HOW TO HANDLE OVERPAYMENTS: PATIENTS, PAYERS AND PAYBACKS
An office may occasionally receive overpayments, typically from insurance providers, though sometimes from patients who inadvertently overpay. Overpayments can also arise if a patient’s insurance details aren’t fully updated.
When the patient pays more than necessary, it is mandatory to notify the patient once the overpayment has been identified. The provider has choices about managing this extra payment, but they are not allowed by law to keep the money without any time limit.
Patient Overpayments
Consider a scenario where a patient visits an office and is charged with a co-pay. The provider removes a mole during the procedure and categorizes it as surgery. This makes the co-pay unnecessary and results in an overpayment.
When the office becomes aware of the overpayment, it should do either:
- Notify the patient about the overpayment. If the patient is returning, it can be offered as a credit for his future visits. If the patient declines the offer, the extra payment should be returned to him.
- Send a check to the patient immediately, including a note explaining the overpayment.
Payer Overpayments
When an insurance carrier overpays, the first step is to double-check and confirm the mistake. When the payer acknowledges the overpayment, they should reprocess the claim and request the return of the excess amount.
Once the provider receives the request, he should immediately issue a refund check to the address provided in the request.
If a check is received from the insurance carrier and belongs to someone else or does not belong to the provider, then void that check. Then, return it promptly, accompanied by a letter explaining why the payment is not due in this case. For example, if the payment relates to a patient your provider never saw, write “This patient was not seen in our office” on the check and send the check back. It also ensures clarity and assists in keeping correct billing information.
When It’s Not an Overpayment
Further investigation is recommended if the payer confirms over the phone that the claim was processed correctly, and no overpayment was made. In some instances, an individual might have insurance plans. One acts as the primary, which permits a particular sum and makes payment. After this, the secondary plan processes the claim for the remaining amount.
The credit balance is not a real overpayment. The amount taken off by contract from the primary insurance carrier was more significant than required, given the payment made by a secondary insurance carrier. So, there’s no actual overpayment or money that needs to be returned.
Managing Overpayments from Secondary Insurance Policies
In some cases, a patient’s secondary insurance carrier might be an insurance that was bought privately. They usually do not adhere to the same guidelines as provided by other insurance carriers and often pay without considering what has been paid by the primary, causing overpayments.
If an overpayment results from the patient having a secondary insurance plan, it is the patient’s money, as it was caused by having another insurance plan they pay for. In regulations, providers cannot charge, keep, or accept any amount besides the amount billed for the services provided.
Never should overpayments be ignored. It is always advised to ensure there is an overpayment, establish the correct recipient of the excess, and, as soon as possible, ensure the excess is either returned to the payer or debited to the proper account.
Conclusion:
Effective management of overpayments is crucial for maintaining trust and clarity in healthcare. Whether the overpayment comes from a patient or insurance payer, it is essential to verify it, besides communicating about it promptly and guaranteeing that excess payment gets returned or credited correctly. Always adhere to legal and ethical rules to avoid complications and lose patient trust. Effective management of overpayments helps uphold the integrity and efficiency of healthcare financial practices.
