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Back  RFI # 325: PLB 72 Payor prev refunded ck

Formal vs. Informal Help Informal Formal

Submitter

Sharon Sieve

Description

We have a situation where a payer sent us a letter notifying us that they had overpaid a claim - it should have been denied. We had 60 days to return the overpayment by check. We sent the check. The payer then sent an 835 with a reversal of the original claim payment, but no correction claim. That 835 also contained a PLB adjustment using Adjustment Code 72 and a negative value for the amount of the check/overpayment. While this balanced the 835, the reversal and PLB entry caused a problem in our system that required manual entries in the patient's account and general ledger to repair. Is this how the 835 should be used in this situation?

Submitter Assigned Keywords

overpayment PLB 72

Response

The 4010 version of the 835 implementation guide (IG) does not explicitly address how to handle the different approaches to overpayment recovery. Section 2.2.8 in the guide states "When a claim is paid in error, the method for correcting it is to reverse the original claim payment and resend the corrected data." Sending a reversal without a correction is not consistent with that statement. In this case, the letter already performed the business function of the reversal and correction . Sending a second reversal is duplicative and inappropriate. The note on PLB Adjustment Reason Code "72" states "This adjustment should always be offset by some other PLB adjustment referring to the original refund request or reason." PLB Adjustment Reason Codes "72" and "WO" should have been used to report the check payment and overpayment recovery respectively.

Recommendation

This business is described in the 4050 version of the 835 IG in detail. See the Overpayment Recovery section in the 4050 guide http://www.wpc-edi.com/content/view/422/160/. This provides extensive information. The notice of an overpayment recovery can be done either by a letter or a reversal and correction pair in the 835. Once the letter was sent, the payer should not have sent the reversal. The payer also should not have sent a reversal without a corresponding correcting claim. Usage of code 72 in the PLB requires an offsetting PLB adjustment. In this case, that should have been a PLB entry using Adjustment Reason Code "WO", the reference number from the original letter and a positive value for the amount of the recovery. The PLB entry using code "72" should also report the same reference number from the original letter.
Submission 9/19/2005
Status Date 11/11/2005
Status F - Final
Primary References
Document 004050X124
Section835.PLB
Page201
Set ID2.2.1