Correcting Medicare Errors: The Right Way to Reopen a Claim (42 CFR § 405.986)

Every small practice makes mistakes on Medicare claims. The real compliance risk is not the existence of errors but how you correct them. Reopening is the formal Medicare mechanism that lets you fix certain errors in an already adjudicated claim without starting a full appeal, and it is tightly governed by 42 CFR 405.986 and related reopening provisions. 

Under this rule, Medicare contractors and other decision makers may reopen an initial determination, redetermination, reconsideration, or higher level decision when specific criteria are met, such as new and material evidence or obvious error on the face of the record.  For a small practice, understanding these criteria is the difference between recovering underpayments, avoiding prolonged recoupment battles, and losing money simply because you missed the correct procedural path.

This article explains how reopenings work, who can request them, what “good cause” actually means, and how to document and track your reopening activity so that it stands up during audits and post payment reviews. It focuses on low cost, high yield steps that fit clinics with lean billing teams.

Most small practices know about appeals but far fewer understand reopenings. Yet, in many situations, the fastest and least adversarial way to fix a Medicare error is not an appeal at all, but a properly supported reopening request under 42 CFR Part 405, including 42 CFR 405.986 on good cause for reopening. 

Reopenings are particularly useful when you discover:

• A coding or modifier mistake that clearly contradicts your own documentation.

• An overlooked piece of documentation that would change coverage.

• A clerical error in beneficiary information, dates of service, or units.

Handled correctly, reopenings can allow Medicare to correct both overpayments and underpayments, often faster than formal appeals. Handled poorly, they can result in missed deadlines, rejected requests, and lost revenue. This article connects the regulatory rules to practical workflows that small practices can realistically implement.

Understanding Legal Framework and Scope Under 42 CFR 405.986

The core legal question for reopenings is not just “Was this claim wrong?” but “Is there good cause to reopen this determination now?” 42 CFR 405.986 answers that by defining when “good cause” exists for a Medicare contractor or decision maker to reopen a determination, redetermination, reconsideration, or decision. 

Under 42 CFR 405.986(a), good cause may be established when:

• There is new and material evidence that was not available or known at the time and may result in a different conclusion.

• The existing evidence clearly shows an obvious error in the prior determination or decision.

These criteria sit within the broader reopening structure of 42 CFR Part 405, Subpart I, which also includes:

• Time limits for reopenings, such as within 1 year for any reason and within 4 years when good cause exists, as reflected in related regulatory text and CMS guidance implementing these timeframes.

• Provisions that allow reopenings at any time for fraud or similar fault, or to correct clerical errors in certain circumstances.

It is important to distinguish reopenings from appeals. Appeals challenge the merits of an existing determination within the Medicare claims appeals process, while reopenings revise the underlying determination itself when the conditions in Subpart I are met. 

Federal rules control the structure of reopenings, including good cause, but contractors may interpret operational details through manuals and local policy articles. Understanding this framework reduces denials and recoupments because your practice can choose the procedurally correct remedy for each problem claim instead of defaulting to the wrong channel.

Reopenings occur within the Medicare administrative framework, not in a separate enforcement track. For Part B small practices, key players include:

• Medicare Administrative Contractors (MACs) that make initial determinations and handle many reopenings.

• Qualified Independent Contractors (QICs), Administrative Law Judges (ALJs), and the Medicare Appeals Council at higher levels, each of which may reopen its own decisions under the same good cause principles.

Common triggers for reopening activity include:

• Provider requests to correct underpayments or misapplied edits that surface during internal audits.

• Contractor identification of potential overpayments through data analytics, medical review, or Unified Program Integrity Contractor (UPIC) activities, which may rely on 42 CFR 405.986 as authority to reopen claims.

• Post-payment review findings that point to systematic clerical or coding errors across a date range.

From a small practice standpoint, the jurisdictional question is simple: the entity that issued the decision you want changed is the entity that must reopen it, subject to timeframes and good cause. Knowing this prevents you from sending reopening requests to the wrong level or mixing reopening logic with appeals in a way that undermines both.

Even though reopenings are a Medicare process, the discipline required looks very similar to what keeps you safe in a HIPAA or multi-agency audit: clear documentation, repeatable workflows, and evidence of oversight. For 42 CFR 405.986, small practices can implement several targeted controls. 

First, centralize identification of candidates for reopening.

• How to implement: Designate one staff member or a small billing review huddle to review internal audit findings, recoupment notices, and provider emails weekly for issues that may qualify for reopening instead of appeal.

• Evidence to retain: A dated “Reopenings Screening Log” that lists claim number, date of initial determination, issue described, and whether reopening or appeal was selected.

• Low-cost method: Use a protected worksheet on your existing shared drive and a standard naming convention like “Reopenings_Year_Month.”

Second, standardize your “good cause” documentation.

• How to implement: Create a short template for reopening requests that always answers two questions: what new and material evidence exists, or what obvious error is shown on the face of the record. Tie each statement back to 42 CFR 405.986(a).

• Evidence to retain: Copies of all reopening requests, with attachments and proof of submission, saved in a single folder linked to your log.

• Low-cost method: Use a simple text template in your practice management system’s note feature or as a copy and paste block in a secure word processor.

Third, track timeframes so you do not miss your reopening window.

• How to implement: For every potential reopening, calculate the 1 year and 4 year dates from the initial determination. Flag any case that is approaching those deadlines.

• Evidence to retain: Date calculations in the log and any alerts generated by your system.

• Low-cost method: Build conditional formatting or reminders into your spreadsheet rather than buying new software.

Finally, separate clerical errors from substantive issues.

• How to implement: Train staff to recognize simple clerical errors, such as transposed digits, wrong date of service, or incorrect beneficiary identifiers, and to route them through the appropriate reopening path where they may be correctable at any time.

• Evidence to retain: Short internal policy summarizing which types of errors qualify as clerical under CMS guidance, and examples of before and after claim images.

• Low-cost method: Incorporate this into your existing billing procedures manual and monthly staff huddles instead of separate training events.

When these controls are consistently applied, reopenings become a routine, documented process rather than ad hoc damage control. This makes your practice more resilient when auditors or contractors later review how you handled identified errors under the good cause standard.

Case Study

Consider a small internal medicine practice that discovers, during an internal chart review, that a series of complex visits were down coded after a new provider misinterpreted the documentation requirements of a local coverage policy. Months later, the documentation clearly supports higher level codes, and the practice wants to correct the underpayments.

The billing manager checks the initial determination dates and finds that the claims are within 1 year of the MAC’s adjudication. Because reopenings can be requested within 1 year for any reason under the reopening framework and good cause is not required in that timeframe, the manager opts for reopening rather than moving straight into redeterminations. 

Using the reopening template, the practice sends a concise request that points to the supporting documentation, identifies the original and requested codes, and includes a short explanation referencing the applicable reopening provisions. The MAC reprocesses the claims, increasing payment and avoiding a lengthier appeal path.

Several months later, a Recovery Audit Contractor letter identifies potential overpayments for a different cluster of claims. The contractor cites data analysis and an apparent error that is obvious from the face of the record as the basis for reopening the initial determinations under 42 CFR 405.986.  Because the practice has a documented reopening and appeal policy, staff can respond in an organized way, distinguishing between claims where they agree an obvious error exists and those where they intend to submit additional evidence.

Financially, the first set of reopenings protects legitimate revenue the practice earned, while the second scenario reduces chaos and supports a cooperative response to overpayment corrections. Reputationally, the practice can show regulators that it uses the reopening mechanism responsibly both for underpayments and overpayments.

You can use a concise, recurring self audit to confirm that your practice is using reopenings correctly and preserving evidence of good cause where required.

If you can answer “yes” to each row of this table, your practice is significantly less likely to mishandle reopening opportunities or misalign the process with the regulatory framework.

Common Audit Pitfalls to Avoid Under 42 CFR 405.986

Because reopenings are technical, many small practices stumble in predictable ways. Focusing on a small set of high impact pitfalls helps avoid expensive mistakes.

• Treating reopenings and appeals as interchangeable processes, which leads to misrouted requests and delayed resolutions, even though reopenings and appeals are governed by different provisions in 42 CFR Part 405.  Consequence: lost time, frustrated staff, and increased risk of missed deadlines.

• Requesting reopenings outside the allowable timeframes, such as after the 1 year or 4 year limits, without meeting criteria for fraud or similar fault under the broader reopening framework.  Consequence: automatic rejection of the request and permanent loss of correction rights for that claim.

• Failing to articulate “good cause” in writing, especially when relying on new and material evidence that was not previously considered, as required by 42 CFR 405.986(a).  Consequence: contractors may deny reopening for lack of sufficient justification, even if the underlying claim error is real.

• Using reopenings to contest coverage policies rather than to correct application errors or incorporate new evidence, which is more appropriate for appeals.  Consequence: wasted effort and reduced credibility with contractors.

• Neglecting documentation of overpayment related reopenings triggered by contractor findings, such as data driven projects or OIG referenced analyses.  Consequence: inability to show regulators that you responded appropriately to identified overpayments and managed recoupment risk.

When you actively prevent these pitfalls, your reopening activity becomes a defensible, rule based part of your revenue cycle rather than a loose collection of one-off favors requested from the MAC.

Effective use of reopenings is not just a billing tactic. It is a governance practice that shows Medicare you take accuracy seriously. To build this into daily operations, small practices can:

• Assign ownership: Make one leader, often the billing manager or compliance officer, clearly responsible for overseeing reopenings and ensuring alignment with 42 CFR 405.986 and associated reopening provisions.

• Train with examples: At least once a year, walk your billing and coding staff through real cases where the practice chose reopening versus appeal, and explain why the choice matched the regulations and timeframes.

• Monitor simple metrics: Track number of reopenings requested, percentage approved, and total dollars corrected, both for underpayments and overpayments. Over time, trends in these numbers become indicators of documentation quality and coding accuracy.

• Integrate into audit response: Whenever internal or external audits identify issues, require that root cause analysis includes the question “Do any of these claims require reopenings under the good cause standard?” This makes reopenings a standard part of remediation, not an afterthought.

By embedding reopenings into your culture as a normal, well governed tool, you reduce the odds that a random contractor review will expose unmanaged patterns of error.

For small practices, 42 CFR 405.986 is not an abstract regulation. It is the rule that shapes whether and how you can fix already adjudicated Medicare claims based on new evidence or obvious errors, and within what timeframes. Used wisely, reopenings can protect legitimate revenue, correct overpayments in a structured way, and demonstrate to regulators that you manage errors proactively. 

Over the next 30 to 60 days, a small clinic can take clear steps to move from ad hoc corrections to a disciplined reopening process:

1. Map your current error correction workflow and mark where decisions are made between reopening and appeal, verifying that those decision points align with 42 CFR Part 405 and the good cause framework.

2. Build or refine a simple Reopenings Log and good cause template, and start using them for every error that might qualify.

3. Perform a short look back on recent underpayment and overpayment situations to identify missed reopening opportunities, particularly claims still within the 1 year or 4 year windows.

4. Add reopenings content to your annual compliance training and to your policies and procedures so that new staff do not learn by trial and error.

5. Establish a quarterly review where leadership checks reopening metrics and adjusts documentation or coding practices that are generating avoidable mistakes.

Recommended compliance tool: 

A shared “Reopenings and Appeals Decision Tree” one pager posted at each billing workstation.

Advice: Before filing any Medicare appeal this month, pause and confirm in writing whether a reopening under 42 CFR 405.986 would be faster, more appropriate, or required instead.

• 42 CFR § 405.986 – Good cause for reopening
  

• 42 CFR Part 405 – Federal Health Insurance for the Aged and Disabled (Subpart I Reopenings)
  

• Medicare Claims Processing Manual Chapter 34 – Reopening and Revision of Claim Determinations and Decisions (CMS PDF)
  

• 42 CFR § 405.980 – Reopening of initial determinations, etc.