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You Receive a Notice of Overpayment Findings: Do You Have an Expert on Deck?

April 06, 2021
Documentation, Billing, & Coding By Zenobia Knight

During much of the Covid-19 pandemic, payers placed audits on hold or significantly reduced medical record requests. Now, there is increased activity of medical reviews by Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RAC), Unified Program Integrity Contractors (UPIC), and commercial payers. In addition, providers are receiving audit findings from documentation submitted months ago, and in some cases as far back as the fall of 2019!


Next Steps

When a notice of overpayment is received as a result of a RAC or UPIC audit, what are the first steps? Keep in mind RACs and UPICs send the provider notification letters with overpayment amounts which are then submitted to the provider’s local MAC for recoupment of the overpayment. Immediate action is important while the provider awaits the demand letter from the MAC regarding specifics of the overpayment and the repayment process. Providers have an opportunity to proceed with the appeal process, although appeal submissions cannot begin until the demand letter notification has been issued to the provider by the MAC. Thorough review of the notice of overpayment from the RAC or UPIC is essential. It is equally as important to discuss the notification with a consultant with specialization in appealing denied healthcare claims. Consider having the consultant retained by your attorney so that work products can be discussed under attorney-client privilege.

Why Do I Need to Pay Consultants and Attorneys?

  • An expert review of the Notice of Overpayment Findings letter may provide material defense for the appeal letters. For example, it is important the RAC or UPIC apply the correct billing standards when explaining the reason for denying the claims. Perhaps the auditor applied physician statues when reviewing therapy claims. If the incorrect billing standards were applied, immediate action may thwart the denied claims ending up in the 2-year Administrative Law Judge (ALJ) Appeal backlog.
  • The provider will be given an excel spreadsheet which typically provides claims payment details by patient but also provides the denial reason details of each claim denied. It will be important that the consultant is familiar with the regulations to determine if the correct regulations were appropriately applied.
  • It is important to realize response timing and documentation presentation to payers are critical. Providers must understand the results of these audits can place the provider at higher risk for future audits. Keep in mind the payers may share error rate details with other government agencies and the provider’s initial response to the first overpayment letter may impact the future. The provider does not want the initial response process to result in increased payer audits.

What is the First Preventative Step?

Step 1: Before the demand letter from the MAC is received the provider should have a well-developed response plan, which includes an audit response team. The audit response team typically includes internal staff but should also include an expert consultant and a healthcare attorney specializing in appeals and overpayment.

Step 2: The provider must adhere to the timelines outlined in the demand letter. By putting a plan in place immediately upon receipt of the Notice of Overpayment Findings letter the provider will be able to respond timely to the demand letter.

There are several potential courses of action. Consultation with experts will be essential to explore your options and prevent recoupment of claims that were correctly paid. It is equally as important to prevent additional recoupment based upon extrapolation from a larger sample of medical records.

How Can LW Consulting, Inc. Help?

  • LW Consulting, Inc. (LWCI) consultants possess over 100 years combined expertise in reviewing Notice of Overpayment Findings and assisting with the appeals process.
  • LWCI works closely with providers’ healthcare attorneys in supporting the providers’ response, including detailed chart reviews and appeal response letters.
  • LWCI is retained by providers on an as needed, or PRN, basis in order to be able to take immediate action with providers since the timeline responses to audits are a critical step.


Did you receive a Notice of Overpayment Findings letter? LW Consulting, Inc. can help you
explore your options and develop a response plan.

Contact Us