Affiliated Providers and the Recoupment Process

Published 01/04/2021

When an overpayment is determined and a demand letter is sent to the provider notifying them of the amount owed to the Medicare program, if payment is not received within the specified time period all payments to the provider are recouped until the overpayment is collected. Recoupment of payments can also be made from "affiliated providers."

What Is an Affiliated Provider?
An affiliated provider is a provider that shares the same Tax Identification Number (TIN) and/or is part of a Hospital Group (i.e., sub-units).

CMS has the authority to adjust payments to related providers and suppliers on the basis of their tax ID number. Rules allow CMS to hold providers and suppliers with the same tax ID number, regardless of their billing number or NPI number, liable for the debts of "affiliated providers." CMS may reduce funds due to related providers and suppliers as long as they share a federal tax identification number. For example, one hospital in a hospital chain may owe money but lack the funds to repay. CMS can collect from any other hospital in the chain or from the parent company as long as the tax ID number is the same.

Remittance Advice
On the Electronic Remittance Advice (ERA), a code of "OA" is used for Part A Affiliated Withholdings and a code of "OB" is used for Part B Affiliated Withholdings. The affiliated withholding amount is reported in the total withhold of the payment recap section on the Standard Paper Remittance (SPR). This amount is the PLB amount associated with PLB03-1 when equal to "E3" and PLB03-2 = "C"*.

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