In medical billing, a recoupment is a payer recovering money it says it overpaid by taking it out of later payments. Medicare’s regulation defines recoupment as the recovery of an outstanding Medicare debt by reducing present or future Medicare payments and applying the amount withheld to the debt (42 CFR 405.370). The same regulation uses “offset” for a non-Medicare debt recovered out of Medicare payments, and “suspension of payment” for payment that is withheld before the amount of the overpayment has been determined. Other insurance companies set their own terms and deadlines, so check the payer’s provider manual and your contract.
For Medicare, recovery starts when the Medicare Administrative Contractor (MAC) sends a demand letter. The CMS fact sheet Medicare Overpayments (MLN006379, July 2025) gives these dates, counted from the date of the demand letter:
| When | What happens |
|---|---|
| Day 15 | Last day to submit a rebuttal. A rebuttal is not an appeal and does not stop recoupment. |
| Day 30 | Last day to pay in full to avoid interest. For an overpayment that is subject to the recoupment limitation, a redetermination request filed by Day 30 prevents recoupment from starting on Day 41. |
| Day 31 | Interest starts on an overpayment that was not paid by Day 30, whether or not an appeal has been filed. |
| Day 40 | Last day to pay in full before recoupment begins, for overpayments subject to the recoupment limitation. |
| Day 41 | The MAC begins standard recoupment, unless the overpayment is in an excluded category. |
| Day 120 | Last day to submit a first appeal (a redetermination request). |
The same fact sheet lists what a provider can do after a demand letter: pay right away, ask for immediate recoupment, submit a rebuttal, appeal by requesting a redetermination, or ask for an extended repayment schedule. Go by the dates in your own demand letter. This summary covers Medicare only.
A reversal and an actual recovery of money are not necessarily the same event. In CMS’s Medicare electronic remittance guidance, when recovery happens later, the reversal/correction negates the original payment and reports the new payment; the actual recoupment is reported in a separate step.[1]
Noridian’s Medicare Part B guidance gives a practical example: a forwarding balance (FB) reports a claim adjustment, not a recoupment. A withhold (WO) identifies money withheld from a remittance to satisfy an outstanding Medicare debt.[2]
Before treating an adjustment as money already taken back, compare the original payment, corrected claim, provider-level adjustments and any overpayment notice. Use the applicable payer’s instructions to reconcile what changed and whether funds have actually been recovered. The Medicare example above is not a universal code or timing rule for every payer.
Oftentimes, insurance companies will ask money back from you because they claim to have overpaid you. This obviously can be frustrating! Here are some of the pitfalls, and how you can avoid them:
Verify all coverage and which plan was primary for the date of service before rebilling. For patients with Medicare and other coverage, CMS describes coordination of benefits as the process that determines each plan’s payment responsibility. Finding another policy does not guarantee that it will reimburse the claim. Reconcile the original payment and any repayment request using the applicable payer’s instructions. Sources: CMS: coordination of benefits; UnitedHealthcare 2026 provider guide.
Check the policy’s effective and termination dates against the date of service. A replacement policy should not be billed simply because it is the patient’s current coverage. UnitedHealthcare notes that reimbursement depends on service dates, plan benefits and administrative requirements. Confirm the applicable coverage and patient responsibility before deciding whether to correct a claim or bill the patient. Sources: UnitedHealthcare 2026 provider guide.
Compare the payment and adjustment with the fee schedule and contract applicable to that service date. If you disagree with an overpayment request, follow the payer’s stated dispute procedure rather than relying on a phone call alone. UnitedHealthcare’s guide, for example, requires a notice of disagreement explaining the basis and supporting documentation within the applicable deadline. Sources: UnitedHealthcare 2026 provider guide.
Reconcile the claim, remittance and deposits to confirm whether a duplicate payment actually occurred. A confirmed overpayment may need to be returned even when your practice submitted only one claim. CMS states that providers are responsible for returning discovered Medicare overpayments to their Medicare Administrative Contractor; UnitedHealthcare also specifies a refund or notification process. If the requested amount is wrong, use the payer’s documented dispute route. Sources: CMS: Medicare overpayments; UnitedHealthcare 2026 provider guide.
Verify the intended payee, claim and payment amount before recording or returning funds. Contact the payer through its established process and retain the remittance and supporting records. For Medicare, CMS says a discovered overpayment must be returned to the Medicare Administrative Contractor with an explanation of its cause. Follow the relevant payer’s instructions and deadlines; do not assume a mistaken payment can be retained. Sources: CMS: Medicare overpayments; UnitedHealthcare 2026 provider guide.
Read the audit or documentation request carefully and provide the requested records within its stated timeframe. For Medicare chiropractic claims, CMS calls for documentation supporting the services billed and medical necessity, including the records specifically requested. Complete documentation does not guarantee a favorable decision. If an overpayment determination is disputed, follow the applicable appeal instructions and deadlines. Sources: CMS: chiropractic documentation checklist; CMS: Medicare overpayments.
For the most common reasons claims are denied, see common claim denial reasons. If you want help with the appeals process, our denied-claim appeals service covers that work.
Related billing support: accounts receivable follow-up.
Alex is a chiropractic billing expert, and helps chiropractors collect more revenue as Owner of eChiro Billing.
