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Dealing with Patient Refunds at Your Practice


Patient refund requests surely come across your desk. Here's how to know when to cut a check and when to hold onto the overpayment temporarily.

I'm sure you've seen the requests come across your desk for patient refunds. This happens more when you have diligent staff that collects the copays, co-insurance, and deductibles, so it's not a bad problem to have. What's important is knowing when to refund the patient, and when to hold on to their overpayment (temporarily).

Typically, you have a patient that comes in for an appointment, and depending upon the visit type, may not return within the same month, or have multiple appointments throughout the month. Based upon how quickly your billing department bills out your claims (daily, weekly, monthly) you might find that you have over collected from your patient. This typically happens when a patient's deductible has been met, or the patient's annual out-of-pocket max has been met. If your diligent staff is still collecting that copay or co-insurance then this refund amount will be higher.

This is why it is so important to have that main contact with your billing department. They should be able to review the insurance EOBs and know if the patient has met his responsibility. Oddly enough, this also seems to be the only time the patients review the EOBs they receive.

If you have five dates of service that the insurance company has processed, but there is one that is outstanding. The patient has overpaid by $150, and is calling your office asking where their money is as it has been a month and a half, etc. In the meantime, the insurance company is now asking for chart notes, and this date of service is aging out in your A/R. A good policy to create, if you do not already have one, is to implement that all dates of service must be paid by the insurance company prior to any patient refunds.

Here are a few reasons why:

  1. The patient's insurance has termed, and they neglected to tell you. In this case, you can use the "overpayment" and apply it to any outstanding charges the patient has incurred.
  2. The insurance denies the claim for whatever reason they feel like using today, and you still have the "overpayment" that you can apply to that date of service.
  3. The insurance company reverses a charge either from your office or another physician resulting in the patient's deductible or out-of-pocket now not being completely met. This means that the "overpayment" will now be applied to the date of service you have outstanding and you do not have to use your resources to bill the patient again.

The most important thing to remember is to communicate with your patient when there is an overpayment. Investigate it thoroughly, and explain to the patient that if they can make a few phone calls to the insurance company, it will help move the insurance payment along. This will allow you to release any overpayment that there might be. The patient is the insurance company's customer. They really want to keep them happy, so asking the patient to step in and help get you paid, is a great tool to utilize in situations like this.

More often than not, if you go ahead and release that overpayment back to the patient while there are still outstanding claims, you might have to end up sending them a bill. The likelihood of obtaining payment on that bill is rather small, and you will be out of legitimate payment for your services.

Find out more about P.J. Cloud-Moulds and our other Pearls bloggers.

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