What is recoupment in medical billing?

Recoupment in medical billing refers to the process by which a healthcare provider or payer retrieves previously paid funds due to overpayments, billing errors, or adjustments in claims. This can occur when an insurance company identifies that a claim was paid in error or when a provider must return funds for services not rendered. Recoupment impacts cash flow for healthcare providers, as they may need to adjust their financial records and manage the return of funds. It is essential for providers to maintain accurate billing practices to minimize recoupment issues.