Overpayments

Payment Withholding Information

What Is a Payment Withholding?

An act that occurs when a percentage of payment or set dollar amounts is deducted from the payment to the provider during claim processing. Provider level adjustment reason codes explain the basis for the withholding adjustment.

Why Are Payments Withheld?

Often, providers are uncertain why payments are withheld or suspended and they contact the National Government Services Provider Contact Center for further explanation. However, you can often find the answer you are looking for by researching the reasons for the withholding (and the financial impact) on the Medicare remittance advice.

Typically, payment withholdings that create receivables can be grouped into the following categories:

  1. Penalty withholding reflects suspension of payment (and demand for repayment) due to unfiled cost reports, rejected cost reports, unfiled/unacceptable credit balance reports, administrative freeze, bankruptcy, fraud and abuse (Program Safeguard Contractor request), returned mail “Do not forward,” or other CMS request.
  2. Cost report settlement receivables reflect cost report settlements (tentative and final), Notices of Program Reimbursement, and lump sum adjustments and rate reviews resulting from the Audit and Reimbursement Department’s issuance of a demand letter. Instructions and forms for applying for an extended repayment plan are available from the Provider Resources > Forms section of our website.
  3. Claims accounts receivables applied to an existing claims receivable balance typically involves a provider-initiated cancellation or paid claims adjustments. No demand letter is issued and withholding is continuous on outstanding balances until fully paid.
  4. Aggregated claims accounts receivables are claims accounts receivables that have aged beyond 60 days and a demand letter is issued for the uncollected amount.
  5. Section 935 claims accounts receivables result from NGS-issued demand letters to recover post-pay Medical Review claims denials and Medicare Secondary Payer overpayment. The timing of these recoveries is subject to the limitations on recoupments—Section 935 in the Medicare Modernization Act of 2003.
  6. Recovery Auditor (RA) claims account receivables are the result of RAC-issued demand letters pursuant to the Tax Relief and Health Care Act of 2006. This involves providers (serviced by NGS) that made improper claims for health care services to Medicare beneficiaries under that law. Refer to CMS CR MM6870 for additional information regarding RA recoupments.
  7. Third party withholding for payment due other federal government agencies that issued demand letters for tax levies (Internal Revenue Service [IRS]), civil monetary penalties (CMS/Department of Justice [DOJ]).
  8. Affiliated withholding issued by NGS for payments due from a related health care provider.

Who Can I Contact for Further Assistance?

If you are still unable, after reviewing this information and your remittance advice, to resolve the issue related to the withholding, please contact the NGS PCC for further assistance.

Be sure to have the following information available:

  • The remittance advice
  • Your ten-digit NPI or six-digit provider number
  • The withhold line item description, reason code, issuance date, and dollar amount

What About Cost Report Interim and Final Settlement Withholdings?

For cost report rate reviews and settlements involving overpayments, a demand letter is issued with detailed instructions on repayment options. This information should be reviewed without delay as withholdings will begin on the 16th day after the demand letter date, unless alternative payment arrangements are approved.