Recoupments and Refund Requests
Fully Insured Health Plans
The insurance company pays claims and assumes all risk. Fully insured plans are governed by the Texas Department of Insurance and must follow the Texas Prompt Pay Law (all fully insured plans have a TDI or DOI on the insurance card).
In general, the Texas prompt pay law applies to fully insured HMO and PPO plans licensed and sold in Texas. It does not apply to other plans, i.e., Medicare, Medicaid, workers' compensation, TriCare, self-funded employer plans, state and federal employee plans, indemnity policies, and out-of-state Blue Cross plans (BlueCard) filed to Blue Cross and Blue Shield of Texas.
- Refunds/Recoupments 180-Day Limit - This applies only to claims subject to the Texas prompt pay law. If 180 days have lapsed from the date payment was received, no refund is due. Carriers must first send a written refund request before automatically recouping money. After 45 days, if the carrier does not receive the refund or a written appeal, it can recoup the payment.
- Verification - Verification, as defined in the Texas prompt pay law, is the ONLY guarantee that a payer cannot recoup later. "Pre-authorization" or simply "verifying benefits" is not a guarantee.
Self Funded Health Plans
The employer pays claims and assumes all risk. These plans are regulated by ERISA
and the Summary Plan Description for the plan.
- Recoupment time limits are based on individual contractual agreements and/or the Summary Plan Description. Nothing prevents carriers from automatically recouping payments, regardless of the providers participation status with the plan. If the payer contract does not address recoupments then the Civil Practice and Remedies Code §16.004 applies and the statute of limitations is four years (excluding government programs). Refer to the Summary Plan Description for guidance.
- A refund request/recoupment is considered an adverse benefit determination and as such, per CFR Title 29 2560.503-1(h), the plan must provide a reasonable opportunity to appeal.
- Medicare - In general refund requests cannot be made subsequent to the fifth calendar year after the year the payment was made. Depending on the circumstances (fraud, etc.), this time frame can be exceeded.
- Medicaid - In general, Medicaid may request refunds for up to five years. Depending on the circumstances, this time frame can be exceeded.
- State and federal employer plans - In general, there is no time limit for refund requests or recoupments. Refer to the Summary Plan Description for guidance.