C.F.R. » Title 42 » CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES › SUBCHAPTER B—MEDICARE PROGRAM › PART 405—FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED › Subpart C—Suspension of Payment, Recovery of Overpayments, and Repayment of Scholarships and Loans

42 C.F.R. § 405.373

Proceeding for offset or recoupment

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(a) General rule. Except as specified in paragraphs (b) and (f) of this section, if the Medicare Administrative Contractor or CMS has determined that an offset or recoupment of payments under § 405.371(a)(3) should be put into effect, the Medicare Administrative Contractor must—

(1) Notify the provider or supplier of its intention to offset or recoup payment, in whole or in part, and the reasons for making the offset or recoupment; and

(2) Give the provider or supplier an opportunity for rebuttal in accordance with § 405.374.

(b) Exception to recouping payment. Paragraph (a) of this section does not apply if the Medicare Administrative Contractor, after furnishing a provider a written notice of the amount of program reimbursement in accordance with § 405.1803, recoups payment under paragraph (c) of § 405.1803. (For provider rights in this circumstance, see §§ 405.1809, 405.1811, 405.1815, 405.1835, and 405.1843.)

(c) Actions following receipt of rebuttal statement. If a provider or supplier submits, in accordance with § 405.374, a statement as to why an offset or recoupment should not be put into effect on the date specified in the notice, the Medicare contractor must comply with the time limits and notification requirements of § 405.375.

(d) No rebuttal statement received. If, by the end of the time period specified in the notice, no statement has been received, the recoupment or offset goes into effect automatically.

(e) Duration of recoupment or offset. Except as provided in § 405.379, if a recoupment or offset is put into effect, it remains in effect until the earliest of the following:

(1) The overpayment and any assessed interest are liquidated.

(2) The Medicare contractor obtains a satisfactory agreement from the provider or supplier for liquidation of the overpayment.

(3) The Medicare contractor, on the basis of subsequently acquired evidence or otherwise, determines that there is no overpayment.

(f) Exception to offset or recoupment of payments for shared Taxpayer Identification Number. Paragraph (a) of this section does not apply in instances where the Medicare Administrative Contractor intends to offset or recoup payments to the applicable provider of services or supplier to satisfy an amount due from an obligated provider of services or supplier when the applicable and obligated provider of services or supplier share the same Taxpayer Identification Number.

[61 FR 63747, Dec. 2, 1996, as amended at 74 FR 47468, Sept. 16, 2009; 81 FR 80551, Nov. 15, 2016]
Notes of Decisions
Cited in 16 cases (5 in the last 5 years), 1987–2025 · leading case: A1 Diabetes & Med. Supply v. Alex Azar II
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A1 Diabetes & Med. Supply v. Alex Azar II (2019) ca6 “42 C.F.R. § 405.373 ; Appellants’ Br. 1. If the government started recouping the millions of dollars that it allegedly overpaid A1 by deducting the amounts from new reimbursements, and if the company could not get a hearing to challenge the recoupment decision, A1 alleged that…”
United States v. Consumer Health Services of America, Inc. And Roger Schlossberg, Trustee (1997) cadc “To be sure, the latter alternative forms an executory contract, but it is not to be treated as would the post-petition performance of an ordinary executory contract under bankruptcy law; it is the statute which sets forth the extent of the government’s obligation — the contract…”
Supreme Home Health Servs., Inc. v. Azar (2019) lawd “"); 42 C.F.R. § 405.373 (A). Upon enrollment, Supreme, through Winston, expressly agreed "to return any moneys incorrectly collected from any person or to dispose of overpayments as specified in Regulations.”
True Health Diagnostics, LLC v. Azar (2019) txed “42 C.F.R. §§ 405.373 (a)(2) ; 405.374. CMS must then respond to the rebuttal within 15 days with a "notification of determination" that contain "specific findings on the conditions upon which the suspension is initiated, continued, or removed and an explanatory statement of the…”
Medicar Ambulance Co. v. Shalala (In Re Medicar Ambulance Co.) (1994) canb “42 C.F.R. § 405.373 (1992). The first payment was withheld by Blue Shield on February 9, 1993.”
True Health Diagnostics, LLC v. Azar (2019) txed “42 C.F.R. §§ 405.373 (a)(2) ; 405. 374. CMS must then respond to the rebuttal within 15 days with a "notification of determination" that contain "specific findings on the conditions upon which the suspension is initiated, continued, or removed and an explanatory statement of the…”
Visiting Nurses Ass'n of Southwestern Indiana, Inc. v. Shalala (2000) ca7 · cites it 2× “See 42 C.F.R. §§ 405.373 (a)(2), 405.374(a). If a provider is dissatisfied with the ultimate result of the administrative proceedings, it may file a civil action in the district court.”
In Re Vitalsigns Homecare, Inc. (2008) mab ““The Secretary’s regulation permits the intermediary, in an overpayment situation, either to seek to recover the full extent of prior overpayments-threatening to suspend a provider’s participation in Medicare if it does not pay-or to enter into an agreement with the provider…”
Long Island Ambulance, Inc. v. Thompson (2002) nyed “” 42 C.F.R. § 405.373 (e). Here, CMS applied the suspended funds first to an overpayment that it determined had been made to LIA.”
Total Renal Laboratories, Inc. v. Shalala (1999) gand “42 C.F.R. § 405.373 (e). Plaintiff, Total Renal Laboratories, Inc.”
Karnak Educational Trust v. Bowen (1987) ca11 “, until the overpayment is satisfied or the suspension is set aside, 42 C.F.R. § 405.373 (a). The Medicare statutory scheme provides for a “fair hearing” if the medical supplier wants to contest the suspension, provided the amount in controversy exceeds one hundred dollars.”
Consultants in Pain Medicine, PLLC and David Blanton v. Ellen Boyle Duncan, PLLC and Ellen Boyle Duncan, M.D. (2024) texapp “(citing 42 C.F.R. §§ 405.373 , 405.374). If the provider is dissatisfied with a coverage determination or a determination as to recoup or overpayment offsets, which collectively are referred to as “initial determinations,” it may pursue a four-step administrative appeals…”
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