New Demand Letter Process Affecting Auto-Cancelled RAPs

CMS issued Change Request (CR) 10776, which implemented a new demand letter process affecting auto-cancelled RAPs. Effective October 1, 2019, a demand letter is issued when an overpayment exists as a result of an auto-canceled RAP. RAPs are auto-canceled/recouped when the final claim is not submitted timely.

NOTE: If a RAP payment is recouped on your Remittance Advice (RA), which results in a negative balance because not enough other claims processed/paid to recover the RAP recoupment, a demand letter will be issued. Providers should determine if they anticipate that future claim payments will be sufficient to recoup the negative balance created by the auto-canceled RAP, or if it is more practical to follow the repayment options provided in the demand letter.

To prevent a demand letter, remember that it is important to submit your final claim within 120 days after the start date of the episode or 60 days after the paid date on the RAP. For assistance, refer to CGS’ Home Health Final Claim Timeliness Calculator to determine when the final claim needs to be submitted.