Regulations on Refunds
In recent years the regulations have clamped down hard on refunds. That’s why you are seeing us get these “Requests for Refunds” to you monthly. In the “old days” we used to hang on to the smaller refunds and just flag the accounts for the patient’s next visit, or hold insurance overpayments waiting for the insurance company to request. But no more. The rules as they relate to compliance now require all refunds (regardless of size) be refunded within 60 days. Insurance companies. Medicare and Medi-Caid are the most stringent. We must proactively report overpayments or risk heavy fines and penalties.
Here’s a good summary pertinent information on the regulations:
- The OIG published a list of risk factors the OIG identifies as “particularly problematic.” Bullet five on this list is “Inadequate Resolution of Overpayments,” otherwise known in the billing industry as resolution of credit balances. In essence, it says that providers may not keep payments that do not belong to them.
- Very few, if any, billing companies relish the prospect of resolving credit balances. Much time and effort is devoted to collecting information, creating charges, submitting claims, and collecting payments. To have to spend additional time and energy trying to return this money seems like an untenable situation. And yet the government is very clear in its guidance: “Billing companies should institute procedures to provide for timely and accurate reporting to both the provider and the health care program of overpayments.”
- Processing and returning credit balances, or “overpayments” as the government calls them, is not optional but mandatory. The term “credit balance” can be defined in a number of ways; however, we will define it as “improper or excess payment made to a practice/provider as a result of patient billing or claims processing errors.”
- It’s not uncommon for providers to keep such overpayments until specifically asked to return them or until payers have withheld them from subsequent payments. This is illegal.
- The rule also addresses the timeliness of refunds and requires Medicare providers to report and return an overpayment to the appropriate patient, intermediary or carrier within 60 days of identifying the overpayment.
- A frequently asked question is, “Must a provider refund all monies?” The answer is yes, for both patients and federal payers, i.e., Medicare and Medicaid. For commercial payers, a provider may set a refund threshold—for example, only credit balances of $10.00 or more shall be refunded—remembering the threshold must be a reasonable amount
In addition to the regulations, prompt refunds are a good business practice. By keeping up with refunds monthly your A/Rs are clean, they more accurately represent your totals, no large months of refunds so cash flow is more stable, and you have happy patients!
18 Responses to “Regulations on Refunds”
Leave a Reply
- February 24, 2017 | By: Ami Tucker
The sustainability of the traditional office provider-based model is being continually challenged by… Read more »
- December 14, 2016 | By: Ami Tucker
HIPAA Guidelines – Why you should not use Skype, Email or Facetime for communicating with your patients
The HIPAA guidelines on telemedicine affect any physician who provides a remote service to patients … Read more »
- June 14, 2016 | By: Ami Tucker
In recent years the regulations have clamped down hard on refunds. That’s why you are seeing us ge… Read more »
- February 11, 2016 | By: Ami Tucker
There is no one, and I do mean no one, in your medical practice who does not have a serious impact o… Read more »
- January 10, 2016 | By: Ami Tucker
Last blog post we discussed the significant risk of embezzlement that is posed to small and medium m… Read more »
- January 5, 2016 | By: Ami Tucker
By definition, embezzlement is the act of dishonestly appropriating assets by one or more individual… Read more »
- June 2, 2016 | By: Ami Tucker
Best Web Presence: Healthcare Management Systems has the best web presence with an easy-to-navigate … Read more »