Regulations on Refunds

June 14, 2016 | By Ami Tucker

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!

125 Responses to “Regulations on Refunds”

  1. Jeff Karns says:

    What if a commercial insurer (non-contracted) erroneously pays a claim but it is not an overpayment (no credit balance exists). Does the provider have to return the payment?

    • Ami K Tucker says:

      The answer as I understand it is “No”. If the provider did nothing to misrepresent the claim and if the error is exclusively the insurance company’s error, and no overpayment exists…then the insurance should seek refund from the patient!

      • Ashley says:

        I would say if you know it was paid erroneously you should refund it and state the reason why. This was the practice at the last company I worked for. I’d say it’s ethical. Maybe it would depend on the reason it was paid erroneously.

  2. Kathy Branson says:

    Is there a Kansas Law that providers/facilities do not have to refund payer if the payer has not asked for the money to be returned? And if the refund is over a year old the provider/facility can keep the money?

    • Ami Tucker says:

      It is our position that best practice is to refund all legitimate overpayments as quickly as possible and in no longer than 60 days. By conforming to this benchmark we are assured all of our clients are compliant and within even the strictest of state laws. If you are interested in specific state requirements, please contact an attorney conversant in this aspect of the law for that information. We do not provide legal advice, but hold our standards to the highest possible to ensure we are never working counter to what is right or outside of legal guidelines.

  3. TRISH CERIOTTI says:

    Regulations on Refunds:

    We are getting multiple requests from non-contracted insurance companies stating that the patient policy actually terminated back in 2016 and they are looking for us to recoup the amount they paid. We are also received requests them stating the patient only has so many drug screens per year and they over paid the number and want the money returned. Is this correct? and if not, where is it written that we could use this information in a letter to them?

    • Linda Jamsen says:

      Hi Trish,

      I work in Colorado and our State Statutes list in writing that commercial insurances doing business in the state of Colorado must resolve all claim issues within 12 months from the date of service. Once this time has past neither the provider or the insurance company may seek restitution and any outstanding charges may not be balanced billed to the patient. In other words after 12 months its a write off for everyone. Check your State Statutes!

  4. Debbie Hoffman says:

    What about escheats requirement for those balance which aren’t refunded? Aren’t you required to escheat down to the penny ($.01) if you aren’t refunding?

    • Ami Tucker says:

      Every state has their own specific laws on this topic and you should consult with your local attorney for assistance in your state. Thank you for reading!

  5. Chris says:

    I work for a doctor as the office manager. It’s a small office with just the doctor and myself. I occasionally bring it to the doctor’s attention when a patient has overpaid on their account. Unless the patient asks for it, he tells me to “let it go”. I am uncomfortable doing this, but I don’t know how to address my concern with him as it’s not my business. Would I bear any responsibility in this if it came to light? Any suggestions on how to deal with this without losing my job?

  6. William says:

    “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”

    For federal payers, it seems there is obvious legislation (ACA etc.) requiring repayment for repaying credit balances – even a penny over.

    However, where do you find support for paying back patients and commercial payer thresholds?

    For example, I am in Colorado, and the unclaimed property (escheat laws) make it appear that you have to report credit balances after a year anyways. Even if you set a $10 threshold, when you report to the state for unclaimed property, you would have to show that you attempted to return the money.

    I guess my question is, what is the basis for your statement that you have to pay back patients, but that you can have a threshold for commercial payers? Is there any statutory support for a state like Colorado? I haven’t found anything except that unclaimed property laws require you to attempt a return when you report to the state after a year.

    Some states like Texas have explicit patient over-payment and physician refund laws, but others don’t seem to have that (like Colorado).

    Hopefully that all makes sense!

    • Ami Tucker says:

      Each state has specific laws and regulations on this topic. We choose to take the most conservative approach across the board in order to ensure compliance for our clients and our business. So while some states may be more liberal, we choose the safest route rather than make decisions state by state.

  7. Laura Watts says:

    I am a patient and overpaid by $41 for an appointment in July, 2017 because the doctor’s office overestimated what I would owe. They are telling me that they do not issue refunds and will apply a credit to my next appointment. I told her I would meet my full deductible (I am on a high deductible plan) before the next appointment in April, 2018 and that I would like a refund. She e-mailed back and said it is their policy to hold the money until after the next appointment. I am likely not going back to them again and want them to issue the refund. Should I send them this article?

  8. Sarah says:

    I am wondering where to find my State/Local laws in regards to this. I work/live in Michigan. What “wording” or websites should I be looking into to get the local answers. I am not able to find my “local” laws just common answers to this. I work for a doctors office that has multiple accounts in which we owe patients money. I am VERY uncomfortable about this and want to find the Michigan laws to show the doctor that we need to give refunds. Please help. Thank you

    • Ami Tucker says:

      If Google hasn’t helped you, you should call a local healthcare attorney for some direction. Thank you for reaching out – it is obvious that this is a big issue for billers. The more documentation we can show the providers about refunds, the better they can protect themselves from any legal repercussions.

  9. Micheal Brinnel says:

    I was able to locate information by searching under ” (enter state) patient over-payment and physician refund laws”. That should help

  10. Hollis says:

    If I work for a doctor who over $50,000 dollars in patient credits and she refuses to pay patients back. Is there some where she can be reported. Do we as employees have a responsibility to report this? It feels like they are stealing from patients by not returning them. The employees are not allowed to tell patients they have credits. The office counts on people not looking at there EOBs or understanding the system.

    • Ami Tucker says:

      I strongly recommend you seek the advice of a healthcare attorney at your earliest convenience regarding your obligations, and your own personal liability in this issue. This is very serious. If these happen to be government-related payer credits (such as Medicare or MediCaid) you could absolutely be held personally liable. Have you provided her with the rules and regulations regarding refunds?

  11. Karen Steil says:

    We inform an insurance company of an overpayment. If an insurance company ALWAYS recoups its overpayments in future payments to us, does the 60 day deadline apply? 80% of our insurance companies recoup from future payments.

    • Ami Tucker says:

      If you notified them and they agreed to recoup – you are in compliance. That said, this often causes major bookkeeping nightmares for you if it is a small payer who could take months to complete a recoup. In those cases we recommend issuing a refund to just simplify your life!

  12. Nicole M. says:

    Is the 60 days for refunding a payment period? Or is this just if you are a contracted with the carrier? I have multiple fund request for non contracted carriers and am wonder if the time frame for issuing payment is longer?

    • Ami Tucker says:

      Is it possible there might be an exception? Maybe. However we recommend you always default to the safest approach and refund within the 60 days. You do not want to be on the wrong side of this if there is a patient or payer complaint filed.

  13. Cassandra says:

    I have researched the regulations for the Washington State regarding “insurance” refunds however I cannot find information in regards to handling refunds that are either rejected or returned by the payer to the provider. At one time, some states allowed the provider to keep an overpayment when they had already in fact submitted a refund to the payer but the payer either, reissues the payment or returns the refund. Is this still the case or what would be the suggested/proper way to handle this. I am specifically referencing provider payments and not patient payments. I understand that patient payments would be reported as unclaimed property when appropriate refund attempts fail.

    • Ami Tucker says:

      The approach depends on your individual state regulations and your type of insurance. We recommend you start by calling your insurance company – they will often advocate for you with the provider in this situation.

  14. Kaye Dillingham says:

    My account has been overpaid in excess of $1,000 since June 2017 and I cannot get a refund – how do I file a complaint and cause this facility to pay a penalty.

    • Ami Tucker says:

      The approach depends on your individual state regulations and your type of insurance. We recommend you start by calling your insurance company – they will often advocate for you with the provider in this situation.

  15. Shane Turner says:

    Is there a particular regulation to how the refund should be issued. For example: if payment was made by credit card, can the refund be in a check form or should it go back to the credit card?

    • Ami Tucker says:

      No regulation; however most providers would prefer you refund credit card payments with a credit card refund in order to recapture the merchant discount that was charged to the provider on the original payment.

  16. Andrea says:

    I would like to receive clarifiation on the following scenario. If a provider receives an overpayment from insurances such as Mutual Omaha, Coventry, or any self-paid insurance and said insurance makes a payment causing a credit where should the payment be refunded to. The patient because they paid their premium or back to the insurance that made the payment? Please advise I am not able to find a direct response that regulates why the patient would get the refund rather than the insurance. Thank you in advance.

    • Ami Tucker says:

      If the insurance over paid in error, they should receive the refund. If the insurance paid correctly AND the patient also paid – the patient should receive the refund. The overriding principle is to refund the entity or person who paid in error.

  17. Cassandra says:

    I just went to a ENT specialist and filed an e-claim. My insurance provider and even CPF dept work really efficient. Only 3 weeks time I had received the letter said that my claim is successful. The problem is here, I had make full payment to the clinic but my claim instead pay to me is pay to the clinic. I will need to wait for the clinic to reimburse back the payment to me. May I know what is the maximum time frame the clinic must make the refund to me? As the clinic account department had told me very rudely that they are very busy and claim is only can refund to me within 6-8 weeks.

    • Ami Tucker says:

      According to the OIG, 60 days is the time limit, so while that is frustrating, if they get that refund to you within their promised 8 weeks, we believe they are in compliance.

  18. Michael Anderson says:

    I am a billing mgr for a private ambulance company in California. We recently received notice from a commercial insurance company that they had audited their payment records and determined that for a period of 1/1/2015-3/31/2017, we overbilled them $980,000 and they want their money back. During that time frame, we were not contracted with this insurance company. We billed them at the rate our county EMS agency either mandated or suggested as a rate. The overpayment was due errors being made in how the ambulance transport was coded. My question is, is there a statue of limitations that pertains to an insurance company demanding payment for having over paid a claim?

    • Ami Tucker says:

      They can go back 4 years if the errors were the providers’ errors, in this case the Ambulance Company. If your coding was incorrect, they are probably within their rights to request this. That said, if you correctly coded and submitted corrected claims, they should only request the difference between the two. I would highly recommend you contact a skilled healthcare attorney for an issue that large.

  19. Charity Miller says:

    Do you have to have contracts with insurance companies if you start a Business to Process Refunds for Medical Insurance Companies from Physician offices or the Hospital?

    • Ami Tucker says:

      I am not really sure I understand your question but it sounds like you should contact a healthcare attorney to assist you. Good luck!

  20. Rhonda Leasure says:

    I have a patient who has Cigna insurance company. I have been fighting for almost 2 years to get paid from Cigna on services from our office. About 4 to 6 months ago, we finally got paid. We just received a letter from Cigna’s collection agency stating that they want all their money back because it should have gone to the patients deductible.. Our clinic has done nothing wrong and all claims are legitimate. Since this is the insurance companies fault for paying us in the first place and not charging the patient, do we absolutely have to pay Cigna back for Cigna’s obvious error. We are in the state of Illinois. Thank you

    • Ami Tucker says:

      This definitely sounds like a recoup you can appeal. There are templates online of letters that you can use to argue this (Google insurance refund dispute letter). Look for letters that reference the legal decisions in support of your position and make sure to send it CERTIFIED! Good luck!

  21. Trinity says:

    Hi,
    I have a question regarding medical bills. I contacted the billing department; however, they are giving me excuses of why they cannot refund my overcharge payment. What can I do to proceed? Thank you.

  22. JoAnn McDaniel says:

    What are the regulations for refunds of overpayment of premiums when Medicare is involved?

  23. Lisa says:

    I have a question regarding over-payment from commercial insurance companies. I recently took over the billing manager position for a small clinic. Reviewing accounts we have come across a few credit balances that should have been returned to the insurance company, however the claims are from 2011-2016. Are we still obligated to refund the insurance company?

    Thanks

  24. TIFFANY says:

    I have been unable to find an answer regarding a question I have. I have a few credits on accounts and am having trouble with refunding. The patient has an employee supplement that I would assume was earned through retirement benefits and then they also have a self purchased supplemental policy. Neither policy will coordinate benefits with the other and will only pay as a secondary to Medicare. In this situation is it correct to refund the patient any credit amount paid by the self purchased policy?

  25. justin says:

    My insurance company had paid me back some money from when i was going to see a chiropractor and it was supposed to be money that they paid after i met my deductible. Now 5 months later they are wanting that check back. I was wondering if this is legal for them to do?

  26. Terri Zimmerman says:

    I had to pay a provider to have a procedure done, back in November 2017. I paid using a credit card. The claim was processed a few weeks later and I had been overcharged by approximately $600. When calling the provider to receive a refund on my overpayment, they said they couldn’t issue refund because the claim is not accurate. Since then, I’ve been back and forth with the Insurance company and the provider, even having 3 way calls. They both insist the other party is wrong. The provider says the claim is not paid according to the contract, and that I should have even more money coming back than the initial claim indicated. However, the provider will not refund me any of my money. The insurance company said they have processed the claim correctly, and it will not be reprocessed again. What can I do to get my money back?

    • Ami Tucker says:

      You are in the right – if the overpayment is there, the provider needs to refund you no matter how it was processed. You could involve an attorney but it would probably be too expensive – the only other thing we can suggest is a Yelp or Facebook review that might prompt them to do the right thing.

  27. vh says:

    I switched insurance companies so was self-pay for a follow-up visit to a specialist for whom I was no longer covered. The office required me to pay $250 just to make the appointment and told me they’d bill me more or issue a refund after the appointment. Three weeks after the appointment, I called and was told I had a $68 credit. I asked why it hadn’t been refunded and they said their policy is not to issue refunds unless patients request them. I requested that they immediately refund the balance on the credit card with which I had paid (in advance). They said all refunds needed to be reviewed which would take 14 business days at which point, if approved, I would be mailed a check. Is this policy legal?

    • Ami Tucker says:

      The policy to require a request is definitely not compliant. However the timing to issue the refund is state mandated. Please check your state regulations on this topic.

  28. Teri says:

    An insurance company quoted the doctors office a certain amount for the deductible. But by the time the procedure was done and the claim filed the deductible amount had changed. The patient had borrowed the money from her church for the deductible which is now a credit and the church paid the doctors office directly with a church check. Who does the doctors office refund?

  29. Teri says:

    Thank you

  30. Angela says:

    How would I properly handle account credits that have been sitting on patient’s accounts for years? I want to be compliant with this but it seems that it has been something that has been overlooked in the past, now I have hundreds of accounts with credits on them, dating back several years.

    • Ami Tucker says:

      The compliant approach is to refund all patient credits – it really doesn’t matter how long they have been there. I do understand this could be a significant amount of money, so I would take the time to review them and make sure they are all valid (sometimes it can be a posting error or some other mishap). Make sure to get on a schedule so that these are handled right away going forward.

  31. Office Manager says:

    Our Specialist does not contract with ll ins. payers, and patients are informed when their insurance is not accepted at our office. Many say “then I will pay cash” – they pay for the initial visit and afterwards send their insurance information to our billing company insisting that they bill the insurance “because they had been told that the insurance would pay” Many of the insurances have a provision to pay for not-in-network MDs, but the reimbursement is a token payment (once we received a check for $1.20!) The the pts. ask for a refund of all the money they pay because “we need to accept the insurance payment as payment in full” and they demand a full refund of the payment they made on the first visit. It seems that this is a well known strategy and we are seeing more and more patients doing this. How can we protect our business besides denying services to these patients? There are some that do not even disclose they have insurance and then send ins information to the Billing office. Can we issue a letter at the first visit stating that if they decide to be self pay, the funds will not re refunded when they submit ins, retroactively? thanks!

    • Ami Tucker says:

      If you are not contracted, then you have absolutely no obligation (nor should you) refund the patient’s payment. As a non-contracted physician you are able to set your fees at whatever rate you choose. My recommendation would be to consider revising your notification to new patients to make this process even more clear – and to have your reception staff verbally educate all patients. Even encourage them to bill their insurance and obtain potential OON benefits! For example

      “We do not contract with any insurance plans and are not in-network providers. You will pay in full for each visit in this office. We do encourage you to bill your own insurance to obtain any out-of-network benefits your particular policy may offer. (Please contact your insurance company directly if you have any questions about how to do this or your benefits as they differ greatly from policy to policy.) Any payment the insurance makes should be made directly to you. Should the insurance company send to us in error we will return it to them with notification to pay you directly.”

      And for those patients who still don’t understand, and come back later asking you to honor the “contracted rates” – I suggest you have a warm and friendly standard response letter reminding them you are NOT contracted nor in-network, as you advised them on their first visit. Ask them to call their insurance company directly if they have questions on out of network providers and benefits. Let their insurance companies educate them!

  32. Eva De Carton says:

    I would like to know if we owe interest to a patient on overpaid co-pay?
    Also if we make refund to CC can we legally charge patient the processing fee if the refund was patient’s mistake?

    • Ami Tucker says:

      1. It is highly unlikely that you would owe interest; However your state laws would dictate to the requirement for that. If you refunded it within 30 to 60 days it should not be an issue.
      2. If you refund it with the same credit card the patient paid your merchant processor will refund your merchant fee directly to you. If they do not then I suggest you find a new credit card processor!

  33. Jennifer Daniels says:

    If a retroactive denial (causing refund request/ recoupment warning) is due to an error on the insurance company’s part, do we have any ground to refuse and request they collect from the member instead of the provider. Our staff verified eligibility (we have confirmation on file) and it identified the patient as insured. Now, several months later they now show no active policy on the DOS and will recoup out of future payments if we do not refund in 30 days. It just doesn’t seem like it should fall on the provider to reimburse another individuals mistake. Perhaps it wouldn’t be as big of an issue if it didn’t happen so often with this particular company.

    I work diligently to maintian compliance in all areas and I realize they are entitled to their money back. I’m just curious if there is a way to force the insurer/insured to settle the dispute, rather than our provider suffer the financial burden. Thanks for your advice/opinion.

    • Ami Tucker says:

      We come across this constantly in our business. You should definitely fight these recoups because the provider shouldn’t have to refund when they have verified eligibility and there are a lot of letters online that will help you defend yourself (search “insurance refund dispute”). Having said that, we have mixed success and often still have to allow a recoup and then ask for payment from the patient. Sometimes you need to consider how much money is involved to decide how to spend your time and resources.

  34. Vivian says:

    I’m currently handling patient accounts that require a refund to several different health insurance companies, i.e. BCBS and United Healthcare. The insurance companies stated they could not accept the refund due to the account being several years old and that the claims were purged from their system. Also, it does not appear that the patient made a payment towards the account. At this point should I refund the patient or their next of kin since I couldn’t return the money to the health insurance company?

    • Ami Tucker says:

      2. We would need more information on why they consider this an overpayment if the patient never made payment on this account/service.

  35. Kayla says:

    I do billing for a dental practice, and we are receiving refund requests from a commercial insurance that originally paid us as out of network, but are now back dating the provider (without our knowledge) to the date he started working for the practice and is requesting the difference back as a refund. My question is, are we able to impose a processing fee for all of the refunds we are having to process (over 100)? They want individual checks for each claim.

    • Ami Tucker says:

      In general, no -you will not be able to charge a processing fee. You may want to review your contract with this payer and see if this issue is specifically addressed; however standard contracts do not allow the provider to charge the payer for these types of fees.

  36. Veronica Pockrandt says:

    Is there a way to report a billing office for taking over 60 days to process your refund? I have been fighting with a doctors office since February and they still have not paid me even after multiple requests.

    • Ami Tucker says:

      We would suggest contact the insurance company first – this probably violates the contract with them. If that doesn’t work, you could try talking to the regulatory body for your state.

  37. Stefanie Young says:

    When I got pregnant, my OB GYN told me I needed to make payments each visit, to apply toward the cost of my labor and delivery (my understanding was this was because my BCBS plan wasn’t that great), but I ALSO had medicaid and didn’t know any better to question it, so I just made the $200+ payment per visit until I was paid in full before my cut off period. Fast forward to April 2017, the hospital bills Medicare and BCBS for my labor and delivery and I have $0.00 balance with the hospital. In June 2017, my OB GYN office sends a check to the hospital for $2,150 from my pre-payments – but I have no balance to apply it to. So the hospital is telling me that this payment for my labor and delivery pre-payment was applied to some account from an ER visit in 2012 that had previously been sent to collections – but I had NO clue about – its not on my credit report, I have no statements from it.. they are just verbally telling me theres a balance it was applied to.

    So my question is – should I be due a refund for the overpayment since it was made towards a different bill (and really shouldn’t have been paying in the first place if the Dr’s office would have properly instructed me on have the dual insurances and the fact that I didn’t need to prepay when having Medicaid). Or, is this a lost cause because it was applied to another account? so my Labor and delivery account really does not show a credit, since they moved it to another account?

    • Ami Tucker says:

      Wow! This is very complex, so we suggest you go to your MediCaid rep for assistance with this one – they will be the best person to advise if these payments should have been collected and/or should be refunded. It definitely warrants review! Good luck and please let us know the outcome.

  38. Alice Cauble says:

    I have Medicare, a Medicare supplement policy with Mutual of Omaha, and a full Blue Cross Blue Shield policy that is a state employee retirement benefit. Omaha has no coordination of benefits provision. Both Blue Cross and Omaha pay the amount not covered by Medicare, creating an overpayment situation. Some of my providers automatically refund overpayments to me. At least one provider (out of state) has returned the overpayments to BCBS who sent them back to the provider because they—BCBS—were contractually obligated to make those payments. I contend that all of the overpayments legally belong to me. Is this a correct contention? If it is, where can I find written verification of it? Do you know of state statutes or case law that addresses this issue? I live in North Carolina. Thank you this website!

    • Ami Tucker says:

      You are correct – the overpayments go to you. The physician is not entitled to be “unjustly enriched” – in other words, overpaid. The insurance companies recognize they have an obligation to pay. Since the patient pays the premiums – the patient is entitled to the refund. Unfortunately I am not sure exactly where you can find the NC statute for this but you can check with the state governing board of insurance. Good luck!

  39. Cathie Pinto says:

    My daughter and son-in-law paid a $6,100 deductible to a hospital in Los Angeles for my granddaughter’s surgery last November. This was at the beginning of her cancer treatment, and the deductible had not been met previously, so they paid what the hospital said they owed. The hospital dragged its feet on submitting the claim to my daughter’s insurance (OSCAR) and then erroneously coded it (hospital admitted that it did not include the correct DRG code). After months of going around and around with OSCAR and the hospital, we filed a complaint with the Dept of Managed Health Care, who promptly intervened and told us that an adjusted claim had been submitted and the claim would be processed within 30 days, and there was no patient responsibility (meaning my daughter does not owe anything on that particular bill) after insurance pays. Many other claims were processed during this time period such that the deductible and all co-pays/co-insurances were met, so the $6,100 payment made to the hospital in November is an overpayment. Last Friday, I spoke with the hospital who informed me that they received a $13,000 payment, but were still owed $17,000 by OSCAR and no refund could be issued to my daughter because their policy states that refunds are only issued when the credit balance appears. The hospital said it has disputed the OSCAR payment, but until the $17,000 is paid, there technically is not an overpayment/credit balance. The hospital acknowledged that the EOB they received from OSCAR stated “no patient responsibility – patient owes zero.” The hospital says they are trying to override their policy to issue the refund check, but I want to keep the heat on because my daughter and son-in-law have incurred thousands in unpaid medical bills, and that overpayment refund of $6,100 is much needed.

    I called the hospital countless times and could not get a call back until I faxed a letter to the CFO of the hospital. Within an hour, I got a call back and since that time, the person handling this matter has been communicative, but he doesn’t have much authority and always has to go to his supervisor. That takes weeks on end.

    They paid the $6,100 with their credit card – maybe disputing that charge will move things along faster?

    Any thoughts or recommendations?

    Thanks so much!

    • Ami Tucker says:

      It’s probably too late to dispute with the credit card company…they usually won’t go back that far. I would write to the CFO again and state that you understand that the hospital is disputing the payment from the insurance but regardless of the outcome of that dispute – there will be no patient obligation. It is an unfair and punitive action to withhold the refund from the patient. You could also reach out to a consumer advocate group.

  40. Shannon says:

    I work for a DME company. If we receive an overpayment from an insurance company and we notify the insurance of the overpayment, what is the statue of limitations they (the insurance company) has to come back and request those funds before they are considered ‘ours’?

    • Ami Tucker says:

      Our opinion would be it’s not just your responsibility to notify them of the overpayment, it is your responsibility to return the overpayment when you discover it.

  41. Tera says:

    My company issues refunds within 60 day for all overpayments/credit balances regardless of the amount. If these refunds are not cashed, we do our due diligence and try to find the owner of the medical overpayments. If we cannot find them, Michigan does not require you to send payments less than $25. Can we at this point we void the check and bring that money into income instead of reporting it to the state? We are concerned with CMS or any other regulations other than the states escheat laws that this will be an issue. Thanks!

  42. Bonnie Holland says:

    I am at a hospital in Texas. We have some patient overpayments that originated from a credit card payment. Can we cut a check back to the patient or do we have to refund the credit card? I was told years ago that it had to go back to the card otherwise it would be considered a loan.

    • Ami Tucker says:

      I am not sure that is always possible – credit cards expire, get cancelled, and have other issues. However, we prefer to refund credit cards whenever possible because then we get back the percentage they charge!

  43. Angela says:

    We have an insurance company demanding reimbursement for ‘overpayment’ on several patients’ accounts. It was discovered that they (the insurance company) had two fee schedules, and were using the wrong one when paying us. We called several times trying to figure out why the benefits were not being paid at the amount that was estimated, until eventually the insurance company figured out it was using the alternate schedule that did not match the one they sent us. Should we have to pay them back for their error when they sent us one fee schedule and used another….?? They never would have found their error had we not called several times to point it out to them.

    • Ami Tucker says:

      That’s a tough one! It was their error, but the overriding factor is the provider benefited more than he should have from the payment. In this situation he he received more than the contracted rate. So we would say yes you should refund, even if it was their mistake.

  44. Cheryl says:

    I work for a third party administrator. There was a computer glitch and a dental claim was accidentally processed for a different person who was not a patient of the provider. The provider’s office cashed and deposited the check, knowing it was not their patient. They called to let us know. An overpayment letter was issued to their office the same day of their phone call. I’ve sent them two requests. They are refusing to refund us back. They applied the payment to one of their patients, who the claim was intended for. They think this is an “even exchange.” It’s not, due to deductibles. In fact, the provider should be paid more. The correct patient already satisfied their deductible earlier in the year. We told them the claim for the correct patient will not be processed until we receive the refund. I now have to call the patient to let them know the claim is pending. I have no idea if the DDS charged the patient a balance. If so, it will be incorrect. The DDS office manager is playing games when I call her. She will leave messages to call her at the DDS office. I will return her call within seconds, and she is not there, she’s actually calling from her house. They think this is a funny, laughing matter. I work in northern Calif. The DDS is in San Francisco. What would you suggest my next steps would be? We no longer have a claim manager, I’m a Dental Claim Examiner. I’ve never had anyone refuse to pay a refund in the 8 yrs I have worked there. I have implemented my own system of getting paid and I always get an overpayment refund within 60 days. Any suggestions would be appreciated. If you could direct me on rules and regs to construct a more legal letter. They are being fraudulent, using funds that is not their’s, misrepresenting a patient’s identity, and cashed a check for services not performed on a person who is not a patient of their office. Send the DDS a certified letter? Thanks for you help!

    • Ami Tucker says:

      This is an interesting one! We haven’t had questions from the payer side. There are a few options here: Does the contract allow for recoupment? That would be the ideal way to get your money back. You could use a collections agency (though they take a big chunk of the money so it isn’t ideal). You could also draft a letter, certified and marked confidential, directly to the DDS. Explain the situation, California laws governing overpayments to providers and give a short deadline to comply. In the letter you should state the next step is reporting to the dental board, local dental society and the California insurance commission. It should be a gracious letter, citing prior contact with the manager who “must not be aware” of the seriousness of the issue. Hope this helps!

  45. Barbara says:

    Non-Contracted Insurance paid their members claim. They are stating that they forgot to send claim to their “cost containment auditor”. They are asking we refund more than 80% of the payment and bill the member for a 2017 claim. Should insurance carrier ask for the payment from their member?

    • Ami Tucker says:

      This error was not the fault of your practice and was 100% an error of the insurance company. Coupled with the fact that you have no contract- the insurance company needs to go to the person they do have the contract with – the patient!

  46. Meredith says:

    I had a claim for blood work done at an out of network lab. They sent me my HRA funds to pay the lab. They’re now telling me they sent too much and I owe them a check for $125, is this allowed???

  47. Laura says:

    We recently opened our own Ambulatory Surgery Center, our physicians are the only ones practicing currently at the ASC. We are noticing that based on when claims are submit sometimes the ASC will get paid first sometimes the Physician will get paid first. This is causing our patients to have credits in one system and an owed balance in the other because of pre-payment. Can we move the credit over from one system to the other? Do we have to have the patient’s permission? Do we refund the patient their money in hopes they will pay the “other” system? What are you thoughts?

    Thanks!

    • Ami Tucker says:

      Are you having the patients pay a “deposit” prior to the procedures? A better alternative would be to institute a secure credit card on file system so that you can just process the patient portion after the insurance processes. Otherwise I would recommend you talk to legal counsel as this is a grey area.

  48. mary says:

    We have received several refund recoupments from an insurance co stating the member did not have active coverage on the date of service, The dates of service are over 5 years old, when we verified benefits we were told they had active coverage, can an insurance co request refund for dos from 5 years ago, I am in Pennsylvania and the statute states none across the board, do we not have any recourse to fight this?

    • Ami Tucker says:

      I also see that Pennsylvania doesn’t seem to have time limits on these requests but you can still fight it! You did nothing wrong in billing the insurance company since you verified eligibility. It is their error and they need to request payment directly from their insured. There are many letters that will give you the verbiage to appeal this – just Google “insurance refund dispute letter”. Make sure to attach your proof of eligibility at the time. We recommend sending the letter certified, and make sure to copy your state insurance commissioner and medical society as well.

  49. Lamesia says:

    I have a question I got injured on the job and used my insurance because workers comp. gave me hard time. I lost my workers compensation case so my insurance paid everyone accept my anesthesia. I received a bill from them and the contractual amounts was written off and said if my insurance would have paid it would be $618.00. I called my insurance company asking could they help me with the bill cause it was workers comp. and I couldn’t afford it. They called me back a week later to inform me they are going to pay the full amount and intentionally send them an overpayment of $3500. She said something about a clause in my contract and I did nothing wrong and everything by the book so an overpayment is being sent and the provider will know what to do with it. My question is who is getting the refund? Me or the provider and why would they intentionally send the overpayment to my provider?

    • Ami Tucker says:

      A lot more information would need to be collected to provide a responsible answer. You may want to discuss with your Workers Comp attorney or call your insurance company and ask their intent and advice.

  50. Virginia says:

    How would you request a refund to AHCCCS if the Pharmacy states your son’s medication is denied because he has a secondary insurance; he has no other insurance? We have had to out of pocket for his medication until AHCCCS was able to remove the secondary insurance that they had listed in his file.

    • Ami Tucker says:

      I am not sure what AHCCCS is but if that is your payer, you will need to contact them directly to ask the best way to request a refund. Everyone has a different process.

  51. Lori says:

    My patient has dental insurance effective 6//9/2017 and medical effective 6/19/2017
    Both are under the patient’s mother. I filed dental first and received 2000.00, sent EOB (with the primary payment as a line item on the claim) to the subscriber to file. A narrative was requested so I completed it and sent it in.
    The total claim was 2820.00
    Primary Dental paid: 2000.00
    Medical paid: 2505.00
    This leaves a credit of $1685.00
    I called the medical carrier and they were adamant about being primary and that they would have paid the same amount regardless of dental insurance. I have a reference number and names of two reps I spoke with.

    Should I contact the dental and let them know the medical paid and send the credit to them?
    I don’t feel I should send the credit to the patient.

    • Ami Tucker says:

      Yes, I suggest you call the dental insurance company regarding the coordination of benefits. Although I would assume they would request the refund, I’ve seen cases where both payers insist they are primary and don’t want the refund – it has to do with their coordination of benefits policies (which are not always standard or logical). If that is the case then you would refund the patient….odd as that may seem!

  52. cb says:

    I have a slightly different scenario right now as a patient. We received a check from our health provider and when I called to ask why, they said it was an overpayment from insurance. At the time I had my primary insurance but also secondary/gap insurance. Nobody seems to be able to clearly explain what happened, best I can figure out insurance paid out their initial coverage amount, then secondary/gap insurance paid what was outstanding after primary insurance’s initial payment, but then primary insurance paid the health provider more. Health provider then sent me a check for the balance of the overpayment.

    Today the health provider is asking for that money back, because the secondary/gap insurance company is now asking them for it back (gap insurance must have found out primary insurance eventually paid out more).

    The original medical services were provided 8 months ago, we received the check about 5 months ago. Are we on the hook for the returning their erroneous payment to us?

    • Ami Tucker says:

      This is a difficult question. Most likely the answer is yes. If it was an error and it is within one year, then you should return the funds. My recommendation is that you request a copy of the letter the insurance sent to the provider with the request for overpayment refund. If you agree it looks to be appropriate (and certainly call the insurance if you have questions!) – then refund the insurance company directly and provide the provider with a copy of the check you sent to refund the insurance. UNLESS the provider already refunded the insurance, then send to provider.

      Sorry! It’s hard to return money – hope it was not a huge amount!

  53. Lakshmi M says:

    I recently noticed that I’ve overpaid my chiropractor about $292, I’m trying to get a refund. He told me that he can give me credit for future visits. He clearly sounded like he didn’t want to give the money back. I told him clearly that I want the refund not credit as I wouldn’t be going back. He told me to give them a week to file claim for my final visit with the insurance, which they didn’t file yet even after two weeks. I have been going to that facility from April and I was the one who noticed the overpayment and it’s frustrating to deal this situation. I already wrote to my insurance that I would need their help by speaking to the chiropractor office if they don’t return my calls coming week. Is there anything else I should do in this situation? I’m from Georgia. Your suggestion on this would be greatly appreciated. TIA

  54. Lakshmi K says:

    I’m trying to get a refund from my chiropractor for $292 which I overpaid during my initial visits. They got paid by my insurance and also by me, when I found out about this overpayment recently, they are now offering credits for future visits which I don’t need. When I called them couple of weeks back, they told me that they will file the claim (which was only for my final visit, all other claims are complete and they r paid by my insurance) and contact me after a week, send me the cheque for the overpayment. As they didn’t call or return my calls, I wrote to my insurance whether they could help me by speaking to them. I find them very dishonest and won’t be returning to them for service. I paid through credit card and I’m from Georgia. What are my options to get my money back? Your suggestions are highly appreciated. TIA.

    • Ami Tucker says:

      I’m curious, did your insurance company offer to help? If the doctor is contracted with them then they should be able to assist you. I recommend you call the phone # on your insurance card for customer service for a faster response than writing. u could file a dispute with your credit card company.

      In addition, by the rules of the GA Board of chiropractors, you should have received a written agreement for the prepayment of services, that includes the provisions for refunds which you initialed. You can review this link: http://rules.sos.ga.gov/gac/100-7 Look at rule 100-7-.08 #1b.

      And finally you could write a formal request for refund, outlining your repeated attempts to obtain it, directly to the chiropractor and copy the Georgia Board of Chiropractic Examiners – they are responsible for disciplinary actions of their members. Here is the link to their contact info: http://sos.ga.gov/index.php/licensing/plb/14/board_members8.

      Best of luck! Would love to hear back if it gets resolved!

  55. Janet says:

    I have a question regarding copays/coins. We collect our copays upfront. However an insurance company comes back refusing to pay the claim, for instance, authorization was not given or patient seen over visit limit. Are we allowed to keep the copay or coins that the patient would have paid initially or do we have to give back to patient?

    • Ami Tucker says:

      You have to return to the patient IF you are a contracted provider. If you are out of network you can bill the patient the full amount and keep the copay or coinsurance.

  56. Neely says:

    Does this article pertain to Minnesota regarding refunds? I am going through some OLD files before I worked here and have found a file that has a credit – wondering what to do with old credits I may run into. (no known phone number for patient) Making sure we follow the refund laws in the future as well. If an insurance company paid differently (more) like we collected a copay but insurance paid 100% so money will be due back to patient. What is time frame refund the patient for MN or can it sit in their account until they return for care? Thanks for any help!

  57. Brandon says:

    Our hospital owns a number of physician practices. If a patient is due a refund and requests that we transfer the refund to pay on her hospital account, is that permissible?

    • Ami Tucker says:

      This is a bit of a gray zone and unless both are under the exact same tax ID # for billing you probably should not do it. If both have the same Tax ID #, then it should be ok.

  58. Brandon says:

    Can you point us to a regulation regarding the threshold amount? I cannot seem to locate anything with a specific dollar amount. Everything I find just says “a reasonable amount.”

    • Ami Tucker says:

      We also cannot find anything with an exact amount, so our policy is to refund anything over five dollars. We advocate credit card on file with all of our clients because it is much less onerous (and costly) to refund credit cards than to print and mail checks.

  59. Amanda says:

    We bill for a doctor in California and we just received a letter for over payments for claims from 2013-2016. They are all stating that the patients had a different insurance. We don’t know why they would process the claims if they couldn’t identify the patient and to this day they are still paying on some of these patients. Is there a time limit they have to ask for a recoupment since some of these claims are over 5 years old.

    • Ami Tucker says:

      Yes in California they are legally only allowed to ask for a refund within 365 days of payment BUT they should technically collect payment from the patient regardless – you did nothing wrong and this was an error on the insurance company’s part. There are letters with great verbiage that can help you fight these recoup requests and it helps if you can show that you checked eligibility at the time of service.

  60. Pablo A says:

    If a patients never paid on her older accounts and overpays in a current account (all under the same MR) Is it legal to transfer credits and zero-out those accounts before refunding the patient?

    • Ami Tucker says:

      If I am reading this correctly, and this is for different dates of service for the SAME provider, with the SAME Tax ID, then yes, you can apply the credits. Having said that, you should not be holding on to these credits for very long before refunding your patients!

  61. Walter Burch says:

    We have a high deductible plan. The hospital (WV) offered a 20% discount on pre-registration for a prepay amount they had calculated with no refund conditions provided. We accepted the offer and paid through a credit card $5000. An ensuing refund was due for the overpayment (90 later). The final statement reflected a significant loss of that discount on an after the fact accounting adjustment. Particularly disturbing was a loss of discount for an HRA payment to the provider paid after the account was already reflecting a credit balance. (The HRA had previously paid us for claims we would file for excess deductibles paid by us.)

    Thank you for your thoughts. They will not discuss the loss of the discount and tell me, “That’s the way it is.”

    • Ami Tucker says:

      By virtue of the hospital’s contract with your insurance company, it is generally not allowable to discount deductibles or coinsurance. So unless this is an exceptional situation which we are unfamiliar, I don’t understand how they could have offered you a discount in the beginning. However without direct access to their contract it would be difficult to give you a definitive answer. My suggestion is you call your insurance company directly, ask to speak to a patient advocate and outline the situation in detail. They would be in the best position to advise you and assist you and resolution with the hospital.

  62. Josiah says:

    I write this as a patient, living in California. I received a letter from my insurance provider, dated 8/14/18, requesting that I return $4,020, the amount which the insurance company says they overpaid my surgeon (a contracted provider for the insurance company) for my procedure of 8/28/17. The letter states: “this claim was received after a previous claim was processed, and adjusted, using CMS MUE limits.” There is a good deal more verbiage in the letter, but essentially the insurance paid twice for the same service.

    One important detail: after my surgery, the insurance company settled provider claims by mailing payment checks – to ME. I deposited these insurance checks into my bank account, then immediately sent personal checks for the same amounts, to the indicated providers. I kept none of the funds sent by the insurance company.

    Before I call the insurance company, I was hoping to get a better idea as to where I stand with regards to this situation. Am I obligated to repay the insurance company the $4,020, or can I request that they collect directly from the provider? If I do have to pay the insurance company, are there any specific guidelines, or state/federal statutes, that could help me in seeking to recover the money from the physician provider?

    Any suggestions or input would be most gratefully appreciated!

  63. Josiah W. says:

    Hello – I just submitted a query re. a $4,020 payment my insurance company is requesting from me.
    I just wish to add a clarification: I mentioned in my query that the surgeon was a contracted provider for the insurance company. Thinking on this some more, I realize that I cannot say for certain whether this is indeed the case, or not – I had just assumed that he was. Sorry for the incorrect assumption.

    • Ami Tucker says:

      Since you received the checks and then wrote personal checks to the physician it is not a straightforward issue, and many of the protections you may have had for using a contracted provider may be compromised. You should start by calling the physician…explaining the situation and asking if they will refund the insurance directly? if they refuse, then call the insurance company and outline the issue for their input. If they truly received duplicate payments for the same service, they should not be allowed to keep both, nor should you have to pay that. I am not entirely sure it was a duplicate payment however – sometimes insurance companies make post payment adjustments and pay more than originally assessed.

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