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, there is no practical time limit after which Medicare cannot ask for money back. Novitas, the Medicare carrier for Texas, is required by contract to pursue refunds on overpayments. Automatic recoupments from current and/or future payments are permitted.
- 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
Patient Refunds and Unclaimed Overpayments
Texas laws TIC Sec. 1661.005, TPC Title 6, Chs. 71-77, and TOC Sec. 101.352(h) require physicians to refund patient overpayments, regardless of the amount, within 30 days of determining an overpayment has been made. Failure to do so may result in penalties and interest from the
Texas Comptroller of Public Accounts, possible criminal charges relating to conversion of property, and disciplinary action from the Texas Medical Board. If you are unable to locate the patient to return the overpayment and the patient does not claim the money after three years, you must file a report and escheat (turn over the overpayment) the funds to the Office of the Texas Comptroller's unclaimed property unit. You must also retain records of unclaimed funds for 10 years from the date you reported them to the Comptroller.