More background to Question:
A PIP hospital provider received a demand letter requesting payment on a RAC DRG change that resulted in an overpayment. The provider agrees with the findings and will not appeal. Because the provider receives no monetary payments on inpatient claims individually (bi-weekly PIP payments occur), it is the providers belief that any adjustments to inpatient claims result in updating the Provider Statistical and Reimbursement (PS&R) and then the overpayment will be accounted for at the time of cost report settlement. If the provider issues a check to Palmetto GBA and the claim is also adjusted in the FISS system, will we not be repaying the amount twice, both in the check issued and then upon cost report settlement?

Answer:
According to Change Request (CR) 7601, the PS&R is supposed to segregate and exclude RAC-initiated adjustments to PIP claims. Therefore, the provider may send in payment for the demanded overpayment. They will not get hit twice when the cost report is settled, since it will be excluded from the settlement calculation. If the provider does not want to send in a check, an accounts receivable (AR) will be created and Palmetto GBA will send a demand letter for RAC adjustments. In this case, we would offset against the PIP payment to collect the debt. Providers need to be aware that if the offset collection isn’t enough to fully collect the debt, interest could accrue.

There is also the option of requesting an immediate offset on all future ARs or specific ARs. If providers select this option, they will still receive the demand letter to let them know a debt has been incurred; Palmetto GBA will then offset the debt from future PIP payments.

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