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CMS Issues New Transmittal to Address Concerns with Recoupments

The Centers for Medicare and Medicaid Services (CMS) issued a new transmittal to address concerns regarding the reporting of recoupment for overpayment on the remittance advice (RA). During the RAC demonstration project providers would receive an RA, which is a notice of payments and adjustments sent by Medicare contractors to providers, billers and suppliers. The RA would either be delivered as a companion to a claim payment, or as an explanation when no payment was made. If a RAC denied a claim and was entitled recoup money, the amount would be taken from a future payment. However, there was not a mechanism to trace the recouped payment back to the original claim that had been denied. The result was that providers were unable to maintain correct records.

Transmittal 659 addresses this concerning by instituting a system that will assign a control number at the point a recoupment demand is made. The control number will stay attached to the claim and will later be used on the RA when the payment is offset from the provider’s reimbursement. Therefore, the control number will identify a particular claim and providers will be able to maintain accurate records.

If you need assistance with a RAC or third party payor audit or for more information, please visit or contact a Wachler & Associates attorney at 248-544-0888.

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