Unfair Recoupment Practices Struck Down in Illinois

As providers, when we perform medically necessary services, we expect to be reimbursed for these services. Once reimbursement is received, it seems that the money is safe in the bank, but that was not always the case. Insurance companies could seemingly come into the picture anytime they want and recoup the money.  That was true until recently in Illinois, when the governor signed into law time limits for recoupment.

Some doctors received recoupment demands for claims paid as much as three years ago. Claims were sometimes extracted, which resulted in demands of several hundreds of thousands of dollars. Therefore, providers could never enjoy peace of mind, knowing that claims paid could be snatched back for whatever reason.

The Illinois chapter of the National Association of Social Workers introduced SB 1974 (Fine/Morgan) that, if passed, would change the recoupment time to 12 months. Insurance companies would be limited limit their recoupment demands to no more than 12 months after the claim was paid. The Illinois Chiropractic Society (ICS) supported this legislation.

SB 1974, as amended, passed both chambers unanimously. Governor Pritzker signed the bill, and it is now Public Act 102-0632. The new law will become effective on January 1, 2022. Beginning on January 1, 2022, an insurance company or other payer cannot request or withhold any amounts after 12 months from the original payment. Suppose an insurance carrier attempts to recoup amounts paid after the expiration of 12 months from the actual payment. In that case, you should assert the Public Act 12-month rule 102-0632 to mitigate the reduce the recoupment amount requested.

Keep in mind that in cases of fraud, this law will likely not help you. The prudent approach is to have a Certified Professional Compliance Officer (CPCO) audit your records to find the weaknesses to mitigate issues before they occur.

Ask Mario offers file audits and compliance coaching.