What issues should you consider when reviewing a managed care agreement with respect to a health insurer’s ability to recover alleged overpayments?
Retroactive denials and overpayment recovery efforts
A. The health insurer’s contractual right to recover overpayments
Managed care agreements often permit the health insurer to recover overpayments by reducing or offsetting overpaid amounts from pending or future claims payments. The following language is an example:
“Physician agrees to authorize health insurer to deduct monies that may otherwise be due and payable to physician from any outstanding monies that physician may, for any reason, owe to health insurer.”
This provision does not:
If your are dealing with a dominant health insurer and you have little negotiating power, there may be little you can do contractually to counter the health insurer’s overpayment recovery activities.
III. State legislative responses.
Fortunately, many states restrict health insurers’ ability to pursue alleged overpayments. Some impose deadlines on overpayment recovery efforts. States frequently require health insurers to give physicians detailed information prior to requesting a refund or pursuing a recoupment or offset, for example, specific information identifying patients, claims, Current Procedural Technology (CPT®) codes, dates of service, etc. Some laws may state that health insurers must make available a dispute resolution process through which a physician may challenge overpayment recovery efforts, and that any attempt to recover overpayments must be suspended until the conclusion of that process. State laws applicable to insurers and their overpayment recovery activities are identified in the Managed Care Contract Legal Database under the category “Overpayments/recoupments.”