Consultant Susanne Madden offers a step-by-step guide to handling payer take-backs and not getting bullied into writing a check without researching the situation.
You know how this goes - you receive a letter from the insurance company requesting a refund for payments they made you because: there was a duplicate payment; the patient’s coverage was terminated; or they simply overpaid you on a claim. You’d like to send their money back except you can’t identify the patient, date of service, or even what service the insurer is referring to. There just isn’t sufficient information in the letter to do your own due diligence and either dispute the request or send them a check.
In most cases you have 30 days to respond to requests before the insurance company begins offsetting the amount against other claims, or sends you to a collection agency. Once they offset take-backs, you may have a hard time determining what should have been paid to patient X because the refund due on patient Y has been offset against it.
But, before you are bullied into writing a check, make the most of those 30 days:
• First, find out what the regulations are for your state. For example, in New York state recoveries are prohibited when a) payments were made more than two years ago (unless in the case of fraud or abuse) and b) in the case of retroactive termination of a member, no more than 120 days from date of service.
• Next, respond to the request by asking for more information from the payer if you need it to make a determination. If you believe that their request is not within regulations, or wrong for some other reason, state as much in the letter. Make sure to send it certified mail so you have verification of receipt by the payer. Ignoring requests for recoveries means consent to that request, so make sure you act quickly. And in some cases where offsets are not allowed, not responding to requests can actually result in complaints against you.
• Send a check if the overpayment is verifiable, rather than have the insurance company offset the amount. In some COB cases, an insurer may send you a request and give you 75-90 days to bill the other carrier before moving to offsets. Send the letter along with the claim to the other carrier and if the carrier pays you, pay the requesting insurer. However, if the other carrier denies the claim, make sure to send the denial to the requesting carrier. Sometimes they will write these claims off and no further action will be taken.
• Beware of recovery companies. Some insurers hire recovery agencies to collect on overpayments and other payments. You are under no obligation to discuss collection action over the phone if they call you. Request that all communication be conducted in writing and that they send you evidence of your debt. This will allow you to properly review the request and investigate your records in order to either dispute the request or settle it.
• Do not simply send the check back or issue a refund if you receive overpayments. Wait for the payer to request a refund. Why? Because, unless the check is sent to the right person in the right department it will not be handled appropriately. Your check could be cashed without being credited to your overpayment. Eventually, they will ask you for the money. Then you will have to go to the trouble of tracking down your cashed check and proving that you already returned the money. By that time, they may have already offset the amount against your other claims.
Most of all don’t panic. If you act in a timely manner, know your state regulations, and document all transactions between your practice and each payer, you should be well prepared to deal with payer take-backs.
Susanne Madden is founder and CEO of The Verden Group, a consulting firm that helps physicians handle the complexity and volume of change in managed care today. She writes and speaks frequently on all aspects of managed care. She can be reached at firstname.lastname@example.org or by visiting www.theverdengroup.com.
This article originally appeared in the March 2010 issue of Physicians Practice.