Refund Requests
I have several years experience with insurance refunds. In the state of Florida Insurance payers have a maximum of 30 months from the PAID date to request a refund from a provider- contracted or not. Medicare does not have a limitation. The only time a limitation is void is if the refund in question is due to a fraud related investigation.
The refund letter should provide a reason for the refund request and instructions on how to dispute the refund if the provider disagrees. If there is no response from the provider disputing the refund, they can start offsetting (in Florida) on the 31st day after the refund request letter was dated. Often times payments are made in error by the payers and regardless of the error on their part, they have a right to request that money back. I cant even begin to tell you how many refunds we've had to issue because they processed the claim wrong and paid it when it should have gone towards the patient's deductible, the patient was retroactively disenrolled from the plan, they didnt apply a multiple procedure discount properly, etc. We have a dedicated refunds dept due to our size.
Normally if a provider is unable to pay back the money all at once, the provider should get in contact with the refunds department to negotiate a time frame to pay the money back without offsetting all at once. For example, back in 2012-2013 Medicaid had paid our providers the 20% Medicare coinsurance when they shouldn't have been paid. This resulted in a $250,000 take back. In order to comply, the director reached out to our provider rep with Medicaid and they would offset a specific amount from our claims every month until all of the money was paid back. It took about 2 years to complete.
Check your state statutes just to be safe as different states allow different look back periods.
From Florida's 2016 Statute 627.6131
4. Payment of an overpayment claim is considered made on the date the payment was mailed or electronically transferred. An overdue payment of a claim bears simple interest at the rate of 12 percent per year. Interest on an overdue payment for a claim for an overpayment begins to accrue when the claim should have been paid, denied, or contested.
(b) A claim for overpayment shall not be permitted beyond 30 months after the health insurer’s payment of a claim, except that claims for overpayment may be sought beyond that time from providers convicted of fraud pursuant to s. 817.234.
