Recoupments are events where the payer, after any given length of time, requests payment back from the provider for what they deem as payments made in error.  Frank Cohen, MPA, MBB, senior analyst, The Frank Cohen Group, LLC (www.frankcohengroup.com), conducted a survey on recoupment from a number of different respondents. Cohen presents at multiple levels of the Medical Group Management Association, locally, regionally and at a national level. 

The purpose of the survey was to get a better understanding of whether recoupment activity in medical practices is increasing and what impact it is having on them. Cohen concluded that recoupment is more than just a problem for medical practices. Just the uncertainty of not knowing how much of the revenue you receive that you will be able to keep is a very disruptive interference in the business cycle. Most respondents reported that the recoupment letters were absent of adequate instructions on how to appeal. Combine this with the huge lag time between the claim and the recoupment letter along with a lack of information identifying the original payment information, and you have a situation unfair to the physician practice. 

While attempts to appeal recoupments were high, success was quite low. Most payer contracts allow recoupment to occur long after the time allowed for filing an initial claim. This seems to add to the bias against the physician. 

Continuing Cohen’s analysis, he said, “Considering that each payer has its own rules and payment policies, there is no way that a practice can achieve a high level of efficiency without some sort of enforced standard. While HIPPA was supposed to work and help enforce standards, only the providers are required to abide by the rules, not the payers.”

 Cohen’s survey included an examination of Electronic Funds Transfer (EFT) and found that the majority (76 percent) of respondents said that they accept EFT.  The alarming finding was that payers, in addition to making payments electronically, also removed funds electronically from EFT accounts.  Furthermore almost 10 percent of the respondents who accept EFT didn’t know that the payer was removing these funds electronically.  This is particularly important in reconciling against deposits. Regarding the take backs from payers, one of the respondents commented, “Yes, they were taking back these funds electronically, and most distressing is that they take back for any patient, anytime and from another patient’s payment without any reason-this is not right.” 

It is troubling that over 60 percent of respondents felt that there was not a clear explanation for this since, in order to either take action to prevent similar mistakes from occurring in the future, it is critical that the practice understand why the payer is requesting the money back. Some 15 percent of respondents stated that they were not interested in participating in EFT because payers recoup directly from the bank accounts without prior notification. The lack of information provided by the payer is also critical to medical practices because appealing claims is the only recourse they have to fight the recoupment effort.  Nearly half of the respondents reported they appeal less than 25 percent of the time, and nearly 75 percent appeal less than half the time. 

Cohen concludes in his survey, “Perhaps the most disturbing of all is that over half of the respondents reported successful appeals less than 25 percent of the time. This is in contrast to other surveys conducted by Cohen that showed more successful appeals involving RAC  audits (35 percent success) and appeals for general claims denials (80 percent success).

Organizations representing physicians should use the results of this survey to aggressively pursue enforcement of recoupment time limits and improve the information provided in the letters to assist physicians with education concerning the appeals process. 

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