Private Insurance Overpayment & Patient Credit Balance Repayment Obligations - Liles Parker PLLC (2024)

FAQs

How will you resolve if there is a patient's overpayment or credit on an account? ›

Start By Notifying The Patient Immediately

Most minor overpayment problems can be resolved by offering the patient a standing credit for future services. If they are unhappy with the credit or are no longer in your care, then you are legally obligated to repay the exact amount owed.

Talk to the insurance rep and ask them to explain how they determined their payment amount and understand if they processed the claim correctly. If the payer confirms that they made an overpayment, they should reprocess the claim to show correct payment and send a request for the provider to return the overpayment.

The best practice is to return an overpayment to the responsible payor upon identification. In the case of a credit balances owed to a patient, should a provider be unable to locate the patient or find a valid address to return the overpayment (due to a variety of factors), your State's escheat law must be considered.

​​​​Overpayments Program

The primary function is to recover funds due the Medi-Cal program, thereby reducing the total cost of the program. Overpayment cases are referred by the Audits and Investigations Division (A&I), other auditing and legal agencies, and the Medi-Cal fiscal intermediaries (FI).

If you receive a payment from an insurance carrier and the entire payment is wrong or not rightfully due to the provider, write “void” on the check and return it to the insurance carrier with an explanation of why the payment was not due.

When a business receives an overpayment, it is required to notify the customer and to offer to refund the excess amount or apply it as a credit toward a future invoice. The agreed-upon resolution should be documented and implemented quickly.

In terms of processing time, acquiring a refund for your classic car insurance claim typically spans approximately two weeks. This duration, which encompasses roughly 10 business days, accommodates payment methods such as checks or direct deposits.

If they are still having treatment you can recommend they apply this credit for future balances. However, if there are no future visits to apply this credit to, or if the patient insists they would like the credit sent to them, then you must immediately refund the money.

If the credit is valid, ask the insurance company if they have a process to recoup the overpayment. If the insurance cannot or will not recoup the money, request that they reprocess the claim and send a formal request for a refund.

Physicians could manipulate reimbursem*nt rules to help their patients obtain coverage for care that the physicians perceive to be necessary, for example, through ambiguous documentation or by exaggerating the severity of patients' conditions.

What is the primary reason for processing refunds to insurance carriers? ›

Most insurance providers will request a refund if there is an issue with an overpayment.

If the Insurance Company Overpays:

If they confirm that there's indeed an overpayment issue, request them to process the claim again with the right amount. They'll also have to send you a refund request to initiate a refund.

California offers the strongest worker protections against bosses clawing back money that they think was overpaid. First, an employer can only recoup money if the worker signs a written agreement outlining the exact terms of repayment.

While overpayments can occur inadvertently, they can result in financial imbalances and complications for both the payer and the recipient.To prevent overpayments, it is essential to maintain clear communication, accurate invoicing, robust payment verification processes, and diligent reconciliation of accounts.

A review of the credit balance report, identifying outstanding patient and insurance refund checks, that have not cleared the practice's bank account in over sixty-days, and follow-up with patients and insurance companies to change a mailing address and re-issue a refund check are common credit balance procedures.

When an overpayment is $25 or more, your Medicare Administrative Contractor (MAC) initiates overpayment recovery by sending a demand letter requesting repayment. Immediate Payment: Follow the demand payment letter directions.

While there are many reasons for credit balance situations to occur, over-payments from payers and excessive payments could be from deductibles, and co-pays are the primary reasons for credit balance. The healthcare provider must refund such amounts to the appropriate party – payer or patient.