Many Medicare Administrative Contractors or MACs are hiring outside Recovery Audit Contractors to audit claims in an attempt to recover Medicare funds that have been paid incorrectly or should not have been paid at all. In some cases these overpayments can add up to several thousand dollars. If overpayments are discovered a letter is sent to the provider informing them of the overpayment. It is important to know how to handle these letters when they arrive.


It can be very unnerving to receive a letter from your Medicare Administrator Contractor telling you that you need to repay $10,000 to your Medicare carrier because of overpayments over the past three years.

The overpayment may be for several reasons.

  • Duplicate submission of the same service or claim;
  • Payment to the incorrect payee;
  • Payment for excluded or medically unnecessary services; or
  • A pattern of furnishing and billing for excessive or non-covered services.

Before you panic, there are procedures that one must follow; including a strict timeline.



Day 1: you receive the letter from the MAC


Read the letter and the explanation as to how the overpayment occurred. If you do not understand why/how it occurred, call the MAC for an explanation. It is important that you understand why/how the overpayment occurred for two reasons:


  1. To determine if the overpayment is accurate
  2. To make sure it doesn’t continue going forward


Once you understand the reason for the overpayment, determine if you believe the overpayment is correct. One of the options described below is to submit a rebuttal. If you believe that the overpayment is not correct a rebuttal can be filed. For example, if you are notified that several claims for one particular patient were reprocessed because they state that the patient was incarcerated at the time of the services, but you know that the patient was not incarcerated, a rebuttal should be filed. Proof of the patient’s release from jail should be included in the rebuttal. Below the options of how you can respond are outlined:



Your options are:


  1. Make an immediate payment


  1. Request an immediate recoupment which means that your MAC will withhold a set amount of money, a percentage of future payments or take the complete amount owed from claims submitted.


  1. Request the standard recoupment process. If a full payment is not received 40 calendar days after the date of the initial demand letter, the standard recoupment process will begin on day 41. The overpayment will be recovered from current payments due or from future claims submitted.

If a debt has not been paid or recouped (unless a valid appeal has been filed) within 60 days of the date of the initial demand letter, an Intent to Refer letter will be sent indicating that the overpayment may be            eligible for referral to the Department of Treasury for offset or collection.


  1. Request an Electronic Repayment Schedule (ERS). If the practice cannot pay the overpayment in full, they can arrange to pay on a schedule but interest will be charged.


  1. Submit a rebuttal. You have within 15 days from the date that you received the demand letter to respond to your MAC. The letter needs to explain or provide evidence about why the MAC should not begin the recoupment. This rebuttal is not considered an appeal and will NOT stop the recoupment process however the MAC is required to address your rebuttal promptly.


Day 15: Last day for MAC to receive rebuttal


Day 30: MAC sends a second demand letter for delinquent overpayments. This is the last day to pay to avoid accrual of interest. It is also the last day to request an appeal and stop recoupment of overpayments. If you file an appeal after Day 30 but by Day 120, your MAC will stop recoupment when it receives and approves your appeal, but will not refund any monies already recouped.


Day 31: Interest begins to accrue for overpayments not paid to MAC in full by Day 30.


Days 61-150: MAC sends intent to refer (ITR) letter to the IRS for eligible delinquent debts.


Day 90: MAC attempts to contact practice by phone


Day 120: Last day to submit initial appeal request


Days 120-180: MAC enters the debt into the Debt Collection System to refer to the Treasury Department/ The MAC must attempt to reach the practice by phone at least seven days before referring to the DCS


The important thing is that you cannot simply ignore the demand for repayment. It will not go away. It is important that you determine if the overpayment is accurate and then take the appropriate action based on that determination. Making a plan will help to make the process easier.


* Please refer to the guidelines from your MAC as they frequently change and there are processes that you need to go through to do this correctly.


** This article is not intended as legal advice. If you are uncertain of anything contained in the overpayment request or any information in this article we suggest that you seek professional legal advice.


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