Insurance Clawback & Recoupment Defense

Q: How far back can an insurance company recoup an overpayment?

It depends on the plan, and Medicare is not the same as Medicare Advantage. For fully insured plans regulated by Washington, RCW 48.43.600 currently bars a carrier from requesting a refund more than 24 months after payment (30 months for coordination of benefits), except for fraud and certain third-party liability situations, and those periods shorten beginning in 2027 and 2028. Self-funded ERISA plans and out-of-state plans follow their own rules. Traditional Medicare uses federal reopening periods (generally one year, four years for good cause, and any time for fraud) and, critically, limits recoupment while you appeal, so responding the right way preserves your appeal rights. Medicare Advantage disputes run through 42 C.F.R. Part 422, Subpart M, and differ for contracted versus non-contracted providers. The recovery period and your appeal rights must be determined claim by claim.

Q: What is the difference between recoupment and offset in medical billing?

Recoupment is the payer's recovery of an alleged overpayment, usually by written demand. An offset is a method of recoupment: instead of asking you for a check, the payer deducts the amount from payments due on other claims. Washington law treats an offset as a refund, so the same lookback, notice, and 30-day contest rights apply.

Q: Can an insurance company take back money it already paid?

Sometimes, but only within legal limits. The payer must generally act within the statutory or contractual lookback, explain the basis for the refund, and follow its own appeal process. Retroactive denials of authorized services, extrapolated demands built on small samples, and offsets taken without notice are all subject to challenge.

Provider Reimbursement and Insurance Clawback Disputes

When a payer demands money back through an insurance clawback, offsets your remittances, or puts your claims under review, we push back. We represent healthcare providers across Washington State and nationwide in disputes with carriers and managed care organizations.

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54% of private payer claim denials are ultimately overturned, but only after multiple rounds of appeal (Source: Premier Inc., 2024)
30 days to contest a carrier refund request in writing under Washington law before it is deemed accepted (Source: RCW 48.43.600)
19% of in-network claims denied by HealthCare.gov marketplace insurers in 2024 (Source: KFF, 2026)

An Insurance Clawback Is Not a Bill. It Is a Dispute.

The insurance clawback, along with recoupments and offsets, has become a routine revenue tool for payers. A carrier or its payment integrity vendor audits a sample of paid claims, extrapolates an error rate, and demands six or seven figures. Or it skips the letter and simply starts taking money back as an offset in medical billing. In that case, it deducts an alleged overpayment on one patient from what it owes you on another.

Most practices treat these demands as billing problems. They are legal problems. Your participation agreement, state overpayment recovery laws, federal rules for self-funded and Medicare Advantage plans, and the payer's appeal procedures all govern them. Moreover, each comes with its own deadlines. Miss one and the takeback becomes permanent. We slow the process down, hold the payer to its obligations, and put the numbers to the test.

We handle disputes involving UnitedHealthcare, Optum, Premera, Regence, Aetna, Cigna, and other carriers and managed care organizations. In addition, we deal with their payment integrity vendors and special investigations units.

Insurance clawback defense for healthcare providers: stethoscope and claim documents

How We Help Providers

Insurance Clawback and Overpayment Demand Defense

We answer each insurance clawback, refund request, and recoupment demand with a timely written objection. Then we challenge the audit sample, the extrapolation, and the legal basis for the takeback. Medicare Advantage demands raise a separate jurisdictional question, addressed in our analysis of § 405(h) channeling.

Offset and Cross-Plan Offsetting Challenges

When a payer offsets unrelated claims or reaches across health plans, we test the offset against your contract, Washington law, and ERISA, and demand reversal where it fails.

SIU and Payment Integrity Audit Response

We manage special investigations unit (SIU) inquiries, post-payment audits, and payment integrity audits from the first records request through findings, protecting privilege throughout.

Prepayment Review and Retroactive Denials

We work to lift prepayment review flags that choke cash flow and contest retroactive denials of services the payer already authorized or paid.

Insurance Underpayment Recovery

We identify systematic insurance underpayment against contracted rates and pursue what you are owed, including under RCW 48.43.605.

Network Termination and Contract Disputes

We represent providers facing provider termination without cause, for-cause terminations tied to audits, and breaches of participation agreements, from negotiated reinstatement to litigation.

How an Insurance Clawback Dispute Usually Starts

Reimbursement disputes arrive as routine-looking letters or unexplained changes on a remittance. Any of these should prompt a call before you respond.

An SIU or Payment Integrity Letter

A special investigations unit or vendor requests records for a list of claims. It reads like quality review. It is the opening of an audit that can end in a recoupment demand or a fraud referral.

An Overpayment Demand

A written repayment request, often built on a small sample extrapolated across years of claims. In Washington, you generally have 30 days to contest it in writing. Otherwise, the law deems it accepted.

An Offset on Your Remittance

Payments arrive short, with an insurance takeback coded against different patients or even different plans, frequently without the notice the law requires.

Prepayment Review or Retroactive Denials

The payer requires records before any claim is paid, or reprocesses and denies claims it authorized and paid months ago.

A Termination Notice

The payer terminates your participation agreement, with or without cause, sometimes on the heels of an audit. Appeal deadlines are short, and payers enforce them strictly.

From the First Letter to Resolution

Triage and Deadline Control. We review the letter, contract, and plan type within days, calendar every deadline, and send a written objection that stops any deemed-acceptance clock.
Records and Audit Analysis. We assemble the record, test the payer's sample and extrapolation, and identify defenses under the contract, RCW 48.43.600, ERISA, or Medicare Advantage rules.
Appeal and Negotiation. We pursue the payer's internal appeals with a complete record and negotiate directly with payer counsel, often reducing or eliminating the demand and restoring offset funds.
Regulatory Leverage. Where appropriate, we bring the dispute to the Washington Office of the Insurance Commissioner or other regulators whose oversight can change a payer's posture.
Arbitration or Litigation. If the payer will not move, we take the dispute to arbitration or court to enforce the agreement, unwind an unlawful offset, or recover underpayments.

Washington's Insurance Overpayment Recovery Law: RCW 48.43.600 and 48.43.605

Washington has one of the more provider-protective health insurance overpayment recovery laws in the country. RCW 48.43.600 limits when and how a carrier may request a refund of a paid claim. Likewise, RCW 48.43.605 gives providers a parallel right to seek additional payment on underpaid claims. Both override conflicting contract terms. In addition, the statute defines a refund to include recovery through an offset to a future claim. As a result, a takeback on your remittance faces the same limits as a written demand.

The law is tightening. Beginning January 1, 2027, amendments shorten the carrier lookback to six months for mental health and substance use disorder services (nine months for coordination of benefits). Then, beginning January 1, 2028, the lookback drops to 12 months for most other services (18 months for coordination of benefits). The statute does not apply to Medicare, Medicare supplement, or dental-only plans. ERISA governs many self-funded employer plans, and traditional Medicare and Medicare Advantage run on separate federal tracks, described below. Which law applies is often the first question we answer.

Key Deadlines Under RCW 48.43.600 and 48.43.605

Lookback: Except in cases of fraud, a carrier must request a refund in writing within 24 months after payment. For coordination of benefits, the window is 30 months.
Notice and timing: The request must specify why the carrier believes it is owed a refund. Furthermore, a carrier cannot require a contested refund sooner than six months after you receive the request.
Your window: If you do not contest the request in writing within 30 days of receipt, the law deems it accepted, and you must pay it.
Exceptions: Fraud, and cases where a legally liable third party has paid or will pay the provider for the same services.
Underpayments: Under RCW 48.43.605, a provider generally has 24 months from the denial or payment to request additional payment in writing. For coordination of benefits, it is 30 months.

Statute text: RCW 48.43.600 and RCW 48.43.605.

Medicare and Medicare Advantage: Different Rules, and Appeal Rights You Can Lose

Washington's overpayment statute does not reach Medicare or Medicare Advantage, and the two federal programs do not work the same way. The distinction matters. In these programs, a takeback comes bundled with appeal rights, and a provider can forfeit them by responding the wrong way.

In traditional, fee-for-service Medicare, a contractor may reopen and recover a paid claim within one year for any reason. It has four years for good cause, and it may act at any time in cases of fraud or similar fault. Just as important, federal law limits recoupment while you appeal. Under 42 U.S.C. § 1395ddd(f)(2), the government generally may not recoup a contractor-identified overpayment until it decides the reconsideration, the second level of appeal, provided you file on time. If you prevail, it must return any amount recouped, with interest. Preserving that protection depends on meeting each deadline in the Medicare appeals process.

Medicare Advantage (Part C)

Medicare Advantage (Part C) works differently again. Payment disputes and appeals run through the plan and the federal framework at 42 C.F.R. Part 422, Subpart M, not Washington's statute. Here, the right path turns on whether you are a contracted or a non-contracted provider. Contracted providers usually follow their agreement's dispute-resolution terms, while non-contracted providers have distinct appeal rights under Subpart M. We identify which regime governs before a deadline forecloses an appeal.

Why Providers Choose Stratagem Law Group

Payer disputes sit where law, clinical documentation, and revenue cycle operations meet. We have worked on all three sides.

An operator's perspective. Founding attorney Matthew Macklin spent more than twenty years as a healthcare executive and licensed nursing home administrator before practicing law. He has answered audit letters from the provider's chair, not just the lawyer's.
Fluent in the record. We read chart notes, claim forms, remittance advice, and audit spreadsheets the way payers do. As a result, we can show where the sample is skewed or the extrapolation is unsupported.
Business-first strategy. Not every dispute should become a lawsuit. We weigh recovery, cost, network relationships, and cash flow to get you to a safe yes, whether that is a negotiated reduction, a reinstated contract, or a courtroom.
Available when the deadline is tomorrow. Refund requests and termination notices come with short clocks. We offer 24/7 availability so a letter that lands Friday afternoon is addressed before Monday.

Working in person and virtually, we represent physicians, dental practices, behavioral health providers, skilled nursing facilities, and other healthcare organizations wherever they are. Our clients are in Seattle, Tacoma, Spokane, and throughout Washington State, as well as nationwide in federal and multi-state payer matters.

Frequently Asked Questions

How far back can an insurance company recoup an overpayment?

For any insurance clawback, it depends on the plan, and Medicare is not the same as Medicare Advantage. For fully insured plans regulated by Washington, RCW 48.43.600 currently bars a carrier from requesting a refund more than 24 months after payment (30 months for coordination of benefits). The exceptions are fraud and certain third-party liability situations. Moreover, those periods shorten beginning in 2027 and 2028. Self-funded ERISA plans and out-of-state plans follow their own rules. Traditional Medicare uses federal reopening periods (generally one year, four years for good cause, and any time for fraud). Critically, it also limits recoupment while you appeal, so responding the right way preserves your appeal rights. Medicare Advantage disputes run through 42 C.F.R. Part 422, Subpart M, and differ for contracted versus non-contracted providers. The recovery period and your appeal rights must be determined claim by claim.

What is the difference between recoupment and offset in medical billing?

Recoupment, the classic insurance clawback, is the payer's recovery of an alleged overpayment, usually by written demand. An offset is a method of recoupment: instead of asking you for a check, the payer deducts the amount from payments due on other claims. Washington law treats an offset as a refund, so the same lookback, notice, and 30-day contest rights apply.

What should I do if I receive an SIU or overpayment letter?

Do not ignore it, and do not send records or a check without a plan. Note the date received, calendar the deadline, preserve every related record, and contact counsel before responding. In Washington, the law deems a refund request accepted if you fail to contest it in writing within 30 days. Moreover, an SIU investigation can carry fraud implications.

Can an insurance company take back money it already paid?

Sometimes, but an insurance clawback is lawful only within legal limits. The payer must generally act within the statutory or contractual lookback, explain the basis for the refund, and follow its own appeal process. You can challenge retroactive denials of authorized services, extrapolated demands built on small samples, and offsets taken without notice.

Does a Medicare Advantage clawback have to go through Medicare’s appeals process before a provider can go to court?

Not automatically. Federal law channels claims that “arise under” the Medicare Act into a five-level administrative process, but that rule was written for parties seeking Medicare benefits, and courts have refused to apply it mechanically to a plan’s recovery of claims it already adjudicated and paid. Whether a channel exists turns on whether you are contracted, whether you hold an actual assignment of an enrollee’s claim, whether any enrollee has a stake, and whether the plan has issued a determination anyone can appeal. Our analysis of the governing cases is in Remove, Then Dismiss: The Medicare Advantage Jurisdictional Two-Step and the Limits of § 405(h) Channeling.

What is cross-plan offsetting and is it legal?

Cross-plan offsetting occurs when an insurer that administers multiple health plans recovers an alleged overpayment from one plan by withholding payment owed under a different plan. Often, that means a different patient and a different employer. Federal courts have scrutinized the practice under ERISA. Whether a given offset is lawful depends on the plan documents, your contract, and state law. If you see offsets across plans, have them reviewed.

Do Not Let the Clock Run on an Insurance Clawback

Whether you have received an insurance clawback demand, noticed offsets on your remittance, or landed on prepayment review, an early response protects your options. Contact Stratagem Law Group for a confidential consultation. Legal Insight. Business Instinct.