Many offices are so proud of their A/R report when they have a large credit balance. I do applaud the teams who have been trained to be paid upfront or get down payments. What I am speaking about today are the credits that are old and still sitting there. The patient has not come into the office in over a year, not kept their appointments and you still have a credit.
Do you know if it belongs to the patient or the insurance company? If you do not know you need to take this into consideration since there are laws on the books that can cause you a lot of pain.
If the money was an overpayment by the patient or payment for treatment, you could simply refer to your state’s unclaimed property regulations. Once a credit has reached the dormancy holding period, as established by state law, the credit becomes unclaimed property. This dormancy period varies by state but is typically around two to three years. Unclaimed property legislation requires the practice to make a reasonable attempt to return the balance to the patient and most states require that written notification be provided to the patient within a given period. If your patient makes an overpayment to your office, use the following quick facts to help you and your patient settle the charges quickly and easily.
If you collect payment from the patient at the time of service, please be sure that you appropriately indicate the patient paid amount on the claim submission. This information allows us to auto-adjust claims to reflect amounts patients have already paid. In the case of an overpayment, (unless there is law that prevents it) insurance can also refund the patient directly, so that you do not have to.
How to handle patient overpayments:
• If the patient overpaid using cash, check, or another credit/debit card, please work with the patient to issue a refund.
• If the patient does not respond, the money must be transferred to the state’s unclaimed property division along with a report. Each state has a filing deadline and specific requirements such as, but not limited to, how many days prior to the filing deadline a due diligence letter must be sent to the patient. Contact your state’s unclaimed property office for guidance and clarification of your state law.
• If the money was a payment made by the insurance company, that money should be sent back within a 60-day period, most plans have rules listed online. They are listed as, “Voluntary reimbursement”. As soon as the dentist discovers that a claim has been overpaid, he or she can document the amount and reason for the overpayment on the Explanation of Benefits your (EOB) and mail it with a check for the exact amount of the overpayment to THE INSURANCE YOU ARE DEALING WITH. Keep copies of everything and send return receipt plus keep it in the patients document center.
Example: Dental overpays a participating dentist by $500.
The dentist then submits claims which we approve for payment in the amounts of (1) $150, (2) $250, and (3) $600 on three separate checks. We will recover $150 of the overpayment by deducting it from the ﬁrst check (remitting a zero payment), $250 by deducting it from the second check (remitting a zero payment), and $100 by deducting it from the third check (reimbursing the dentist $500). Under the previous system, we could not recover any portion of our overpayment from the $150 or $250 check. Instead, we recovered the full $500 by deducting it from the third check (and reimbursing the dentist $100).
This is a bookkeeper nightmare. My advice is to contact your insurance plans that you are in network with or your state insurance commissioner and set up a plan to be notified so you can send back the overpayment directly to them without them deducting from someone else’s payment.
When the Insurance Company Requests a Refund Due to an Overpayment
1. If you get a call or letter from the insurance company asking for a refund, make sure they reprocess the claim, if necessary. If they call, ask them to send their request in writing.
2. Some insurers prefer to recoup the overpayment from future remittances. Others may give you a certain length of time to submit a paper check, or they will withhold payment from future remittances.
3. If you determine that the request for a refund due to an overpayment is not correct, contact the insurance company and ask them to reprocess the claim. You could also wait until the refund has been processed and give a corrected claim.
Insurance Company Overpayments to Patients
When a provider is out of network, some insurance plans pay directly to the patient and the patient signs the check over to the provider. Or, they deposit the check into their own bank account and write a check to the provider. Usually, if the insurance company believes that an overpayment has been made, they will typically contact the patient for the refund.
What to Do When You Have an Insurance Overpayment
Once it is determined that your credit balance is due to an insurance overpayment, your refund process should be started. There are six steps to a complete refund process.
1. Send a letter to the insurance company making them aware that an overpayment has been made in error. You should never send a refund to an insurance company without contacting them first. Each insurance company has a process for handling overpayments and refunds.
2. Allow them at least 30 days to respond to your letter.
You should receive instructions on how the refund should be given and where to send it.
3. Once you have received instructions on how to process the refund, make sure it is given with all required information to ensure proper credit.
4. Some insurers prefer to recoup from future remittances.
Keep an eye out for when this happens so you can properly notate the accounts affected to reflect this transaction.
5. If no response is received from the insurance company within 30 days, contact them by phone to follow-up before taking further action.
6. In the event the refund is due to Medicare or Medicaid, the process may be different from other insurance carriers. Follow CMS guidelines for Medicare and check with the Medicaid office in your state for refund instructions.
State Regulations about Insurance Recoupment vary drastically. Some states, such as Minnesota, do not have a time limit statute set for insurance companies to request refunds based upon overpayments, duplicate payments, pricing changes or coverage changes. Some states, such as Texas and Maryland only allow six months for an insurance company to request a refund. So, depending on what state you are in and depending on what the refund request is issued for can make a difference on how long the insurance company can request their money back. Each insurance company has a web site with the forms you need to refund money. Every company is different but they all follow the amount of time you have to refund. Even Medicaid by the state has a form on line.
Delta has their rules online. Please visit their overpayment policy at https://www.deltadentalin.com/MediaLibraries/ Global/documents/PRRL10-Overpayment-Recovery-by-Autodeduction-flyer.pdf