Credit Balances and Refunds – Nope, They Won’t Tell You if You Have One!
One of the most unethical practices in healthcare, other than straight-up fraud, happens around credit balances and refunds that are due to patients. Medicare and Medicaid, our federal and state insurance providers, (also known as the Center for Medicare and Medicaid Services, or CMS) require that all healthcare entities self-audit quarterly and return money to them within 60 days; however, there is nothing in place to protect patients.
What is a credit balance or overpayment? Generally, it means that a provider of healthcare service receives an improper or excess payment for a claim, and it is reflected in their accounting records (patient accounts receivable) as “credit.” Fault and motive are irrelevant (human error, system error, contractor fault, vendor mistake, wrongly up-coded claim, medically unnecessary) and it doesn’t have to be the entire claim for that date of service, it can also be one line item.
Under the Affordable Care Act, recipients of Medicare and Medicaid funds who have “received an overpayment,” must “report and return the overpayments” within 60 days of the overpayment being “identified”. Failure to comply puts the provider at extreme risk of prosecution for fraud under the False Claims Act. The government has this requirement, but where is the protection for the patient? Insurance companies have provisions in laws and contracts for themselves, and while they write rules for patient refunds, there is no enforcement.
The tricky part here is knowing that you have a credit balance that is owed to you, and unfortunately, providers of healthcare can and often do suppress credit balances from printing on your patient statements. I don’t want you to think that there aren’t honest and forthcoming providers of care, because there are, just not many.
Interestingly enough, the two areas that most healthcare entities understaff are the patient call centers that deal with patient questions about medical bills received and the credit balance and refund teams. Why? These are not money-generating centers for a healthcare provider, and there’s more likelihood that you will get frustrated, give up, and pay the bill.
Calling these centers can be very frustrating, and here is why. They aren’t going to have high-valued, costly staff answering patient calls, which means you get an untrained or unknowledgeable representative. They will not be able to understand the details of a patient account and will simply regurgitate what they see in the system or notes written by an accounts receivable staff member. They will take a message or refer you to someone else, and often, they won’t get back to you and you will have to call several times for resolution.
There are a couple of scenarios in which a credit balance may exist but is not owed to the patient. One is when an insurance company accidentally pays the claim twice, and the other is when the electronic remittance advice (ERA), which is an electronic document of an explanation of benefits (EOB), gets posted to a patient account twice.
Knowledge is power, and it’s important you track your insurance expenses like you would any others. If you aren’t one to track expenses, this is an area you will particularly want to, because many healthcare providers will keep your dollars unless you show vigilance.
- Know your policy and have a deep understanding of your financial obligations. I know this sounds like a broken record by now, but I can’t tell you just how important this is.
- Don’t be afraid to disagree with a provider of service if they demand more money than you think you owe. Call your insurance company with them in front of you!
- Keep a record of how much you pay and to whom.
- Ask for a copy of your record every time before you leave. It’s good to have if you need to dispute anything from the visit.
- Match it up with the explanation of benefits (EOB) from your insurance company.
- Look at what it says you owed the provider and compare it the receipt; if you overpaid, call immediately and ask for a refund.
- Contact your insurance company and ask if there are any provisions in your provider’s contract with a timeline on which they need to provide patients refunds. Request a copy of that specific rule or guideline so that you can show your healthcare provider.
- READ the health provider’s financial policies, and if you don’t see mention of the refund policy, ask what it is and to have a copy in writing.
- If you are a Medicare or Medicaid patient, call customer service and let them know you overpaid and have them work with the provider. Everyone fears the government, but you can use that to your advantage.
- Contact the Better Business Bureau with your dispute, because they, too, scare healthcare professionals.