Insurance companies ramp up efforts to claw back money from providers

March 20, 2023


Insurance companies are ramping up efforts to recover overpayments made to hospitals and health systems—adding to providers’ operational and financial challenges in an already-tough economic environment.

In a practice known as clawbacks, insurers can recoup money after determining they’ve paid too much on past claims due to incorrect coding or fee-for-service reclassifications. Some enlist third-party companies to find overpayments, even if they occurred years ago. Insurance companies typically offset the amount owed by deducting it from the current plan account, meaning they pay less for other services.

Providers can challenge insurers on clawbacks, but healthcare organizations often choose to absorb the cost to avoid additional administrative burdens on staff. Otherwise, they invest time and more money tracking down claims and completing paperwork for appeals in an effort that could produce minimal results—a factor that has pushed many healthcare groups to call for improvements.

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