1. (a) An HMO or preferred provider carrier may recover a refund due to overpayment or completion of audit if:

   1. (1) the HMO or preferred provider carrier notifies the physician or provider of the overpayment not later than the 180th day after the date of receipt of the overpayment; or
   2. (2) the HMO or preferred provider carrier notifies the physician or provider of the completion of an audit under §21.2809 of the subchapter (relating to Audits).

2. (b) Notification under subsection (a) of this section shall:

   1. (1) be in written form and include the specific claims and amounts for which a refund is due and for each claim, the basis and specific reasons for the request for refund;
   2. (2) include notice of the physician's or provider's right to appeal; and
   3. (3) describe the methods by which the HMO or preferred provider carrier intends to recover the refund.
3. (c) A physician or provider may appeal a request for refund by providing written notice of disagreement with the refund request not later than 45 days after receipt of notice described in subsection (a) of this section. Upon receipt of written notice under this subsection, the HMO or preferred provider carrier shall begin the appeal process provided for in the HMO or preferred provider carrier's contract with the provider.

4. (d) An HMO or preferred provider carrier may not recover a refund under this section until:

   1. (1) for overpayments, the later of the 45th day after notification under subsection (a)(1) of this section or the exhaustion of any physician or provider appeal rights under subsection (c) of this section, where the physician or provider has not made arrangements for payment with an HMO or preferred provider carrier; or
   2. (2) for audits, the later of the 30th day after notification under subsection (a)(2) of this section or the exhaustion of any physician or provider appeal rights under subsection (c) of this section, where the physician or provider has not made arrangements for payment with an HMO or preferred provider carrier.
5. (e) If an HMO or preferred provider carrier is a secondary payor and pays a portion of a claim that should have been paid by the HMO or preferred provider carrier that is the primary payor, the secondary payor may only recover overpayment from the HMO or preferred provider carrier that is primarily responsible for that amount. If the portion of the claim overpaid by the secondary payor was also paid by the primary payor, the secondary payor may recover the amount of overpayment from the physician or provider that received the payment under the procedures set forth in this section.
6. (f) Subsections (a) through (e) of this section do not affect a carrier's ability to recover an overpayment in the case of fraud or a material misrepresentation by a physician or provider.

Source Note:The provisions of this §21.2818 adopted to be effective October 5, 2003, 28 TexReg 8647.