Clawbacks: When a Plan Wants Their Money Back

(By Barbara Griswold, LMFT January 3, 2023)

While there are many types of records requests and audits you might receive from an insurance plan, most do not involve money. But today I’ll address the scariest kind: When the plan asks for money back (aka “clawbacks”).

What is a clawback? Plans may do a “post-payment” or “retrospective” audit, where they request your progress notes and treatment plans for sessions they have already paid. If they find your notes are in any way deficient (or missing), they can ask you to pay back the money for some or all those sessions. This is called a clawback.

How far back can they go? This depends on the plan and your state laws. The ones I’ve seen have typically gone back 1-2 years. Some states do not have laws limiting clawbacks.

How frequent are clawbacks? While they do happen, they aren’t as frequent as online therapist chatrooms make them seem. For example, I’ve practiced for 32 years without receiving a post-payment audit, as have most of my colleagues who have insurance-heavy practices. Many insurance plans never do them. In my experience, OPTUM/United Health Care and Medicare seem to do these audits most frequently.

Out-of-network clients wouldn’t be affected, right? Unfortunately, while it is rare, I have seen cases where a plan requested an out-of-network therapist’s notes, and refused to reimburse the client due to the therapist’s poor documentation.

What can trigger these audits: Retrospective audits are often triggered by

seeing a client multiple times per week for extended periods of time
a higher-than-average use of the CPT code 90837 (60-minute individual session). Again, while some plans are fine with the routine use of 90837, using it every week may increase your audit risk with Medicare and OPTUM/UHC.

How can I prevent a clawback? I have five tips:

When you get a records request, don’t guess what to send. Unless you are told a treatment summary is OK (as is usually possible in a risk adjustment audit), send what is requested. One lovely therapist I assisted had sent a treatment summary for a post-payment audit. The plan deemed the documentation sent inadequate, and requested the money for ALL the sessions to be paid back. In fact, based on this, they stated they believed her notes for all her sessions for the last 2 years would also be deficient, and asked her to pay back $189,000. All this, and the plan had never seen one note! (Don’t worry, I’ve helped her write a strong appeal; send your best wishes!)
Include start and stop times in each progress note — NOT the scheduled session times, but actual THERAPY start and stop times. This should naturally vary for each session. Total therapy time must match the billing code you used for the session. In an audit, the plan will check this closely.
With Medicare and OPTUM/UHC especially, consider mixing in 90834 (45-minute individual) sessions to your 90837 sessions to decrease your audit risk.
If you are seeing clients twice a week or doing routine longer sessions, document why you feel this is medically necessary, and not just desired by the client.
Know what plans require in your notes to prevent a clawback, and keep excellent notes. You can then be calm and confident if they are ever requested. To make this happen, check out my pre-recorded webinar, “What’s Missing From Your Charts: Writing Great Notes.” Click here for more info.

For more information about audits, check out my webinar “Audits and Records Requests: What Every Therapist Should Know”– click here for more info.