Overpaid claim settlement

[FranH-EH]

We have just identified that we overpaid a claim settlement during 2018 and are trying to apply SSAP 84. We do not have the right of offset on this contract.

We have not yet invoiced the overpayment. If we sent a letter to the provider stating the facts related to the overpayment, would this suffice as an invoice? Would we then be able to record the receivable as an admitted asset and the clock would then begin on the 90 day aging?

Would we need the provider to agree or confirm the overpayment to record the receivable as an admitted asset?

After reviewing this in more detail, we determined that this is a risk sharing arrangement so would the admissibility of the overpayment be applicable under SSAP 84 paragraph 20 b?

[Glenn]

Hello Fran,
Please refer to SSAP 84 paragraph 14 for your answers to your questions:

Here is the excerpt:
Claim Overpayment Receivables
14. A claim overpayment shall not be recorded as a receivable until invoiced. To the extent that the claim overpayment meets the setoff conditions in SSAP No. 64?Offsetting and Netting of Assets and Liabilities (SSAP No. 64) and the overpayment is a specific identifiable payment and not an estimate, the receivable may be admitted up to the amount of the payable to the provider for reported claims (i.e., excluding incurred but not reported claims). The receivable and payable shall be reported gross rather than netted on the balance sheet. Evaluation of the collectibility of claim overpayment receivables shall be made periodically. If in accordance with SSAP No. 5R, it is probable the balance is uncollectible, any uncollectible receivable shall be written off and charged to income in the period the determination is made. Amounts in excess of that written off that do not meet the right of offset conditions shall be nonadmitted as they are not available to satisfy policyholder obligations.

Your questions with my interpretation which you can also consult with your domiciliary commissioner on as well:

We have just identified that we overpaid a claim settlement during 2018 and are trying to apply SSAP 84. We do not have the right of offset on this contract.
We have not yet invoiced the overpayment. If we sent a letter to the provider stating the facts related to the overpayment, would this suffice as an invoice?
My response : SSAP 84 specifically says "invoice" so I do not believe this would suffice
Would we then be able to record the receivable as an admitted asset and the clock would then begin on the 90 day aging?
My response: once you invoice then continue to look at SSAP 84 about admissibility - see above language
Would we need the provider to agree or confirm the overpayment to record the receivable as an admitted asset? again look at SSAP 84 admissibility rules above

Regards
Glenn S Sackett