICARE.

4.1  The overpayment was caused by incorrect application of the deductible or 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 under paragraph 6.0. When payment was made to a retail network pharmacy based on erroneous eligibility data provided by the Government from DEERS, the pharmacy may retain the payment as a good faith payment.

4.3  In addition, when the TRICARE Overseas Program (TOP) contractor creates an authorization for a TOP provider based upon erroneous DEERS data and improperly pays a TOP provider, the TOP provider may retain the payment as a good faith payment.

4.4  The beneficiary who received TRICARE payment had OHI or pharmacy coverage primary to TRICARE.

4.5  The TRICARE payment was made to the beneficiary instead of the participating provider.

4.6  The contractor shall immediately issue payment to the participating provider and concurrently take recoupment action against the beneficiary.

4.7  Any other instance where the erroneous payment was made directly to the beneficiary.

5.1  The contractor shall seek recoupment of the overpayment from the estate of the deceased person, if the contractor determines that liability for an overpayment rests with the beneficiary or provider who is deceased.

5.2  The contractor shall follow procedures described in this Section.

6.1  Participating providers who exercise reasonable care and precaution in identifying persons claiming to be eligible TRICARE beneficiaries and furnish otherwise-covered services and supplies to such persons in good faith, may be granted a good faith payment, although the person receiving the services and supplies is subsequently determined to be ineligible for benefits. In order to meet the requirements for a good faith payment, the participating provider must have:

6.2  In order to qualify for a good faith payment, the provider must submit documentation to substantiate that he or she has met BOTH requirements. The usual evidence that a provider has exercised reasonable care and precaution in identifying the patient as TRICARE-eligible is a copy of the patient’s ID card which indicates that he or she was eligible for civilian medical care at the time services were provided. Generally, the provider must have obtained the copy of the ID card when the services were provided. If the provider did not obtain a copy of the ID card, he or she shall submit an explanation of why a copy was not obtained and the reason(s) for his or her determination that the patient was eligible for TRICARE benefits.

6.3  The documentation required to establish that a provider has made reasonable efforts to collect will vary, depending upon the facts of each case. Such documentation may include, but is not limited to, invoices or demand letters sent to the patient and memoranda of telephone calls to the patient demanding payment. If the TRICARE beneficiary has moved and left no forwarding address, the provider shall supply copies of returned letters or memoranda of unsuccessful attempts to reach the patient by telephone.

6.4  The contractor is not authorized to determine whether a provider exercised “reasonable care” which may qualify the provider for a good faith payment; nor are they authorized to seek, invite, or encourage good faith payment requests from providers.

6.5  The contractor shall advise the provider of the procedures for requesting a good faith payment, if a provider initiates an inquiry regarding denial of a claim due to the patient’s ineligibility, or a recoupment action in which the patient’s eligibility is the issue.

6.6  The contractor shall, if the contractor has NOT paid the participating provider (i.e., the claim is denied), advise the provider and the patient by Explanation Of Benefits (EOB) that the claim has been denied due to the patient’s ineligibility so that the provider may attempt collection from the patient in a timely manner. Occasionally, the patient may need only to update his DEERS record, so that the denied claim may be processed and paid. Upon notification of the patient’s ineligibility, the provider shall attempt collection from the patient.

6.7  The contractor shall notify the provider that his request has been referred to DHA THP.

6.8  The contractor shall, if an assigned claim was paid before the contractor discovered the patient’s ineligibility, initiate recoupment action against the participating provider, and concurrently, advise the patient of his or her ineligibility for TRICARE benefits and his or her liability for payment to the provider. If the provider alleges that he or she exercised reasonable care and precaution in identifying the patient as TRICARE-eligible, and requests a good faith payment, the file shall be referred to DHA THP, for consideration of the request. The provider is required to supply all of the documentation outlined in paragraph 6.2.

9.1  The contractor shall, if the primary plan has not made payment to the beneficiary or provider, attempt to recover the overpayment from the primary plan following the contractor’s coordination of benefits procedures.

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.

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 conduct all research required to establish the existence of a debt and the initial demand letter shall be issued within 30 calendar days from the date that a potential recoupment action is identified or notification is received that an erroneous payment has been made. (See sample letters Addendum A, Figure 10.A-4 and Figure 10.A-5.)

11.3  The contractor shall ensure that all demand letters are sent to the correct debtor at the most current address on file, i.e., enrollment file, provider file, claims history, etc. When letters are returned by the post office the forwarding address shall be obtained and letters that are returned shall be reissued to the new address.

11.4  The contractor may request a waiver to the claim adjustment requirements on a case by case basis for any recoupment case involving a large number of claims having low dollar overpayments. Such requests are to be sent to the Chief, Claims Collection Section (CCS), DHA.

11.5  The pharmacy contractor shall issue the initial demand letter to a network pharmacy within 30 calendar days of the end of the 60 calendar day period referenced in Section 1, paragraph 1.0, if collection pursuant to the network agreement is not successful.

12.1  The contractor shall, when it erroneously calculates the deductible and the error is discovered within the same fiscal year as the one in which the error was made, correct the error by properly assessing the deductible on the next claim or claims. No recoupment notice needs to be given if the deductible can be collected within the fiscal year in which the error was made.

12.2  The contractor shall, if the deductible cannot be collected in the same fiscal year in which the error was made, initiate recoupment action in accordance with this Chapter, regardless of the amount owed by the beneficiary, as a result of the erroneous calculation of the deductible.

13.1  The contractor shall flag the record of the overpaid party for possible future offset action and suspend payment on a sufficient number of current claims to satisfy the amount of the debt, when an initial request for refund is sent.

13.2  The contractor shall process such claims to the point of payment to expedite finalizing when the refund payment is received. If the debtor on the claim in question is other than a participating provider, a system flag shall be set for future offset action.

13.3  The contractor shall, if the refund request is unsuccessful after 30 calendar days from the date of the request, offset against any claims suspended during the 30 calendar days as required in this section.

14.1  The contractor shall send a written request for refund to the overpaid party within 30 calendar days of identifying an overpayment.

14.2  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’s specific claims included in the recoupment action. The letter shall advise the beneficiary that no response is required and refer the beneficiary to the contractor’s customer service function if they have further questions. (See sample letter, Addendum A, Figure 10.A-7.) No offset flag is set at this point in the recoupment process (see paragraphs 16.2.3 through 16.2.6).

14.3  The pharmacy contractor is not required to issue the notice (Addendum A, Figure 10.A-7) to the beneficiary unless directed by DHA.

17.1  The contractor shall forward all Notices of Bankruptcy, and letters from petitioners, attorneys for petitioners, and trustees of the bankrupt estate to DHA OGC within three business days of receipt. Each Notice of Bankruptcy forwarded to DHA shall include: the debtor’s full name; the debtor’s full and complete Social Security Number (SSN)/Tax Identification Number (TIN); the name of the bankruptcy court wherein bankruptcy was filed; and the bankruptcy case number. (See sample coversheet, Addendum A, Figure 10.A-30).

17.2  The contractor shall verify that the only bankruptcy cases forwarded to DHA are for debts which were paid with non-financially underwritten funds.

17.3  The contractor shall take the additional following actions:

17.4  The contractor shall, if there is no ongoing recoupment case against the petitioner in bankruptcy and the petitioner is a provider, ascertain whether any assigned claims are pending for the petitioner provider.

17.5  The contractor shall identify individuals and providers who have, during the term of their DHA contract, filed a Petition in Bankruptcy, regardless of whether the petitioner is or has been indebted to TRICARE.

17.6  The contractor shall initiate no recoupment action, either on their own initiative or upon the request of another DHA component, against a debtor who has filed a petition in bankruptcy, without prior approval by the DHA OGC.

18.1  When insurance companies which have been primary to TRICARE are filing petitions in bankruptcy or have been placed in receivership refuse to honor claims, this situation is different from that in which an employer or labor union stops paying premiums to an insurance company. In the latter case, insurance coverage ceases for the employee or member of the labor union when premiums have not been paid; the TRICARE claims should be processed in the same manner as any other claim on which the beneficiary has no OHI. Although the TRICARE beneficiary who was formerly covered by the bankrupt insurer may have a claim against the bankrupt estate, the beneficiary may have to wait years for distribution of assets, if any. Since TRICARE is, by federal statute and regulation, secondary to all health benefit and insurance plans (except Medicaid), extraordinary measures must be taken to allow TRICARE to pay claims as primary payer pending any distribution of assets from the bankrupt estate.

18.2  The contractor shall have documentation to prove that a claim was filed with the primary insurer or a Proof of Claim was filed with the bankruptcy court. This information may be requested using Addendum A, Figure 10.A-26.

18.3  The contractor shall, when a TRICARE beneficiary or participating provider provides evidence that the beneficiary’s primary insurer is in bankruptcy and is no longer honoring claims, issue payment on a claim-by-claim basis, after the following steps have been taken:

19.1  The contractor shall include the documentation listed below for cases referred to DHA OGC, at the request of DHA, or as required in paragraphs 16.2 and 17.0.

19.2  The contractor shall, if the pharmacy EOB does not contain certain data elements, ensure the missing data is included prior to referral to DHA. See Addendum A, Figure 10.A-31. If offsets have been taken, additional data elements are required as listed in Addendum A, Figure 10.A-33. All documentation shall be placed in the file in the order listed, with paragraph 19.3 on the bottom and paragraph 19.6.6.

19.3  Legible copies of all claims involved in the recoupment. If copies of all claims cannot, with good reason, be provided, a copy of the automated claims history may be substituted. However, if a claims history is substituted for copies of the actual claims, a detailed explanation of each field on the claims history shall be provided.

19.4  Documentary evidence, i.e., work papers, calculations reflecting how the amount of the overpayment was determined, establishing how the overpayment was identified and the basis for the erroneous TRICARE payment, including copies of checks and EOBs for both the erroneous payment and the correct payment, and documentation such as proof of Medicare eligibility, proof of OHI (EOB from the OHI reflecting what the OHI paid for, the relevant care and the name of the OHI, policy number and the effective dates of coverage), signed Promissory Note, etc.

19.5  The contractor shall maintain a tally sheet reflecting the original amount of the debt, each offset taken, and the balance remaining after each offset. Documentation shall be included in the recoupment case file that the offset flag has been removed. The documentation may be a copy of the contractor’s internal form to direct removal of the offset flag.

19.6  The contractor shall refer all cases to DHA OGC within five business days after the offset flag has been removed.

19.7  The contractor shall account for returned cases on the Accounts Receivable Summary Report.

19.8  The contractor shall deposit all refund checks in accordance with the instructions in Chapter 3, Section 3.

21.1  The contractor shall, when requested to do so by a DHA component (i.e., Program Integrity Office (PI), OGC), initiate recoupment action and set an offset flag on an overpaid party to collect erroneous payments.

21.2  The contractor shall comply with the instructions issued by DHA with the request. The instructions will require one or more of the actions specified in paragraph 11.0. Normally, the requests will be made following resolution of an allegation of fraud or following a provider audit or as the result of an issuance of a Final Decision in the appeal process.

21.3  The contractor shall, at the direction of DHA PI, provide a nonparticipating provider an opportunity to refund an erroneous payment in those instances where the nonparticipating provider has submitted a claim for services which were not provided or for incorrect payments, prior to initiating recoupment action against the beneficiary.

21.4  This procedure shall only be allowed after the DHA PI, has determined that the case will be resolved through administrative action. (Refer to Chapter 13.)

22.1  The contractor shall forward any requests for offset from other agencies or orders for garnishment issued by the court to DHA OGC within five business days.

22.2  The contractor shall offset TRICARE claims to collect debts owed other federal agencies only when instructed to do so by DHA OGC. This paragraph does not apply to the federal tax levies.

23.1  The contractor shall, for refund requests, include a letter in a pre-addressed return envelope with the following claim and payment information:

23.2  A penalty charge of 6% per year will be assessed on any portion of the debt that is delinquent for more than 90 calendar days and will accrue from the date that the debt became delinquent.

23.3  The contractor shall obtain the current interest rate as published in the Federal Register. Interest is to be applied under criteria set forth in paragraph 32.0.

23.4  A notice of the possibility of offset if the overpayment is not refunded.

23.5  Instructions that the refund shall be by check or money order made payable to the contractor.

23.6  A notice where appropriate (see sample letters, Addendum A, Figure 10.A-4 through Figure 10.A-11 and Figure 10.A-16), that unless a refund is made the case shall be referred to DHA OGC for further recovery action which can include referral to a credit reporting agency and the assessment of added administrative costs, penalties and interest.

23.7  A request where appropriate (see sample letters, Addendum A, Figure 10.A-8 through Figure 10.A-11), that the debtor provide his or her SSN/TIN.

23.8  An explanation as to rights for an administrative review and to appeal rights (see paragraph 26.0).

25.1  The contractor shall collect recoupment claims in one lump sum whenever possible. However, debtors may request repayment of a debt in monthly installments.

25.2  The contractor shall amortize the debt over a 24 month period (or less, if requested by the debtor), including interest on the unpaid balance at the appropriate interest rate, to determine the monthly installment amount, and assure that repayment can be made within the 24 months allowed. The use of commercial programs to perform this function is also acceptable.

25.3  The contractor shall, once it has computed the amount required each month to repay the debt in 24 regular monthly installments, if the principal amount of the debt exceeds $600, complete the Promissory Note (see Addendum A, Figure 10.A-12) and send to the debtor for his or her signature (see Addendum A, Figure 10.A-22).

25.4  If the debt is $600 or below, only a letter (see Addendum A, Figure 10.A-19) need be sent to establish the repayment agreement.

25.5  The following information is provided to assist the contractor in completing the Promissory Note:

25.6  Interest accrues from the date of the initial demand letter which advised the debtor of his rights pursuant to the Debt Collection Act of 1982 (Addendum A, Figure 10.A-4 or Figure 10.A-5). Interest shall be assessed at the rate that was in effect when the initial demand letter was mailed and that was properly reflected in that letter. DO NOT assess interest until the debtor has been properly advised of his rights. Note that the initial demand letter may be sent January 1, 2012, and the debtor may request an installment agreement five months later (June 1, 2012) or at any time before the case is referred to DHA in accordance with paragraph 19.0. Interest in all cases accrues from the date of the initial demand letter. (See Addendum A, Figure 10.A-20 for an example of interest calculations on a $1000 overpayment, with an annual interest rate of 8%. In the example, the initial demand letter was sent January 5, 2012.)

25.7  The interest rate varies, dependent upon the current value of funds to the US Treasury (see Section 2). Once a debtor has established a repayment agreement, the rate of interest on THAT debt does not change, regardless of changes in the value of funds to the US Treasury.

25.8  Installment payments shall begin approximately 30 calendar days after the request for an installment repayment agreement is made. If a debtor requests the agreement on March 1, 2014, his first installment will normally be due April 1, 2014.

25.9  The phrase “not less than _____ dollars beginning on ___,” is repeated in the Promissory Note to allow for an occasional debtor who, for example, wishes to pay one amount for six months and another amount for the last 18 months. The request may be for any number of personal reasons, i.e., a car loan may be repaid in six months and the debtor will have additional funds from which to repay TRICARE.

25.10  The contractor is encouraged to be flexible in establishing a repayment agreement; however, repayment must be scheduled for completion within 24 months. If the same amount is to be paid for the entire term of the note, delete the second phrase from the note.

25.11  The contractor shall, if the Promissory Note is not returned, or is returned unsigned, but the debtor makes the scheduled payments, treat the account as though the Promissory Note had been signed and returned.

25.12  The contractor shall acknowledge each payment received in writing and must advise the debtor of the amount received, the portion of each payment that was applied to interest and to principal, and the current balance due. The acknowledgment shall advise the debtor that the information provided may be useful in the preparation of his or her income tax return (see Addendum A, Figure 10.A-21).

25.13  The contractor shall maintain financially underwritten installment payments. Non-financially underwritten related installment payments shall be reported to DHA. Details for reporting are identified in DD Form 1423, CDRL, located in Section J of the applicable contract.

25.14  The contractor shall, when the recoupment action is completed, process the collection action using a single transaction for each claim involved.

25.15  The contractor shall remove the offset flag, when the debtor enters into an installment repayment agreement. Any suspended claims shall be processed and paid normally. If the debtor requests continuation of the offset, any amounts so collected shall be treated as an installment payment.

25.16  The contractor shall send a written notification of delinquency to the debtor not later than 35 calendar days after the established due date if an installment, or any portion thereof, remains outstanding (see Addendum A, Figure 10.A-15).

26.1  The determination that an overpayment was made is not, in itself, an appealable issue. When a contractor receives a request from a debtor for an administrative review, the procedures outlined in paragraph 29.0 shall be followed to assure that, when appropriate, the debtor receives a reconsideration as outlined in Chapter 12.

26.2  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.

26.3  The contractor shall, when the overpayment arises because inpatient mental health care was erroneously paid, advise the debtor that retroactive approval of the days paid may be requested from the TRICARE mental health review contractor (see the TRICARE Policy Manual (TPM), Chapter 7, Section 3.1).

26.4  The contractor shall identify and properly account for any funds recouped by offset after a reconsideration has been requested.

26.5  DHA OGC will, when a requirement to recoup TRICARE funds is identified in a Formal Review Decision or a Final Decision resulting from a hearing, forward the case to the appropriate contractor for development and initial recoupment action in accordance with this section.

26.6  The contractor shall return the case to DHA OGC in accordance with paragraph 16.0 if the contractor is unsuccessful in collecting the debt.

27.1  If the debtor is a hospital subject to the Diagnosis Related Group (DRG)-based payment system, offsets may be taken not only against claims on which payment would be issued to the debtor hospital, but also against annual payments due to debtor hospital as reimbursement for its Capital and Direct Medical Education (CAP/DME) costs. If the full amount is recouped through offset, an adjustment claim shall be reported with the current claim or in the next payment run. If the receivable was written off, it shall be reversed. If the receivable was transferred to DHA, immediately notify DHA OGC telephonically and follow up by letter within two business days after the telephone call. Also, reverse the transfer transaction on the next Accounts Receivable Report.

27.2  The contractor shall apply the amount of offset to the interest first and then to principal, as installment payments are applied, if a debtor has entered into an installment repayment agreement and has asked the contractor to continue to offset against future claims Generally, though, offset amounts shall be applied only to principal.

27.3  The contractor may consider the debt paid in full, if it is practical to do so when a debt has been paid either by offset, partial payment or installment payments, to within $10.00 of the total amount due, including interest, if applicable.

27.4  The contractor shall advise the debtor, if the contractor chooses to consider the debt paid in full when the balance has been reduced to $10.00 or less.

29.1  The contractor shall, if a debtor requests an administrative review of his indebtedness, review the documentation contained in the case file and any additional information or documents submitted by the debtor.

29.2  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.

30.1  The contractor shall not honor a refund request if there is reason to believe that the overpayment may have been caused by fraud, until the fraud issue is resolved.

30.2  Once a determination has been made that a case shall not be prosecuted for fraud, the DHA OGC will return the suspected fraud case to the appropriate contractor for development and recoupment under this section.

32.1  The contractor shall notify the debtor in the initial demand letter that interest will accrue from the date of that letter. The rate of interest to be assessed is the US Treasury Current Value of Funds Rate. The Department of the Treasury publishes a new rate pursuant to Section 11 of the Debt Collection Act of 1982, as Amended (31 USC 3717).

32.2  The contractor shall notify debtors in the initial demand letter that a penalty charge, not to exceed 6% per year, will be assessed upon any portion of the debt that is delinquent for more than 90 calendar days, and that administrative costs, (based upon those costs incurred in processing and handling the debt because it became delinquent) will also be added to their indebtedness.

32.3  The contractor shall not assess administrative costs and penalties (DHA will assess administrative costs and penalties).

32.4  The contractor shall assess and collect interest only when the debtor enters into an installment repayment agreement as described in paragraph 25.0. The rate of interest assessed shall be the rate properly reflected in the initial demand letter mailed to the debtor. The rate of interest assessed shall be the rate of the current value of funds to the US Treasury; i.e., the Treasury Tax and loan account rate. Each installment payment shall be applied first to the accrued interest and then to the outstanding principal balance.

32.5  Interest will not be assessed upon previously accrued interest charges. When the debtor and the contractor enter into an installment repayment agreement, interest will be assessed for the period beginning on the date of the initial demand letter and ending on the due date of the first installment payment. The interest shall be assessed at the rate properly reflected in the initial demand letter on that portion of the debt which remained outstanding 30 calendar days after the date of the initial demand letter. The interest so assessed will be collected and applied to the debtor’s account before the due date of the first installment payment. Subsequently, interest shall be computed daily on the outstanding principal balance at the rate properly reflected in the initial demand letter, which shall also be reflected in any Promissory Note sent to the debtor as required by paragraph 16.2.7.

32.6  The contractor shall report interest collected under installment agreements to DHA monthly with unidentified refunds and refunds $10.00 or less. The rate of interest, as initially assessed, shall remain fixed for the duration of the indebtedness, except that where a debtor has defaulted on a repayment agreement and seeks to enter into a new agreement, a new interest rate may be set which reflects the current value of funds to the Treasury at the time the new agreement is executed.

32.7  The contractor shall handle delinquent installment accounts in accordance with the procedures outlined in paragraph 25.0.

33.1  Overpayments to DVA/VHA facilities are not subject to the above procedures.

33.2  The contractor shall, upon identification of an overpayment issue written notice of the basis for the overpayment to the applicable DVA/VHA facility, including a request for repayment of an amount due,. The facility will acknowledge receipt within 90 calendar days of the contractor’s notification. In addition, the facility’s acknowledgment will contain any claim disputes, to include the basis for the overpayment or the calculation of the refund. The facility may request additional time to investigate potential disputes.

33.3  The contractor shall refer the case to DHA OGC, if the facility does not respond, or the contractor cannot resolve a claim dispute. If the facility does not submit a claim dispute, DVA/VHA will refund the amount due within 180 calendar days from the written notification. Upon resolution of a claim dispute, if appropriate, the DVA/VHA will issue a refund within 180 calendar days.

33.4  The contractor shall provide a monthly status report of all DVA/VHA overpayment cases. Details for reporting are identified in DD Form 1423, CDRL, located in Section J of the applicable contract.