Got a Medicare Demand Letter? Here’s What to Do

 Posted on October 10, 2026 in Medicare Repayment

A Medicare demand letter can create serious financial and legal concerns for a healthcare provider. The amount being demanded may be substantial, and the steps you take after receiving the letter can affect both your appeal rights and your cash flow.

If you received a Medicare demand letter in 2026, a California Medicare repayment lawyer can review the notice, explain your options, and help you decide how to respond.

What Is a Medicare Overpayment Demand Letter?

A Medicare overpayment demand letter is a formal notice. It states that a contractor has determined you were paid more than you should have been and now wants that money back.

These letters come from a Medicare Administrative Contractor. However, the underlying review may have been conducted by a Recovery Audit Contractor, a Unified Program Integrity Contractor, the Supplemental Medical Review Contractor, or the Comprehensive Error Rate Testing program.

The letter states an amount, explains how the contractor calculated it, and identifies the claims at issue. The letter also explains your appeal rights and when Medicare can start taking money from future payments. The deadline to prevent those deductions is shorter than the deadline to appeal. That’s why so many practices and pharmacies respond to the wrong one.

Many of these demands come from a statistical sample. A contractor reviews a small group of claims, finds errors, and uses those results to estimate errors across many more claims. This can turn a small review into a much larger repayment demand.

How Does the Medicare Appeals Process Work?

Medicare appeals move through five levels.

Redetermination

You file with the same Medicare Administrative Contractor within 120 days after receiving the initial determination. For qualifying overpayments, the contractor must receive your valid appeal within 30 days of the date on the demand letter to prevent recoupment. Recoupment means Medicare takes money from your future payments to recover the overpayment.

Filing after day 30 does not necessarily forfeit the appeal. A timely redetermination filed later can still stop future recoupment once the contractor receives and validates it. However, amounts already collected generally remain with Medicare while the appeal continues.

Reconsideration

If the redetermination goes against you, you have 180 days after receiving that decision to request reconsideration by a Qualified Independent Contractor. To keep recoupment from resuming, you need to file within 60 days of the redetermination notice. Under 42 U.S.C. § 1395ddd(f)(2), Medicare cannot recoup the overpayment while a qualifying reconsideration is pending. You should also submit your supporting documents at this stage. If you wait until later, they could be excluded unless you have a valid reason for the delay.

Administrative Law Judge Hearing

You have 60 days after receiving the reconsideration decision to request review. The amount in controversy must meet the required minimum. For appeals filed in 2026, the amount you are disputing must be at least $200.

The recoupment protection ends after the second level. Once a case reaches an administrative law judge, Medicare can collect while the appeal continues. Any amount taken may be refunded with interest if you ultimately win, but that money is unavailable to you in the meantime.

At this stage, you can present testimony and challenge the evidence. You can also question how the contractor used a small sample of claims to estimate a larger overpayment. This stage has historically involved longer waits than the earlier appeal levels.

Medicare Appeals Council

You have 60 days after receiving the administrative law judge's decision to request review.

Federal District Court

You have 60 days after receiving the Appeals Council’s decision to ask a federal district court to review your case. For appeals filed in 2026, the amount you are disputing must be at least $1,960.

Should You Hire a Medicare Repayment Lawyer After Receiving a Demand Letter?

A Medicare repayment lawyer can help determine whether the contractor applied Medicare rules correctly to the claims in dispute. That may involve reviewing coverage requirements, billing rules, medical necessity standards, and the documentation Medicare relied on when finding an overpayment.

An attorney can also identify procedural problems with the review. They can communicate with the contractor and help organize the evidence needed to challenge the determination. In more complex cases, this may include working with medical or billing experts to explain why certain claims were properly paid.

Legal representation can be especially valuable when a demand involves many claims. It can also help when the documentation is complicated, or there are questions about how Medicare applied its rules. A lawyer can help build a clear record that supports your position throughout the dispute.

Schedule a Free Consultation With Our Nationwide Medicare Demand Letter Lawyer 

Attorney Joseph Bogdan is both a registered pharmacist and an attorney. He has over 20 years of experience in healthcare and regulatory matters. He also serves as an expert witness in pharmaceutical cases, including matters involving controlled substances. That clinical background is useful in an overpayment dispute. To challenge a demand, your lawyer needs to understand how Medicare reviewed your records and what those records show about the care you provided.

Contact The Law Offices of Joseph J. Bogdan, Inc. at 630-310-1267 to talk to our California Medicare repayment lawyer today.