You Received a Tentative Notice of Overpayment: Now What?

You are a health care provider that accepts Medicaid.  You received a Tentative Notice of Overpayment from North Carolina Department of Health and Human Services (DHHS), Division of Medical Assistance(DMA), Program Integrity (PI). You owe a million dollars (or whatever amount…it may as well be a million, right?) to DHHS and it must be paid within 30 days. First, you cry (“Why me?”), then you get angry (“Why do they say I owe this?” or “My documents are compliant!”), then you get scared (“What am I going to do?”).

So what do you do after getting this Notice?

Obviously, my official advice is to immediately call a lawyer; however, if for some reason, obtaining a lawyer is not an option, do you opt to appeal:

Formally or informally?

In DHHS or the Office of Administrative Hearings (OAH)?

Challenging the extrapolation or the decision?


If you can obtain a lawyer, do so. (Not necessarily me. Just someone).

If a lawyer is out of the question, for whatever reason, and you do not have the millions (or whatever amount DHHS claims you owe) sitting under your mattress, appeal. Appeal whatever. Appeal however. Just appeal.

An appeal maintains status quo. An appeal allows you to by time to figure out your options. An appeal makes you keep your money for a longer period of time before turning any amount over to DHHS.

What not to do:

  • Do not pay the entire amount.
  • Do not agree to set up a payment plan.
  • Do not think, “Oh, DHHS is right. My documents are out of compliance.”

If you appeal the amount supposedly owed will decrease. If you agree to pay, the amount will not decrease.

Now, what to appeal?

Personally, I prefer to appeal the decision, not the extrapolation. If you appeal the extrapolation, first, you have to do a lot of math. And who wants to do a lot of math? Secondly, you end up dealing with PI  in an informal and amorphous proceeding.  Dealing with PI during this amorphous proceeding is a bit like playing dodge ball…alone.  Thirdly, by appealing the extrapolation you are only delaying getting an Attorney General (AG) involved and any sort of formal proceedings.  Surprisingly enough, the whole process becomes easier when an AG is assigned.  They actually know how to maneuver through this system.

So, you appeal the decision…

Formal appeal or informal appeal?

In DHHS (informally) or OAH (formally)? I, myself, have pondered this for hours.  I’ve never received a decision from a DHHS Hearing Officer that I have not appealed.  So, my first instinct is, go straight to OAH.  In fact, I’ve blogged about that before.  But after more consideration, I actually think it is a good decision to go through the reconsideration review.

(1) It provides time to get to know the documents. If you go straight to OAH you will have to learn all the documents faster and in a more formal setting.

(2) There  may be an argument that providers MUST exhaust the LME-MCO Appeal Process (“Reconsideration”) before accessing the State Fair Hearing (or Appeal to OAH).

While I am unsure whether the issue of whether providers must exhaust informal remedies before attempting formal remedies has been decided by a court of law, because a Medicaid recipient is required to go through an informal appeal first, I would think the same would apply to a provider. Plus, because clients pay me good money, I have been unwilling to “take a risk” with my clients’ money. I’d hate to go that route and be told I did it wrong. Besides, it’s been working this way.

So, there you go.

The moral of the story? Appeal, appeal, appeal.


About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on April 5, 2013, in Appeal Deadlines, Division of Medical Assistance, Health Care Providers and Services, Legal Analysis, Medicaid, Medicaid Appeals, Medicaid Audits, Medicaid Recoupment, NC DHHS, North Carolina, Petitions for Contested Cases, Program Integrity, Tentative Notices of Overpayment and tagged , , , , , , , . Bookmark the permalink. 3 Comments.

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