Recoupment
Recoupment is a payer's recovery of money already paid on a claim, typically by withholding from future payments rather than demanding repayment.
Updated
Recoupment is a payer's recovery of an overpayment by withholding all or part of the amount owed from future payments to the same provider, rather than requiring a direct refund. It is a collection mechanism — the payer recovers the debt out of money it would otherwise pay — and is distinct from the underlying overpayment decision that established the amount owed.
Medicare and other payers use recoupment after an overpayment has been determined, and the rules around notice, the timing of recoupment, and the provider's right to challenge or appeal vary by payer and by statute. A recoupment that begins before appeal rights are exhausted may be stayed in some circumstances, depending on the program and the stage of the appeal.
In practice
Because recoupment is taken from future payments, it can reduce or zero out a provider's incoming cash while an overpayment is being disputed, which makes the timing of any appeal meaningful, not just its merits. A practice facing recoupment needs to know both the overpayment basis and the recoupment schedule, and whether appeal or repayment halts the withholding.
Commonly confused with
- Overpayment: An overpayment is the amount paid in excess of what was owed; recoupment is the mechanism the payer uses to take that amount back out of future payments.
- Offset: Offset is the general term for applying one amount against another; recoupment is a payer's statutory or contractual recovery of an overpayment by offset against future payments to the same provider.