Recoupments and Forwarding Balances
Recoupment is the recovery process by a payer of any outstanding monies owed back to the payer by the provider through reducing present or future payer payments to that provider and applying the amount withheld to the indebtedness.
Recoupment can be seen in the presence of a "Forwarding Balance" on the Remittance Advice. A Forwarding Balance is an amount on the Remittance Advice (RA) that shows the difference in the payment between the original claim and the overpayment/adjustment to the original claim. An FB will be on an RA any time a claim has been overpaid/adjusted. This amount does not reflect a withholding on this claim. Providers should receive a letter requesting this amount and instructions for a refund. If the refund is not received in approximately 45 days, the amount will be reflected as a “WO” on a future remittance.
When the adjustment shows a corrected payment of less than the original claim payment, An FB reflects a negative amount. When the adjustment shows a corrected payment of more than the original claim payment, the FB reflects a positive amount.
When you see an FB transaction on an RA, there are two possible scenarios:
- A previous overpayment can’t be recovered in full resulting in new a forwarding balance to be recovered from a future payment.
- An existing forwarding balance can’t be recovered in full resulting in a continuing forwarding balance to be recovered from a future payment.
Since recoupment applies to a prior claim, you should locate that claim and make additional entries in the Payment Application to reflect the updated information, e.g. a claim was previously paid in full with a payer payment of $100. However, the payer now states that the payment should have been just $70. You should update the original claim to show a total payer payment of $70 and a now open balance of $30 that will need to have a contractual adjustment, an additional payment from the patient, written-off, or other adjustments per your organization's workflow.
Please note that recoupments can be complex and it is a good idea to contact the payer to confirm the transaction details. The ERA itself often provides insufficient details on the reasons behind the recoupment. The clearinghouse portal can also be a good source of information about the ERA and any prior claims involved in the recoupment.
The RA should identify the associated FB with the Financial Control Number (FCN) that this adjustment relates to when the adjustment refers to a claim that appeared on a previous RA. This usually matches the ICN field of a previous claim. If the adjustment in question does not relate to a previous claim, this field is left blank.
To research checks in the EDI Portal:
- Go to the Claims tab
- Click on EDI Portal
- Click on the Manage Payments tab
- Select View Insurance Payments (Remittances)
- Search by Advanced Search (in the dropdown menu)
- Enter the Check # in the Check Number Field
- Click the Search button at the bottom of the screen
- Click on the claim line and it will open a Claim Detail Screen.
- Scroll to the bottom to see the message from the clearinghouse or the payer.
Also, be sure to trace forwarding balances and recoupments in the EDI Portal by Patient Account Number > Date of Service to search all instances of claim transactions:
- Go to the Claims tab
- Click on EDI Portal
- Click on the Manage Claims tab
- Click on the Search Claim History tab
- Enter your patient's account number in the Patient Account Number field and click Create Report
- Double click the claim DOS to open the claim details
- Scroll toward the bottom to find any hyper-linked Remit #'s and open/click/print
- Any Remit will most likely be tied into the transaction
Here is an online guide to posting Forwarding Balance adjustments:
Line of business filter: Select part B
Date range filter: last 30 days Set Filters
Then type "forwarding balance" in the Enter Search Keywords bar and click on the first link, "Medicare Part B Overpayments - Understanding Remittance Advice."
This animation is intended to help you understand the different remittance advice you will receive when a full or partial overpayment has been made. You can choose to walk through a full claim overpayment example or a partial claim overpayment example. Guides such as this one are available through CMS/Medicare websites and will allow you to become more familiar with their adjustment/offset practices. The flow will become more apparent and posting the adjustments will then become more simplified.
Once you have gathered all associated RA's from the EDI portal, locate the associated batch numbers in ProviderSuite and work each batch, continuing to keep each batch on HOLD. Do NOT Save. Once each batch has been worked/adjusted, follow the steps below to Combine the associated batches, which will balance your Takeback/Recoupment/Forwarding Balance. This is why your batches must be on Hold, in order to combine the batches.
Launch Billing Manager > Go to Payments > Payment Application > Batch > Open > All for User > All Users > Batch Filter > Unreleased Only > Created From/To > Refresh Batch List > This will generate a list of unreleased batches for you to select from. You can combine the associated batches from this list.
It is extremely important to be sure that the claim has been finalized before combining batches. If uncertain, call the payer. Once combined into one batch, all Takeback/Recoupment/Forwarding Balance transactions will appear together and balance the claim accordingly.
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