(a) If a managed care organization (MCO) decides to recoup an overpayment from a provider or FMSA because of a discovery of fraud or abuse as permitted by §353.505 of this chapter (relating to Recovery of Funds), the MCO must have due process procedures that include the following:(1) written notice to the provider or FMSA of the MCO's intent to recoup overpayments that includes the following:(A) a description of the basis for the intended recoupment;(B) the specific claims that are the basis of the intended recoupment;(C) the process by which the provider or FMSA should send information to the MCO about claims that are the basis of the intended recoupment;(D) the provider's or FMSA's option to seek an informal resolution with the MCO of the intended recoupment; and(E) the MCO's process for the provider or FMSA to appeal the intended recoupment;(2) a process for the provider or FMSA to seek informal resolution; and(3) a process for the provider or FMSA to appeal the intended recoupment.(b) An MCO may recoup an overpayment only if a provider or FMSA:(1) does not appeal the alleged overpayment; or(2) appeals the alleged overpayment and the final decision from the appeal is favorable to the MCO.