Managing Payer and Patient Overpayments

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Managing Payer and Patient Overpayments

• When a medical practice receives reimbursement
  over the payable amount for a service rendered,
  its called an overpayment. The payer usually
  makes the overpayment, but sometimes patients pay
  too much for a particular service too. In either
  case, promptly return the overpayment to the
  correct patient or payer. If a patient and payer
  pay more than required, notify them in writing as
  soon as you discover the overpayments.
• Processing and returning overpayments arent
  optional, it is a federal mandate (63 FR 70144,
  Dec. 18, 1998). Either deliberately or
  unintentionally withholding overpayment holds
  legal consequences. If not handled properly,
  overpayments create costly legal problems for
  you, payer, and your patients.
• In this article, we discussed how to manage payer
  and patient overpayments and correct procedures
  repay them.
• Why Do Overpayments Occur?
• Some of the common reasons for payer and patient
  overpayments are as follows
• Wrong estimation Some practices use estimation
  tools to decide patient responsibility, some
  billing software also provides this feature, the
  wrong estimation could cause overpayments.  

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Managing Payer and Patient Overpayments

• Duplicate payments Often your billing team will
  submit claim for the same service and sometimes
  payer will also pay for such duplicate claim.
• Bundled payments Some of your billing team might
  claim for service which is part of the bundled
  payment program. Your practice may get paid under
  bundled payment program and as a separate
  service.
• Practice policy Practices pre-collect amounts
  for every patient visit to ensure financial
  sustainability.
• Coordination of benefits issues with
  payers Payers often pay duplicate claims because
  theyve incorrectly coordinated benefits.
• Patient Overpayments
• Your billing team may make mistake and collect
  more from patients. For example, a patient came
  into a dermatologists office visit and paid
  his/her co-pay. During this visit, the provider
  removes a mole, which is considered surgery and
  doesnt require a co-payment. That makes the
  co-pay into an overpayment. Once the practice
  realizes the co-pay should not have been
  collected, communicate with the patient and make
  an arrangement to repay. Please note that a
  provider cannot just keep the overpayment, even a
  small amount, that is illegal.

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Managing Payer and Patient Overpayments
In such a case, you can inform the patient about
overpayment and its reason. If the patient has
scheduled a new appointment, then the overpayment
can be applied as a credit toward the next visit.
If the patient doesnt want to apply the money
toward a future visit, you must return the
overpayment. Immediately send the patient a check
for the overpaid amount with a note explaining
the overpayment. Payer Overpayments If you
found out the payer paid more than expected,
first determine if it is truly an overpayment.
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. Sometimes the
insurance rep will just ask the provider to
return the overpayment over the telephone. In
this case, ask them to request the money back
with a written explanation. When you receive the
written request, attach a check for the
overpayment to the request and mail them to the
address indicated on the request. If they dont
provide a specific address, send it to the claims
department address but indicate Attn
Overpayments on the envelope.
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Managing Payer and Patient Overpayments
If you receive a payment from an insurance
carrier and the entire payment is wrong or not
rightfully owed to the provider, write void on
the check. Then return it to the insurance
carrier with an explanation of why the payment
was not due. Investigate Overpayments In case
of payer overpayments, if the payer states during
the call that they processed the claim correctly
and there was no overpayment, then you need to
investigate further. Sometimes a patient has two
insurance plans. The primary plan allows a
certain amount, makes the payment, and then the
secondary insurance processes the claim. A credit
balance results when the secondary payer allows
and pays a higher amount than the primary
insurance carrier. This credit balance is not
actually an overpayment. The amount contractually
adjusted off from the primary insurance carrier
was more than needed, based on the secondary
insurance carriers payment. Therefore, there is
not a true overpayment and no money needs to be
returned. Sometimes a patients secondary
insurance carrier is privately purchased
insurance. They do not always follow the same
guidelines as other insurance carriers.
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Managing Payer and Patient Overpayments
Often, they ignore the amount paid by the primary
and make payment as if no other insurance is
involved, resulting in overpayment. If that
happens, the overpayment amount belongs to the
patient because he/she purchased the other
insurance plan. In such a case, the provider
cannot just keep the money and the provider
cannot collect more than was billed out for
services. To Summarize Whether its payer or
patient overpayments, never ignore possible
overpayments, always investigate received
payments. If it is a true overpayment, determine
whom the overpayment needs to be returned to, and
then do what is necessary to return it. Managing
payer and patient overpayments is not difficult,
you just need expert billing team to investigate
it. If you need any assistance to handle
overpayments or for overall billing operations,
we can assist you. To know more about our medical
billing and coding services, contact us
at info_at_medicalbillersandcoders.com/ 888-357-3226