TRICARE Operations Manual 6010.62-M, April 2021
Claims Adjustments And Recoupments
Chapter 10
Section 3
OverpaymentsRecovery - Non-Financially Underwritten Funds
Revision:
This section applies to fundsfor which the contractor is non-financially underwritten, with theexception of funds overpaid to the Department of Veterans Affairs/VeteransHealth Administration (DVA/VHA) facilities (see paragraph 33.0).For recovery of overpayments involving funds for which the contractoris financially underwritten, see Section 2. Forinformation on the processing of Overpayment Recovery-Non-FinanciallyUnderwritten Funds during contract transition, see Chapter 2, Section 10.
1.0CAUSES OF OVERPAYMENTS
The occurrence of any of thefollowing circ*mstances may result in an erroneous payment and arequirement for recoupment action. (This list is not intended tobe all-inclusive).
•Erroneous calculation of theallowable charge
•Erroneous coding of a procedure
•Erroneous calculation of thecost-share or deductible
•Duplicate payment
•Incorrect payee
•Payment by Other Health Insurance(OHI)
•Erroneous billing
•Patient not eligible
•Unauthorized provider
•Noncovered service or supply
•Service not actually received
•Services not medically necessary
2.0DETERMINATION OF LIABILITYFOR OVERPAYMENT
The generalrule for determining liability for overpayments is that the personor provider who received the erroneous payment is responsible forthe refund.
3.0PROVIDER LIABLE
Overpayment refunds shall besought from the provider who received the incorrect payment in thefollowing situations:
3.1The providerfurnished erroneous information or failed to disclose facts thatthe provider knew or should have known were relevant to paymentof the benefit. (Refer to Chapter 13.)
3.2The payment was based on anamount in excess of that allowable.
3.3The providerreceived and retained duplicate TRICARE payments.
3.4The provider turned a duplicateTRICARE payment over to the beneficiary.
3.5The overpaymentwas due to a mathematical or clerical error; e.g., an error in calculationof overlapping or duplicate bills. Mathematical error does not includea failure to properly assess the deductible. Where a provider hasbeen incorrectly paid a deductible, the provider shall be deemedto be without fault and any required recovery shall be sought fromthe beneficiary.
3.6The overpaymentwas for non-covered services, supplies, or pharmaceutical agents.
3.7The services, supplies, orpharmaceutical agents were not received by the beneficiary or thereis no documentation to substantiate that the provider performedthe services or provided the pharmaceutical agents claimed. (See Chapter13, if fraud is suspected.)
3.8The services,supplies, or pharmaceutical agents were furnished by an unauthorizedprovider.
3.9The TRICARE payment was madeto the participating provider and a primary health insurance or pharmacyplan also made a payment to the provider or beneficiary for thesame services or supplies, and the combined payments exceed thelower of the amount remaining after the double coverage plan haspaid its benefits or the amount TRICARE would have paid as primarypayor. See TRICARE Reimbursem*nt Manual (TRM), Chapter4.
3.10The payment was made to thewrong provider or a nonparticipating provider.
3.10.1The contractor shall issuepayment to the correct payee and concurrently initiate recoupmentaction against the erroneously paid provider.
3.10.2The contractor shall not postponeissuing payment to the correct provider pending completion of the recoupment.
3.11The patient was not eligibleat the time the services were provided. Except when payment wasmade to a retail network pharmacy based on erroneous eligibilitydata provided by the Government from Defense Enrollment EligibilityReporting System (DEERS), the pharmacy may retain the payment asa good faith payment.
3.12The patienthad OHI or pharmaceutical coverage primary to TRICARE.
4.0BENEFICIARY LIABLE
Erroneous payment refunds shallbe sought from the beneficiary in the following situations:
4.1The overpayment was causedby incorrect application of the deductible or cost-share.
4.2The patient was not an eligiblebeneficiary at the time services were provided and the payment was madeto a participating provider for whom a good faith payment has beenauthorized under paragraph 6.0. When payment was made to aretail network pharmacy based on erroneous eligibility data providedby the Government from DEERS, the pharmacy may retain the paymentas a good faith payment.
4.3In addition,when the TRICARE Overseas Program (TOP) contractor creates an authorizationfor a TOP provider based upon erroneous DEERS data and improperlypays a TOP provider, the TOP provider may retain the payment asa good faith payment.
4.4The beneficiarywho received TRICARE payment had OHI or pharmacy coverage primaryto TRICARE.
4.5The TRICARE payment was madeto the beneficiary instead of the participating provider.
4.6The contractor shall immediatelyissue payment to the participating provider and concurrently take recoupmentaction against the beneficiary.
4.7Any otherinstance where the erroneous payment was made directly to the beneficiary.
5.0OVERPAID PARTY IS DECEASED
5.1The contractor shall seek recoupmentof the overpayment from the estate of the deceased person, if the contractordetermines that liability for an overpayment rests with the beneficiaryor provider who is deceased.
5.2The contractorshall follow procedures described in this Section.
6.0GOODFAITH PAYMENT
6.1Participating providers whoexercise reasonable care and precaution in identifying persons claimingto be eligible TRICARE beneficiaries and furnish otherwise-coveredservices and supplies to such persons in good faith, may be granteda good faith payment, although the person receiving the servicesand supplies is subsequently determined to be ineligible for benefits.In order to meet the requirements for a good faith payment, theparticipating provider must have:
6.1.1Exercisedreasonable care and precaution in identifying the patient as TRICAREeligible.
6.1.2Made reasonable efforts tocollect payment for the services provided from the person who erroneously claimedto be a TRICARE beneficiary.
6.2In order to qualify for a goodfaith payment, the provider must submit documentation to substantiate thathe or she has met BOTH requirements. The usual evidence that a providerhas exercised reasonable care and precaution in identifying thepatient as TRICARE-eligible is a copy of the patient’s ID card whichindicates that he or she was eligible for civilian medical careat the time services were provided. Generally, the provider musthave obtained the copy of the ID card when the services were provided.If the provider did not obtain a copy of the ID card, he or sheshall submit an explanation of why a copy was not obtained and thereason(s) for his or her determination that the patient was eligiblefor TRICARE benefits.
6.3The documentationrequired to establish that a provider has made reasonable effortsto collect will vary, depending upon the facts of each case. Suchdocumentation may include, but is not limited to, invoices or demand letterssent to the patient and memoranda of telephone calls to the patientdemanding payment. If the TRICARE beneficiary has moved and leftno forwarding address, the provider shall supply copies of returnedletters or memoranda of unsuccessful attempts to reach the patientby telephone.
6.4The contractor is not authorizedto determine whether a provider exercised “reasonable care” whichmay qualify the provider for a good faith payment; nor are theyauthorized to seek, invite, or encourage good faith payment requestsfrom providers.
6.5The contractorshall advise the provider of the procedures for requesting a goodfaith payment, if a provider initiates an inquiry regarding denialof a claim due to the patient’s ineligibility, or a recoupment actionin which the patient’s eligibility is the issue.
6.6The contractor shall, if thecontractor has NOT paid the participating provider (i.e., the claimis denied), advise the provider and the patient by Explanation OfBenefits (EOB) that the claim has been denied due to the patient’sineligibility so that the provider may attempt collection from thepatient in a timely manner. Occasionally, the patient may need onlyto update his DEERS record, so that the denied claim may be processedand paid. Upon notification of the patient’s ineligibility, theprovider shall attempt collection from the patient.
6.6.1The contractorshall, if the provider alleges that he or she exercised reasonablecare and caution in identifying the patient as TRICARE-eligibleand requests a good faith payment, advise the provider in writingwithin 30 calendar days of the date of the request that documentationof his or her efforts to collect from that patient is required.
6.6.2The contractor shall referthe file to Defense Health Agency (DHA) TRICARE Health Plan (THP),for consideration of the request for a good faith payment and shallinclude:
•Pertinent claim form(s) andEOB(s). (If the pharmacy EOB does not contain certain data elements,then a separate report is required (see Addendum A, Figure 10.A-32). If offsets havebeen taken, additional data elements are required as listed in Addendum A, Figure 10.A-33.)
•Evidence of the patient’s ineligibility.
•The provider’s request fora good faith payment.
•Documentation of all contractorcontacts with the provider and the patient.
•Documentation of efforts madeby the provider to identify the patient as TRICARE-eligible priorto rendering service.
•Documentation of efforts tocollect from the ineligible patient.
6.7The contractor shall notifythe provider that his request has been referred to DHA THP.
6.7.1The contractor shall, if DHATHP grants the request for a good faith payment, reprocess and paythe previously denied assigned claim and initiate recoupment actionagainst the patient.
6.7.2The contractorshall cite Special Processing Code (SPC) G2 - GoodFaith Payment (TRICARE Systems Manual (TSM), Chapter 2, Section 2.8, Record Locator 1-185or 2-305) when submitting the TRICARE Encounter Data (TED) record.
6.8The contractor shall, if anassigned claim was paid before the contractor discovered the patient’s ineligibility,initiate recoupment action against the participating provider, andconcurrently, advise the patient of his or her ineligibility forTRICARE benefits and his or her liability for payment to the provider.If the provider alleges that he or she exercised reasonable careand precaution in identifying the patient as TRICARE-eligible, andrequests a good faith payment, the file shall be referred to DHATHP, for consideration of the request. The provider is requiredto supply all of the documentation outlined in paragraph 6.2.
6.8.1The contractor shall, if theprovider’s good faith payment request does not include documentationto substantiate the provider’s efforts to collect from the patient,notify the provider in writing within 30 calendar days of the dateof the provider’s request of the requirement to provide the information.
6.8.2The contractor shall, uponreceipt of the requested information, notify the provider that hisor her request has been referred to DHA THP.
6.8.3The contractor shall suspendrecoupment action until a response to the good faith payment request hasbeen received.
6.8.4The contractorshall, if no response is received within 60 calendar days, contactthe DHA Office of General Counsel (OGC), to determine whether continuedsuspension of recoupment action is appropriate.
6.8.5The contractor shall, if DHATHP notifies the contractor that a good faith payment has been granted, terminatecollection action against the provider, refund any monies collectedfrom the provider, and initiate recoupment action against the ineligiblepatient.
6.8.6The contractor is NOT requiredto update the existing TED record with SPC = G2.
7.0OVERPAYMENTS RESULTING FROMALLEGED MISINFORMATION
An allegationby a patient or provider that information obtained from a BeneficiaryCounseling and Assistance Coordinator (BCAC), contractor or otherparty resulted in the overpayment does not alter the liability forthe overpayment nor is it grounds for termination of recoupmentactivity.
8.0DENIAL OF BENEFITS PREVIOUSLYPROVIDED
In thoseinstances where DHA clarification, interpretation, or a change inthe TRICARE Regulation results in denial of services or suppliespreviously covered, no action need be taken to recover paymentsexpended for these benefits prior to the date of such clarificationor change, unless specifically directed by DHA.
9.0DOUBLE COVERAGE SITUATIONS- PRIMARY HEALTH INSURANCE PLAN OR PHARMACY PLAN LIABLE
A “Primary Plan,” under TRICARELaw and Regulation is any OHI or pharmacy coverage the patient has,except Medicaid (Title XIX) or a supplement plan which is specificallydesigned to pay only TRICARE deductibles, coinsurance and othercost-shares (see the TRM, Chapter 4).Prior to payment of any claim for services or supplies renderedto any TRICARE beneficiary, regardless of eligibility status, itmust be determined whether double coverage exists. If the reasonfor the overpayment is that another coverage plan primary to TRICAREwas not considered in whole or in part in the coordination of benefits,then the following actions are required to recover the overpayment:
9.1The contractor shall, if theprimary plan has not made payment to the beneficiary or provider,attempt to recover the overpayment from the primary plan followingthe contractor’s coordination of benefits procedures.
9.2The contractor shall, if theoverpayment cannot be recovered from the primary plan, or if theprimary plan has made payment, recover the overpayment from theparty that received the erroneous payment from TRICARE.
10.0THIRD PARTY RECOVERIES
The contractor shall, whenpotential recovery from or actual payment by a liable third partyis discovered, refer the matter to the designated Uniformed ServiceClaims Office (USCO) as set forth in Section 4.
11.0PROCEDURESFOR RECOUPMENT OF OVERPAYMENTS
11.1The contractorshall, for the purpose of determining the amount of the overpaymentin a particular case, include all claims overpaid for the same reason/case/EpisodeOf Care (EOC).
11.2The contractorshall conduct all research required to establish the existence ofa debt and the initial demand letter shall be issued within 30 calendardays from the date that a potential recoupment action is identifiedor notification is received that an erroneous payment has been made.(See sample letters Addendum A, Figure 10.A-4 and Figure 10.A-5.)
11.3The contractor shall ensurethat all demand letters are sent to the correct debtor at the mostcurrent address on file, i.e., enrollment file, provider file, claimshistory, etc. When letters are returned by the post office the forwardingaddress shall be obtained and letters that are returned shall bereissued to the new address.
11.4The contractormay request a waiver to the claim adjustment requirements on a caseby case basis for any recoupment case involving a large number ofclaims having low dollar overpayments. Such requests are to be sent tothe Chief, Claims Collection Section (CCS), DHA.
11.5The pharmacy contractor shallissue the initial demand letter to a network pharmacy within 30calendar days of the end of the 60 calendar day period referencedin Section 1, paragraph 1.0, if collection pursuantto the network agreement is not successful.
12.0ERRONEOUS PAYMENTS RESULTINGFROM INCORRECT ASSESSMENT OF THE DEDUCTIBLE
12.1The contractorshall, when it erroneously calculates the deductible and the erroris discovered within the same fiscal year as the one in which theerror was made, correct the error by properly assessing the deductibleon the next claim or claims. No recoupment notice needs to be givenif the deductible can be collected within the fiscal year in whichthe error was made.
12.2The contractorshall, if the deductible cannot be collected in the same fiscalyear in which the error was made, initiate recoupment action inaccordance with this Chapter, regardless of the amount owed by the beneficiary,as a result of the erroneous calculation of the deductible.
13.0OTHER THAN PARTICIPATING PROVIDER
13.1The contractor shall flag therecord of the overpaid party for possible future offset action andsuspend payment on a sufficient number of current claims to satisfythe amount of the debt, when an initial request for refund is sent.
13.2The contractor shall processsuch claims to the point of payment to expedite finalizing whenthe refund payment is received. If the debtor on the claim in questionis other than a participating provider, a system flag shall be setfor future offset action.
13.3The contractorshall, if the refund request is unsuccessful after 30 calendar daysfrom the date of the request, offset against any claims suspendedduring the 30 calendar days as required in this section.
13.3.1The contractor shall make theoffset against any claim or claims on which payment(s) would bemade to the previously overpaid party, irrespective of who is thepatient on the claim from which offset is taken. For example, wherebenefit payments have been made to either parent on behalf of aminor child; i.e., under 18 years of age, unless one parent hasbeen named the custodial parent in a divorce decree, both parentsare responsible for those debts and offset may be taken againstclaims of either parent.
13.3.2The contractor shall not takeaction to offset against a sponsor for debts of the spouse or againsta spouse for debts of the sponsor.
13.3.3The contractor shall preparea EOB or substitute EOB for pharmacy claims (Addendum A, Figure 10.A-33) for each claimagainst which offset was made and send a notice to the overpaidparty explaining the overpayment and the offset action (see sampleletter, Addendum A, Figure 10.A-6), if the overpaymentis offset.
14.0PARTICIPATING PROVIDER
14.1The contractor shall send awritten request for refund to the overpaid party within 30 calendardays of identifying an overpayment.
14.2The contractorshall notify the beneficiary in writing that a recoupment actionhas been initiated against the rendering provider. This letter shallidentify the beneficiary’s specific claims included in the recoupmentaction. The letter shall advise the beneficiary that no responseis required and refer the beneficiary to the contractor’s customerservice function if they have further questions. (See sample letter, Addendum A, Figure 10.A-7.) No offset flagis set at this point in the recoupment process (see paragraphs 16.2.3 through 16.2.6).
14.3The pharmacy contractor isnot required to issue the notice (Addendum A, Figure 10.A-7) to the beneficiaryunless directed by DHA.
15.0OVERPAYMENTS TOTALING LESSTHAN $110
The contractorshall take no recovery action when the overpayment to a single payeeis less than $110.
16.0OVERPAYMENTSTOTALING $110 OR MORE
The contractorshall take the following recovery actions when the overpayment resultedfrom reasons other than failure to properly assess the deductibleand the overpayment totals $110 or more.
16.1Account Balance $110 To LessThan $600
16.1.1The contractor shall send afollow-up letter 30 calendar days from the date of the initial letter,if the initial refund request is unsuccessful and there are insufficientfunds available for a full offset.
16.1.2The contractor shall, in allfollow-up requests, include a copy of the original refund requestand notification to the overpaid party that unless arrangementsfor refund are made with the contractor within 30 calendar daysfrom the date of the follow-up request, an attempt shall be madeto offset against future claims. (See instructions in paragraphs 16.2.3 through 16.2.6 andthe sample letters, Addendum A, Figure 10.A-8 and Figure 10.A-10).
16.1.3The contractor shall ascertainwhen one year has passed and the debt has not been collected, whether thereare any other active recoupment cases under $600 against the samedebtor. In those cases which are not transferred to DHA (i.e., casesbelow $600 in which the debtor has not requested relief from theindebtedness), the offset flag shall remain on the file of the overpaidparty for the term of the TRICARE contract for potential future offset.
16.1.4The contractor shall consolidateall cases when there are one or more additional under $600 active recoupmentcases against the same debtor and the total outstanding debt forall active recoupment cases is $600 or more, with a blank sheetbetween each debt and a cover sheet completed to reflect the combinedtotal dollar amount of the consolidated cases.
16.1.5The contractor shall, beforetransfer of the combined debts to DHA OGC, send a letter to thedebtor advising that the debts have been consolidated, list thebeneficiary name(s) dates of service and individual recoupment amounts.The letter should also state that the debts have been referred toDHA OGC, and therefore, future payments should be sent to the ContractResource Management (CRM) office.
16.1.6The contractor shall submita credit adjustment to include all amounts recouped up to the pointof referral.
16.1.7The contractor shall removethe offset flag when the cases are transferred. Documentation shallbe included in the recoupment case file that the offset flag hasbeen removed. The documentation may be a copy of the contractor’sinternal form to direct removal of the offset flag.
16.1.8The contractor shall referall cases to DHA within five business days after the offset flaghas been removed.
16.1.9The contractor shall submita Non-Financially Underwritten Accounts Receivable Report. Detailsfor reporting are identified in DD Form 1423, Contract Data RequirementsList (CDRL), located in Section J of the applicable contract.
16.2AccountBalance $600 Or More
16.2.1The contractor shall send afollow-up letter to the provider not later than 30 calendar daysfollowing the date of the initial letter, if the initial refundrequest is unsuccessful and there are insufficient funds availablefor a full offset (see paragraph 13.3.1).
16.2.2The contractor shall, for allfollow-on requests, include a copy of the original refund requestand will notify the overpaid party that unless arrangements forrefund are made with the contractor within 30 calendar days fromthe date of the follow-up request, an attempt shall be made to offsetagainst future claims, and the matter shall be referred to DHA forfurther action (see sample letters, Addendum A, Figure 10.A-9 and Figure 10.A-11).
16.2.3The contractor shall, set anoffset flag on the file of the overpaid party (including a participating providerand other debtors), until the file is transferred to DHA in accordancewith paragraph 19.0, if the initial and follow-uprefund requests and the offset attempt, if any, are unsuccessfulfor a period of 60 calendar days from the date of the initial demandletter.
16.2.4The contractor shall preparean EOB for each claim against which offset was made and send a noticeto the overpaid party explaining the overpayment and the offset.See the sample letter at Addendum A, Figure 10.A-6, when all or partof an overpayment is offset.
16.2.5If the offset is against theprovider, the provider shall be advised that reimbursem*nt for theclaim against which the offset was made may not be sought from thepatient on whose behalf the services were provided. Additionally,a letter (see Addendum A, Figure 10.A-18) shall be sentto the TRICARE beneficiary against whose claim the offset was taken.
16.2.6The contractor shall send afinal demand letter to the debtor (see Addendum A, Figure 10.A-16), if the debt hasnot been collected in full and there has been no positive responseto the demand for payment such as a request for installment repaymentagreement within 90 calendar days from the date of the initial demandletter, and the balance remaining on the refund request is $600or more.
16.2.7The final demand letter shallbe sent regardless of whether the debtor is a beneficiary or a providerand shall be accompanied by a completed Promissory Note (see Addendum A, Figure 10.A-12).
16.2.8The contractor shall referthe case to the DHA OGC, if offsets have not resulted in collectionof at least 50% of the amount of the debt, and there has been nopositive response to the demands for payment within 150 calendardays from the date of the initial demand letter and the balanceremaining on the account is $600 or more.
16.2.9The contractor shall, if successfulin collecting 50% or more of the total amount of the debt, keepthe offset flag in place, and hold the case an additional 150 calendardays. Those cases that are held 300 calendar days because collectionby offset during the first 150 calendar days was largely successful,shall be transferred to DHA OGC, on the 301st day, if the balanceremaining on the account is $600 or more.
16.2.10The contractor shall removethe offset flag on an account when it is transferred to DHA OGC,or when the contractor is advised to do so by that office. Documentationshall be included in the recoupment case file that the offset flaghas been removed. The documentation may be a copy of the contractor’sinternal form to direct removal of the offset flag.
16.2.11The contractor shall advisethe debtor of the case referral to DHA and the debtor shall be notifiedthat future payments should be sent to DHA CRM (see Addendum A, Figure 10.A-24).
16.2.12The contractor shall submita credit adjustment to include all amounts recouped up to the pointof referral.
16.2.13The contractor shall performa final check of the DEERS for debtor eligibility prior to transferring ineligiblecase to DHA OGC.
16.2.14The contractor shall referall cases to DHA OGC within five business days after the offsetflag has been removed. The contractor shall not consolidate cases$600 or more.
16.2.15The contractor shall refer,within one business day, any case with an account balance of $600or more in which a debtor unequivocally refuses to pay and no possibilityof offset exists to DHA OGC. Any case in which a debtor seeks relieffrom the indebtedness due to financial hardship, or seeks otherequitable relief shall be handled in accordance with paragraph 28.0.
17.0BANKRUPTCY
17.1The contractor shall forwardall Notices of Bankruptcy, and letters from petitioners, attorneysfor petitioners, and trustees of the bankrupt estate to DHA OGCwithin three business days of receipt. Each Notice of Bankruptcyforwarded to DHA shall include: the debtor’s full name; the debtor’sfull and complete Social Security Number (SSN)/Tax IdentificationNumber (TIN); the name of the bankruptcy court wherein bankruptcywas filed; and the bankruptcy case number. (See sample coversheet, Addendum A, Figure 10.A-30).
17.2The contractor shall verifythat the only bankruptcy cases forwarded to DHA are for debts whichwere paid with non-financially underwritten funds.
17.3The contractor shall take theadditional following actions:
17.3.1If the petitioner in bankruptcyis indebted to TRICARE, all recoupment actions shall cease.
17.3.2If the debtor is on offset,the contractor shall terminate the offset immediately.
17.3.3If the recoupment case(s) againstthe bankrupt petitioner has not already been transferred to theDHA OGC, the complete case file(s), regardless of dollar value,shall be transferred with the Notice of Bankruptcy within threebusiness days of receipt. Each case file shall contain all the documentationrequired by paragraph 19.0.
17.3.4The contractor shall not holdthe Notice of Bankruptcy while they attempt to obtain all of therequired documentation.
17.3.5A note will be placed in thecase file to indicate when the missing documentation will be forwarded.If any amounts have been collected by offset or voluntary repaymentby the debtor, the case file must contain the dates and amountsof each offset and payment.
17.3.6At the time the case file isforwarded to DHA OGC, a check for the total amount collected shallbe forwarded to DHA CRM. The following information shall accompanythe check:
•The debtor’s full name.
•The sponsor’s SSN on the overpaidclaim.
•The Internal Control Number(ICN)/Refund Control Number (RCN) of the overpaid claim.
•The dates and amounts of eachoffset and/or payment.
17.4The contractor shall, if thereis no ongoing recoupment case against the petitioner in bankruptcyand the petitioner is a provider, ascertain whether any assignedclaims are pending for the petitioner provider.
17.4.1The contractor shall, if thereare claims pending, suspend claims payment and forward the Noticeof Bankruptcy to DHA OGC within three business days of receipt withadvice as to the number of claims suspended and their value.
17.4.2The DHA OGC will advise thecontractor when the pended claims may be processed and to whom paymentshould be issued. (See Addendum A, Figure 10.A-29 for a sample reportof claims pended for provider bankruptcy.)
17.5The contractor shall identifyindividuals and providers who have, during the term of their DHAcontract, filed a Petition in Bankruptcy, regardless of whetherthe petitioner is or has been indebted to TRICARE.
17.6The contractor shall initiateno recoupment action, either on their own initiative or upon therequest of another DHA component, against a debtor who has fileda petition in bankruptcy, without prior approval by the DHA OGC.
18.0PROCESSING CLAIMS WHEN THEPRIMARY INSURER IS BANKRUPT OR IN RECEIVERSHIP
18.1When insurancecompanies which have been primary to TRICARE are filing petitionsin bankruptcy or have been placed in receivership refuse to honorclaims, this situation is different from that in which an employeror labor union stops paying premiums to an insurance company. Inthe latter case, insurance coverage ceases for the employee or memberof the labor union when premiums have not been paid; the TRICAREclaims should be processed in the same manner as any other claimon which the beneficiary has no OHI. Although the TRICARE beneficiarywho was formerly covered by the bankrupt insurer may have a claimagainst the bankrupt estate, the beneficiary may have to wait yearsfor distribution of assets, if any. Since TRICARE is, by federalstatute and regulation, secondary to all health benefit and insuranceplans (except Medicaid), extraordinary measures must be taken toallow TRICARE to pay claims as primary payer pending any distributionof assets from the bankrupt estate.
18.2The contractorshall have documentation to prove that a claim was filed with theprimary insurer or a Proof of Claim was filed with the bankruptcycourt. This information may be requested using Addendum A, Figure 10.A-26.
18.3The contractor shall, whena TRICARE beneficiary or participating provider provides evidencethat the beneficiary’s primary insurer is in bankruptcy and is nolonger honoring claims, issue payment on a claim-by-claim basis,after the following steps have been taken:
18.3.1Determine the time period thatthe TRICARE beneficiary was covered by the bankrupt insurer.
18.3.2For each claim, ascertain whetherthe medical care claimed was received during the period of coverage bythe bankrupt insurer.
18.3.3If the medical care was receivedafter the petition in bankruptcy was filed by the primary insurer, determinewhether the TRICARE beneficiary has obtained alternative insurancewhich is primary to TRICARE. If alternative insurance has been obtained,process the claim under the double coverage provisions of the TRM.
18.3.4If the medical care was receivedprior to the filing of a petition in bankruptcy by the primary insurer, determinewhether the primary insurer has issued payment on the claimed services.
18.3.5If the bankrupt primary insurerhas not issued payment on the claimed services, and the medicalcare was received during the period of coverage by the bankruptinsurer, determine who the payee on the TRICARE check will be. Normally,if the claim is assigned, payment is issued to the provider of medicalservices. If the claim is not assigned, payment is issued to theTRICARE beneficiary, or, if the TRICARE beneficiary is a minor,or incompetent, to a parent, guardian, or conservator.
18.3.6If the TRICARE payment is tobe issued to a provider, complete the Power of Attorney (POA) and Agreement(Addendum A, Figure 10.A-25) and mail it tothe provider. The date line on page two of the form is to be completedby the provider. Use the letter at Addendum A, Figure 10.A-26.
18.3.718.3.7 If the TRICARE paymentis to be issued to the TRICARE beneficiary, or his or her parentor guardian, complete the POA and Agreement (Addendum A, Figure 10.A-27) and mail it tothe beneficiary. The date line on page two is to be completed bythe beneficiary. Use the sample letter at Addendum A, Figure 10.A-28.
18.3.8If the signed POA and Agreementhas not been returned within 35 calendar days from the date of the contractor’sletter (Addendum A, Figure 10.A-26 or Figure 10.A-28),the claim is to be denied.
18.3.9The contractor shall processthe claim when the signed POA and Agreement has been received. The POAand Agreement must have an original signature; facsimile signatures(i.e., signature stamps) are not acceptable. An authorized agentof a participating provider may sign the POA and Agreement; however,no special designation of appointment is required. Only one signedPOA and Agreement is required from each potential recipient of aTRICARE payment for medical care claimed during the period of coverageby the bankrupt insurer. A separate POA and Agreement is not neededfor each claim. Each potential recipient of a TRICARE payment (i.e., beneficiaryor participating provider) who signs a POA and Agreement may filemore than one claim for services provided or received during theperiod the TRICARE beneficiary was covered by the bankrupt insurer.
18.3.10The contractor shall maintaina record of all signed POAs and Agreement and all claims on which TRICAREpayment has been issued as the primary payor.
18.3.11The contractor shall performthe required follow-up and complete the required report. Claim formsand EOBs shall be filed in the usual manner.
18.3.12The contractor shall, biannually,follow-up with each beneficiary for whom claims have been paid by TRICAREas primary payor as a result of the filing of a petition in bankruptcyby the primary insurer. If any assets were distributed from thebankrupt estate to the TRICARE beneficiary for medical care, theamount received either by the TRICARE beneficiary or the participatingprovider will be treated as a payment made by the primary insurer, andbenefits shall be coordinated in the usual manner.
18.3.13The contractor shall initiaterecoupment action from the recipient of the TRICARE overpayment,if the contractor determines that an overpayment has been made.
18.3.14If, during a biannual follow-up,the contractor learns that the bankruptcy case has been closed,and no assets have been distributed, no further follow-up is required.
18.3.15The contractor shall send thePOA and Agreement forms, with copies of claims and EOBs to DHA OGC,if a transition occurs before the contractor determined that thebankruptcy case has been closed, with or without distribution ofassets.
19.0CASEREFERRALS
19.1The contractor shall includethe documentation listed below for cases referred to DHA OGC, atthe request of DHA, or as required in paragraphs 16.2 and 17.0.
19.2The contractor shall, if thepharmacy EOB does not contain certain data elements, ensure themissing data is included prior to referral to DHA. See Addendum A, Figure 10.A-31. If offsets havebeen taken, additional data elements are required as listed in Addendum A, Figure 10.A-33. All documentationshall be placed in the file in the order listed, with paragraph 19.3 onthe bottom and paragraph 19.6.6.
19.3Legible copies of all claimsinvolved in the recoupment. If copies of all claims cannot, withgood reason, be provided, a copy of the automated claims historymay be substituted. However, if a claims history is substituted forcopies of the actual claims, a detailed explanation of each fieldon the claims history shall be provided.
19.4Documentaryevidence, i.e., work papers, calculations reflecting how the amountof the overpayment was determined, establishing how the overpaymentwas identified and the basis for the erroneous TRICARE payment,including copies of checks and EOBs for both the erroneous paymentand the correct payment, and documentation such as proof of Medicareeligibility, proof of OHI (EOB from the OHI reflecting what theOHI paid for, the relevant care and the name of the OHI, policynumber and the effective dates of coverage), signed Promissory Note,etc.
19.4.1The contractor shall documentefforts to obtain check copies, when a check copy cannot be obtained: and,include the documentation in the file. Normally cases shall notbe forwarded without check copies and EOBs.
19.4.2The contractor shall, whenit has determined that a check copy or EOB cannot be obtained, document effortsmade to obtain it and include it in the file.
19.4.3The contractor shall notifythe DHA OGC by facsimile within five business days of the date it determinedthat the documentation could not be obtained and provide the RCN,claim number, check date, provider name, patient name, sponsor SSNand date(s) of service.
19.4.4If DHA OGC cannot obtain therequired check copies or EOBs, DHA OGC will advise the contractorto forward the file without them.
19.4.5The contractor shall includein the case file to DHA OGC the following documents:
19.4.5.1Copies of checks and EOBs showingpayment made to correct the erroneous payment, if any. When therecoupment is the result of a duplicate payment, copies of the checkand EOB for the original payment and the copies of the check andthe EOB for the duplicate payment shall be included in the file.When the recoupment is the result of a Medicare reversal or adjustment,copies of the corrected Medicare EOBs shall be included in the file.
19.4.5.2Copies of all demand letterssent to the debtor, which must provide a full explanation of the circ*mstancessurrounding the erroneous payment.
19.4.5.3Copies of all correspondencereceived from the overpaid party or their representative relatingto the recoupment case and the contractor response.
19.4.5.4Copies of all EOBs reflectingcollections by offset and copies of all payment acknowledgment letters issuedto debtors.
19.5The contractorshall maintain a tally sheet reflecting the original amount of thedebt, each offset taken, and the balance remaining after each offset.Documentation shall be included in the recoupment case file thatthe offset flag has been removed. The documentation may be a copyof the contractor’s internal form to direct removal of the offsetflag.
19.6The contractor shall referall cases to DHA OGC within five business days after the offsetflag has been removed.
19.6.1The contractor shall providea password protected email, which lists the following information-- Debtor Names, ID, Amount Sent to DHA, and Sent Date -- of thecases being transferred, prior to the transfer of each batch ofrecoupment cases, to DHA OGC. This list will ensure DHA OGC andthe contractor are in sync with the cases transferred.
19.6.2The contractor shall transfereach batch of recoupment case files, in their entirety, to DHA OGC,via compact disc (CD).
19.6.3The contractor shall provideby hard copy, the following from each case file of the batch ofrecoupment cases being transferred:
•Coversheet
•DHA Transfer Cover Letter
•Debtor Transfer Letter
•Contractor Transfer File Summary
19.6.4The contractor shall make sureall imaged copies of DHA records are legible.
19.6.5The contractor shall encryptall transferable electronic media devices containing records withPII/PHI in a manner that is compatible with DHA environment.
19.6.6A completed cover sheet containingdata fields necessary for entry of the case into an automated case recoupmentsystem (see Addendum A, Figure 10.A-13). Incomplete orincorrect cases that are transferred to DHA will be returned tothe contractor for correction.
19.7The contractorshall account for returned cases on the Accounts Receivable SummaryReport.
19.8The contractor shall depositall refund checks in accordance with the instructions in Chapter 3, Section 3.
19.8.1The contractor shall, whena refund check is to be applied to a recoupment case which has been referredto DHA OGC, forward the amount received to DHA CRM along with informationidentifying the payee and account being paid.
19.8.2The contractor shall notifythe DHA OGC of the receipt of the payments within one business dayafter receipt.
19.8.3The contractor shall furnishidentifying information to the DHA OGC as to how the funds were transferred,including the check number, date, amount, and the page number bycompleting the Collection Made by Offset/Refund Form (Addendum A, Figure 10.A-31).
19.8.4The contractor shall not delaynotifying the DHA OGC that a payment has been received pending transferof the funds. If the DHA OGC determines that the contractor hasreceived a refund, the request for identifying information on thetransfer of funds should be responded to the following businessday.
19.8.5The contractor shall, for debtsof $600 or more, establish, maintain, and retain for one year, orthe term of their contract, whichever is longer, files containingall documentation pertaining to the recoupment cases which havebeen referred to DHA.
19.8.6The contractor may maintainsuch files for debts below $600. Retention of the files will allowthe contractor to fully respond to all questions generated by DHAOGC, as a result of the contractor’s referral of a recoupment caseto that office.
19.8.7The contractor shall respondwithin one business day to questions directed to them by DHA OGC. Additionally,the creation and retention of fully documented recoupment case fileswill facilitate responses to debtors’ inquiries and requests foradministrative reviews.
20.0STATE OR LOCAL GOVERNMENT DEBTS
The contractor shall refercases valued at $600 or more to DHA OGC for collection in accordancewith paragraph 16.2. Offset is not to be appliedwith respect to debts owed by state or local governments. All otherprocedures apply.
21.0OFFSET REQUESTS FROM DHA COMPONENTS
21.1The contractor shall, whenrequested to do so by a DHA component (i.e., Program Integrity Office(PI), OGC), initiate recoupment action and set an offset flag onan overpaid party to collect erroneous payments.
21.2The contractor shall complywith the instructions issued by DHA with the request. The instructionswill require one or more of the actions specified in paragraph 11.0.Normally, the requests will be made following resolution of an allegationof fraud or following a provider audit or as the result of an issuanceof a Final Decision in the appeal process.
21.3The contractorshall, at the direction of DHA PI, provide a nonparticipating provideran opportunity to refund an erroneous payment in those instanceswhere the nonparticipating provider has submitted a claim for serviceswhich were not provided or for incorrect payments, prior to initiatingrecoupment action against the beneficiary.
21.4This procedureshall only be allowed after the DHA PI, has determined that thecase will be resolved through administrative action. (Refer to Chapter13.)
22.0OFFSET REQUESTS FROM OTHERAGENCIES
22.1The contractor shall forwardany requests for offset from other agencies or orders for garnishmentissued by the court to DHA OGC within five business days.
22.2The contractor shall offsetTRICARE claims to collect debts owed other federal agencies onlywhen instructed to do so by DHA OGC. This paragraph does not applyto the federal tax levies.
23.0INFORMATION TO BE INCLUDEDIN REFUND REQUESTS
23.1The contractor shall, for refundrequests, include a letter in a pre-addressed return envelope withthe following claim and payment information:
23.1.1Name and Address of the Beneficiaryand Provider.
23.1.2Last four digits of Debtor’sSSN.
23.1.3ICN or RCN.
23.1.4Date(s) and Type(s) of Service.
23.1.5Principal Amount of Debt.
23.1.6Date(s) of Check(s).
23.1.7Amount(s) of Check(s).
23.1.8Name of Payee.
23.1.9A clear explanation of whythe payment was not correct.
23.1.10The amount of the overpaymentand how it was calculated, and the amount of the correct payment,if any.
23.1.11A notice that the overpaidparty is required to refund the overpayment, or make acceptable arrangementsto make the refund, within 30 calendar days of the date of the request.The notice should include:
23.1.11.1Interest will begin to accruefrom the date of the letter at the then current rate set by theUnited States (US) Department of the Treasury.
23.1.11.2Accrued interest will be waivedif payment is received within 30 calendar days.
23.1.11.3Administrative costs will alsobe assessed for expenses in collecting the debt.
23.2A penaltycharge of 6% per year will be assessed on any portion of the debtthat is delinquent for more than 90 calendar days and will accruefrom the date that the debt became delinquent.
23.3The contractorshall obtain the current interest rate as published in the FederalRegister. Interest is to be applied under criteria set forthin paragraph 32.0.
23.4A noticeof the possibility of offset if the overpayment is not refunded.
23.5Instructionsthat the refund shall be by check or money order made payable tothe contractor.
23.6A notice where appropriate(see sample letters, Addendum A, Figure 10.A-4 through Figure 10.A-11 and Figure 10.A-16),that unless a refund is made the case shall be referred to DHA OGCfor further recovery action which can include referral to a creditreporting agency and the assessment of added administrative costs,penalties and interest.
23.7A request where appropriate(see sample letters, Addendum A, Figure 10.A-8 through Figure 10.A-11), that the debtor provide hisor her SSN/TIN.
23.8An explanation as to rightsfor an administrative review and to appeal rights (see paragraph 26.0).
24.0CONTRACTOR RESPONSES TO DEBTORS
The contractor shall respondto any communication from the debtor within 30 calendar days fromits receipt.
25.0INSTALLMENTREFUNDS
25.1The contractor shall collectrecoupment claims in one lump sum whenever possible. However, debtors mayrequest repayment of a debt in monthly installments.
25.1.1The contractor shall assurethat the debt is amortized to completely refund the overpaymentwithin 24 months and before installment repayment agreements aremade.
25.1.2Debtors will be encouragedto repay the debt in monthly installments of no less than $50.
25.1.3The contractor may, if thedebt can be repaid within 24 months at the interest rate properlyreflected in the initial demand letter, accept lower monthly payments.If it is alleged by the beneficiary that monthly installments cannotbe made to complete the refund within 24 months, the debtor willbe asked to complete a financial affidavit in accordance with paragraph 28.0,and the completed affidavit, along with the case file and the debtor’srequest and the contractor demand letter(s) shall be transferredto DHA.
25.2The contractorshall amortize the debt over a 24 month period (or less, if requestedby the debtor), including interest on the unpaid balance at theappropriate interest rate, to determine the monthly installment amount,and assure that repayment can be made within the 24 months allowed.The use of commercial programs to perform this function is alsoacceptable.
25.3The contractor shall, onceit has computed the amount required each month to repay the debtin 24 regular monthly installments, if the principal amount of thedebt exceeds $600, complete the Promissory Note (see Addendum A, Figure 10.A-12) and send to thedebtor for his or her signature (see Addendum A, Figure 10.A-22).
25.4If the debt is $600 or below,only a letter (see Addendum A, Figure 10.A-19) need be sent toestablish the repayment agreement.
25.5The followinginformation is provided to assist the contractor in completing thePromissory Note:
“The principal sum of _________dollars” is the amount of the overpayment that has not been refunded,either voluntarily by the debtor or by contractor offset.
25.6Interest accrues from the dateof the initial demand letter which advised the debtor of his rightspursuant to the Debt Collection Act of 1982 (Addendum A, Figure 10.A-4 or Figure 10.A-5).Interest shall be assessed at the rate that was in effect when theinitial demand letter was mailed and that was properly reflectedin that letter. DO NOT assess interest until the debtor has beenproperly advised of his rights. Note that the initial demand lettermay be sent January 1, 2012, and the debtor may request an installmentagreement five months later (June 1, 2012) or at any time beforethe case is referred to DHA in accordance with paragraph 19.0.Interest in all cases accrues from the date of the initial demandletter. (See Addendum A, Figure 10.A-20 for an exampleof interest calculations on a $1000 overpayment, with an annualinterest rate of 8%. In the example, the initial demand letter wassent January 5, 2012.)
25.7The interestrate varies, dependent upon the current value of funds to the USTreasury (see Section 2). Once a debtor has establisheda repayment agreement, the rate of interest on THAT debt does notchange, regardless of changes in the value of funds to the US Treasury.
25.8Installment payments shallbegin approximately 30 calendar days after the request for an installment repaymentagreement is made. If a debtor requests the agreement on March 1,2014, his first installment will normally be due April 1, 2014.
25.8.1The contractor may set allinstallments due the first day of the month. If that is the case,and a debtor requests the arrangement on March 5, 2014, his or herfirst installment will be due April 1, 2014. If the debtor requeststhe arrangement on March 29, 2014, his or her first installmentshould be due May 1, 2014.
25.8.2The contractor may choose tospread out payments throughout the month, to even the workload.For consistency, do not require payments on the 29th, 30th or 31stof the month, since February normally has only 28 days.
25.9The phrase “not less than _____dollars beginning on ___,” is repeated in the Promissory Note toallow for an occasional debtor who, for example, wishes to pay oneamount for six months and another amount for the last 18 months.The request may be for any number of personal reasons, i.e., a carloan may be repaid in six months and the debtor will have additionalfunds from which to repay TRICARE.
25.10The contractoris encouraged to be flexible in establishing a repayment agreement;however, repayment must be scheduled for completion within 24 months.If the same amount is to be paid for the entire term of the note,delete the second phrase from the note.
25.11The contractorshall, if the Promissory Note is not returned, or is returned unsigned,but the debtor makes the scheduled payments, treat the account asthough the Promissory Note had been signed and returned.
25.12The contractor shall acknowledgeeach payment received in writing and must advise the debtor of the amountreceived, the portion of each payment that was applied to interestand to principal, and the current balance due. The acknowledgmentshall advise the debtor that the information provided may be usefulin the preparation of his or her income tax return (see Addendum A, Figure 10.A-21).
25.13The contractor shall maintainfinancially underwritten installment payments. Non-financially underwrittenrelated installment payments shall be reported to DHA. Details forreporting are identified in DD Form 1423, CDRL, located in SectionJ of the applicable contract.
25.14The contractorshall, when the recoupment action is completed, process the collectionaction using a single transaction for each claim involved.
25.15The contractor shall removethe offset flag, when the debtor enters into an installment repayment agreement.Any suspended claims shall be processed and paid normally. If thedebtor requests continuation of the offset, any amounts so collectedshall be treated as an installment payment.
25.16The contractor shall send awritten notification of delinquency to the debtor not later than35 calendar days after the established due date if an installment,or any portion thereof, remains outstanding (see Addendum A, Figure 10.A-15).
25.16.1The contractor shall forwardthe case file, including all supporting documentation to DHA OGC,if the delinquent amount is not remitted within 30 calendar daysof the initial delinquency notice, and the amount remaining dueon the account is $600 or greater.
25.16.2The contractor shall, if thedebtor fails to bring the account current, but remits the missedinstallment, or a portion thereof, retain the case.
25.16.3The contractor shall not transfercases to DHA until two full installment payments are past due. For example,a debtor may miss one payment entirely, but make all subsequentpayments, and remain one month behind for the term of the agreement.The case would not be transferred to DHA.
25.16.4The contractor shall advisethe debtor of the case referral to DHA and shall be told that futurepayments should be sent to DHA CRM (see Addendum A, Figure 10.A-24).
26.0RECOUPMENTACTION AND THE APPEALS PROCESS
26.1The determinationthat an overpayment was made is not, in itself, an appealable issue.When a contractor receives a request from a debtor for an administrativereview, the procedures outlined in paragraph 29.0 shall be followedto assure that, when appropriate, the debtor receives a reconsiderationas outlined in Chapter 12.
26.2If a service or supply whichis not a TRICARE benefit was paid in error, the reversal of thepayment decision constitutes an initial adverse determination. Theoverpaid party may appeal if an appealable issue exists. Such appealsare subject to the requirements and time limits outlined in Chapter12.
26.3The contractorshall, when the overpayment arises because inpatient mental healthcare was erroneously paid, advise the debtor that retroactive approvalof the days paid may be requested from the TRICARE mental healthreview contractor (see the TRICARE Policy Manual (TPM), Chapter 7, Section 3.1).
26.4The contractor shall identifyand properly account for any funds recouped by offset after a reconsiderationhas been requested.
26.4.1The contractor shall notifythe appealing party in writing within five business days of receiptof the reconsideration request that the recoupment of the overpaymentshall continue by offset.The contractor shall not terminate theoffset action because of an appeal unless directed to do so by DHA.
26.5DHA OGC will, when a requirementto recoup TRICARE funds is identified in a Formal Review Decisionor a Final Decision resulting from a hearing, forward the case tothe appropriate contractor for development and initial recoupmentaction in accordance with this section.
26.6The contractorshall return the case to DHA OGC in accordance with paragraph 16.0 ifthe contractor is unsuccessful in collecting the debt.
27.0OFFSET RECOUPMENT/PARTIAL PAYMENT
27.1If the debtor is a hospitalsubject to the Diagnosis Related Group (DRG)-based payment system,offsets may be taken not only against claims on which payment wouldbe issued to the debtor hospital, but also against annual paymentsdue to debtor hospital as reimbursem*nt for its Capital and DirectMedical Education (CAP/DME) costs. If the full amount is recoupedthrough offset, an adjustment claim shall be reported with the currentclaim or in the next payment run. If the receivable was writtenoff, it shall be reversed. If the receivable was transferred to DHA,immediately notify DHA OGC telephonically and follow up by letterwithin two business days after the telephone call. Also, reversethe transfer transaction on the next Accounts Receivable Report.
27.2The contractor shall applythe amount of offset to the interest first and then to principal,as installment payments are applied, if a debtor has entered intoan installment repayment agreement and has asked the contractorto continue to offset against future claims Generally, though, offsetamounts shall be applied only to principal.
27.3The contractor may considerthe debt paid in full, if it is practical to do so when a debt hasbeen paid either by offset, partial payment or installment payments,to within $10.00 of the total amount due, including interest, ifapplicable.
27.4The contractor shall advisethe debtor, if the contractor chooses to consider the debt paidin full when the balance has been reduced to $10.00 or less.
28.0REQUESTSFOR RELIEF OF INDEBTEDNESS
The contractor is not authorizedto compromise or to suspend or terminate collection actions on federalclaims. Requests for relief based upon financial hardship shallbe handled in accordance with the paragraphs below. Requests forsuspension of recoupment action pending the outcome of an appealfiled in accordance with 32 CFR 199.10,shall be forwarded to the DHA OGC.
28.1AccountBalance Of Less Than $600
28.1.1The contractor shall, whendebtors request relief from all or a portion of their indebtedness,including requests for relief from the assessment of interest, penalties,and administrative charges, remove the offset flag and ask the debtorto complete a Financial Affidavit (see Addendum A, Figure 10.A-23 and Figure 10.A-25).
28.1.2The contractor shall notifythe debtor that consideration cannot be given to his or her requestfor relief unless the completed Financial Affidavit is returnedwithin 30 calendar days.
28.1.3The contractor shall resetthe offset flag and continue recoupment action as though no requestfor relief had been made if the debtor fails to return the completedFinancial Affidavit within 30 calendar days.
28.1.4The contractor shall, whenthe completed Financial Affidavit is received, forward the affidavit,along with a copy of the demand letter(s), and the debtor’s requestfor relief to the DHA OGC.
28.1.5The contractor shall resetthe offset flag and proceed with normal recoupment procedures, ifdirected to do so by DHA, following the review of the debtor’s requestfor relief.
28.2AccountBalance Of $600 Or More
28.2.1The contractor shall removethe offset flag upon receipt of a request for relief from indebtednessand ask the debtor to complete a Financial Affidavit.
28.2.2The contractor shall notifythe debtor that consideration cannot be given to his or her requestfor relief unless the completed Financial Affidavit is returnedwithin 30 calendar days.
28.2.3The contractor shall referto DHA OGC for resolution the completed financial affidavit andthe entire recoupment case as outlined in paragraph 19.0.
28.2.4The contractor shall, if thedebtor fails to return the completed Financial Affidavit within30 calendar days, reset the offset flag and continue recoupmentaction as though no request for relief had been made. This paragraphdoes not apply to the automatic waiver of interest on accounts paidwithin the first 30 calendar days.
28.2.5The contractor shall, oncea case has been established, stop or amend a recoupment action,as necessary, to correct a contractor error.
29.0ADMINISTRATIVEREVIEW OF INDEBTEDNESS
29.1The contractor shall, if adebtor requests an administrative review of his indebtedness, reviewthe documentation contained in the case file and any additionalinformation or documents submitted by the debtor.
29.1.1The contractor review shallbe conducted by someone in a position of higher authority withinthe contractor than the individual who originated the recoupmentaction.
29.1.2The contractor shall notifythe debtor of the administrative review outcome within 30 calendardays of receipt of the administrative review of indebtedness request.
29.1.3The contractor shall referthe debtor’s request for review to the appropriate unit within thecontractor for issuance of a Reconsideration pursuant to 32CFR 199.10, when the debtor questions a contractor determinationthat the care is not a covered benefit, unless the issue is notappealable under the provisions of Chapter12, or the recoupment action was initiated for one ofthe following reasons:
•TRICARE payment was issuedwithout regard to OHI or pharmacy benefit plan, or the TRICARE liability,after taking into consideration payments made by OHI or pharmacybenefit plan, was inaccurately calculated.
•The action was initiated torecoup a duplicate payment.
•The action was initiated becausean error was made in the original determination that a claim wasa participating or a nonparticipating claim.
•The action was initiated becausethe payee was incorrect.
29.2The contractor shall, basedupon the above instructions and if it is inappropriate to providethe debtor a reconsideration, issue a response to the debtor’s requestfor administrative review.
29.2.1The contractor shall describein the response the documentation reviewed, including any submittedby the debtor, and explain the reviewing party’s rationale for thedecision to pursue or terminate the recoupment action.
29.2.2The contractor’s response shallexplain that further administrative appeal is not available.
29.2.3The contractor shall advisethe debtor, if the review results in a decision to recoup the overpayment, thatfull payment or other satisfactory arrangements for repayment mustbe made within 30 calendar days. A debtor’s request for an administrativereview of his or her indebtedness does not result in suspensionof the accrual of interest from the date of the initial demand letter.
30.0SUSPICION OF FRAUD
30.1The contractor shall not honora refund request if there is reason to believe that the overpaymentmay have been caused by fraud, until the fraud issue is resolved.
30.1.1The contractor shall retainany amount voluntarily refunded pending resolution of the fraudissue.
30.1.2The contractor shall depositfunds in the TRICARE account and maintain an accounting record capable ofaudit.
30.1.3The contractor shall send documentationof the refund and all other evidence relating to the case to DHAPI. Any recoupment action shall be taken in accordance with Chapter13.
30.2Once adetermination has been made that a case shall not be prosecutedfor fraud, the DHA OGC will return the suspected fraud case to theappropriate contractor for development and recoupment under thissection.
30.2.1The contractor shall, if therecoupment action is successful, notify DHA OGC by telephone withinone business day of the final collection and follow-up with writtennotification within three business days.
30.2.2The contractor shall returnthe case to DHA OGC in accordance with paragraph 19.0 if the contractoris unsuccessful in collecting the debt.
31.0CONTRACTOR TRANSITIONS
See Chapter 2, Section 10.
32.0INTEREST,PENALTIES AND ADMINISTRATIVE COSTS
32.1The contractorshall notify the debtor in the initial demand letter that interestwill accrue from the date of that letter. The rate of interest tobe assessed is the US Treasury Current Value of Funds Rate. TheDepartment of the Treasury publishes a new rate pursuant to Section11 of the Debt Collection Act of 1982, as Amended (31 USC 3717).
32.1.1The contractor shall obtainthe current rate as published in the Federal Register.The Treasury’s rate may change on a quarterly basis if the rolling12 month average used for calculating the rate changes by two percentagepoints. However, the collection of interest shall be automaticallywaived on the debt or any portion thereof which is paid within 30calendar days after the date of the initial demand letter.
32.1.2The contractor is not authorized,under any other circ*mstances, to waive a debt or any portion ofa debt owed the US Government.
32.2The contractorshall notify debtors in the initial demand letter that a penaltycharge, not to exceed 6% per year, will be assessed upon any portionof the debt that is delinquent for more than 90 calendar days, andthat administrative costs, (based upon those costs incurred in processingand handling the debt because it became delinquent) will also beadded to their indebtedness.
32.3The contractorshall not assess administrative costs and penalties (DHA will assessadministrative costs and penalties).
32.4The contractorshall assess and collect interest only when the debtor enters intoan installment repayment agreement as described in paragraph 25.0.The rate of interest assessed shall be the rate properly reflectedin the initial demand letter mailed to the debtor. The rate of interestassessed shall be the rate of the current value of funds to theUS Treasury; i.e., the Treasury Tax and loan account rate. Eachinstallment payment shall be applied first to the accrued interestand then to the outstanding principal balance.
32.5Interest will not be assessedupon previously accrued interest charges. When the debtor and the contractorenter into an installment repayment agreement, interest will beassessed for the period beginning on the date of the initial demandletter and ending on the due date of the first installment payment.The interest shall be assessed at the rate properly reflected inthe initial demand letter on that portion of the debt which remained outstanding30 calendar days after the date of the initial demand letter. Theinterest so assessed will be collected and applied to the debtor’saccount before the due date of the first installment payment. Subsequently,interest shall be computed daily on the outstanding principal balanceat the rate properly reflected in the initial demand letter, whichshall also be reflected in any Promissory Note sent to the debtoras required by paragraph 16.2.7.
32.6The contractorshall report interest collected under installment agreements toDHA monthly with unidentified refunds and refunds $10.00 or less.The rate of interest, as initially assessed, shall remain fixedfor the duration of the indebtedness, except that where a debtorhas defaulted on a repayment agreement and seeks to enter into anew agreement, a new interest rate may be set which reflects thecurrent value of funds to the Treasury at the time the new agreementis executed.
32.7The contractor shall handledelinquent installment accounts in accordance with the proceduresoutlined in paragraph 25.0.
33.0OVERPAYMENTSTO DVA/VHA FACILITIES
33.1Overpayments to DVA/VHA facilitiesare not subject to the above procedures.
33.1.1The contractor shall, whenthe contractor identifies an overpayment to a DVA/VHA facility,notify the facility and request repayment to the TRICARE Program.
33.1.2The contractor shall not offsetfunds due to DVA/VHA under any circ*mstances.
33.2The contractor shall, uponidentification of an overpayment issue written notice of the basisfor the overpayment to the applicable DVA/VHA facility, includinga request for repayment of an amount due,. The facility will acknowledgereceipt within 90 calendar days of the contractor’s notification.In addition, the facility’s acknowledgment will contain any claimdisputes, to include the basis for the overpayment or the calculationof the refund. The facility may request additional time to investigatepotential disputes.
33.3The contractorshall refer the case to DHA OGC, if the facility does not respond,or the contractor cannot resolve a claim dispute. If the facilitydoes not submit a claim dispute, DVA/VHA will refund the amountdue within 180 calendar days from the written notification. Uponresolution of a claim dispute, if appropriate, the DVA/VHA willissue a refund within 180 calendar days.
33.4The contractorshall provide a monthly status report of all DVA/VHA overpaymentcases. Details for reporting are identified in DD Form 1423, CDRL,located in Section J of the applicable contract.
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