Palmetto Issues Guidance on Demand Letters for Claims Adjusted with Reason Code 7INAP

Please see the following outreach from Palmetto regarding demand letters for claims adjusted with reason code 7INAP. If you have any questions, please feel free to reach out to HCAF. Thank you for your continued support.


Some home health providers are receiving overpayment demand letters as a result of adjusted claims with reason code 7INAP. The adjusted claims are based on the Office of the Inspector General’s (OIG) final report, ‘Inappropriate and Questioning Billing by Medicare Home Health Agencies’ (PDF, 3.54 MB) (OEI-04-11-00240).

As explained in the overpayment demand letter, the provider does have the right to appeal the overpayment. Providers filing an appeal should do the following:

1. Submit the request using the Redetermination Request Form either through the Online Provider Services (OPS) application, by fax (803) 699-2425 or by mail

2. All documentation related to the services billed should be submitted with the request for a redetermination of the claim

3. Providers should ensure that the dates of service submitted on the original claim do not overlap a hospital or Skilled Nursing Facility (SNF) stay. If the claims contain dates of service that overlap with a hospital or SNF inpatient stay, a UB04 must also be submitted with a type of bill XX7 to remove the overlapping dates of service.

Providers should also know that the redetermination process includes a full review to ensure that the services billed are supported in the documentation submitted with the request for a redetermination. Therefore, the provider may be subject to denials on the claim for medical necessity reasons.

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