The Practitioner Connection
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CLAIM OFFSETTING PROCESS
When a claim is adjusted due to an overpayment, many times the claim will go through a process of being either offset or repayment being requested. This process can seem mysterious to the provider or billing office. While the process can take a few different turns, there is a basic process we follow for recovering overpayments.
The term “offset” is used to describe when money is held or taken back from a recently-processed claim. An offset could occur when a claim is adjusted and the adjustment reveals that the claim was initially overpaid to the provider. Adjustments occur for many different reasons, including a change in benefit plan, a change in eligibility for the member, or changes in state laws as examples.
State laws may impact how an overpayment is handled and whether or not offsetting can occur. The main process identified here is used for any self-funded plan, where state laws do not generally have an impact.
Our procedure is to allow 30 days for an offset to occur after an overpayment is identified. The new incoming claim would need to be for the same account (not necessarily the same member) and equal to or greater than the amount owed. Once this new claim is received the provider’s balance is then credited. If there is any additional money owed to the provider (due to the new claim being over the amount owed), a check will go out to the provider. An Explanation of Benefits is sent to the provider showing all the negative and positive adjustment and payment amounts.
If the negative balance from the adjustment is greater than the amount received within 30 days, an offset will not be pursued. Instead, the money that was held for a potential offset will be released (sent out by check.) The provider will then receive overpayment notices in regards to the amount owed.
If no new claims are received in the 30 day timeframe, the provider will receive overpayment notices at the end of the 30 days. Overpayment notices are sent every 30 days for 3 months or until a payment is received from the provider. During these 3 months, an offset is not allowed to occur and any new incoming claims will be processed and paid as normal. If a payment has not been received from the provider within 120 days of overpayment notices being sent, the offset process and holding back money will start again.
This is the basic outline of the process for any self-funded plans. Any plans that are not self-funded are subject to state laws. Each state has different mandates in handling overpayments and offsetting of claims. One state might not allow offsets to happen while another state might allow offsets to occur after a 30 day waiting period. If there is a question in regard to a specific claim that was offset or the handling of offsets, please call Cigna at the number on the back of the member's card.
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