Recoupment

A recoupment usually starts with an overpayment notice. The causes are familiar: a duplicate payment, coverage that was terminated retroactively, a COB change where another payer turns out to be primary, an audit finding on coding or documentation, or the payer’s own processing error. The notice asks for a refund by a date the payer sets. If the refund does not arrive, or the contract allows it outright, the payer offsets the amount against future payments. On the 835 the recoupment appears as a reversal of the original claim with negative amounts and as a provider-level adjustment at the check level, so the check total is less than the sum of the claim payments inside it.

Unposted offsets break the reconciliation. The claims in that check look underpaid, the original claim still shows as paid, and cash is short with no explanation on any account. Posting the reversal against the original account and the offset against the check keeps both the patient ledger and the deposit right. A recoupment can also be disputed; the window and the process are set by the payer, and by federal and state rules where Medicare and Medicaid are involved.

The mistake is ignoring the overpayment letter. Payers generally give you a window to dispute before they offset; once the offset runs, you are fighting to get money back rather than to keep it. Log every notice, decide refund or dispute within the payer’s window, and never let a reversal post as a generic adjustment that hides what happened.