Turn Credit Balances Into Revenue Opportunities

Turn Credit Balances Into Revenue Opportunities

Resolving credit balances can bring your organization out of the red and into the green.

6-Step Checklist to Recover Revenue

  • Adjustments are correct
  • Patient cost-sharing amounts are correct
  • No duplicate payment postings
  • Payments went to correct payers
  • No charge entry errors
  • Corrected claims are accounted for

You  may have encountered this situation: Your boss assigns you accounts receivable (A/R) follow up and among the various parameters, such as “over 90 days old” and “commercial payers only,” instructs you to “not work any credit balances.” Out of curiosity, you ask, “Why should I exclude credit balances from my A/R follow up?” Your boss replies, “Our company is focused on bringing more money in, not on sending money out.”

What is the flaw in this scenario? You might think that it’s because you asked, “Why?” That’s not it. The flaw is in the logic that credit balances shouldn’t be reviewed because they indicate money that needs to be returned. Aside from the rules, regulations, and ethics surrounding “keeping” revenue, credit balances need to be given the same amount of time and attention as debit balances because they can hide a mountain of collectible revenue.

Catch and Correct Common Causes for Credit Balances

Each organization has different levels of education among the revenue cycle team, and each practice management system has varying capabilities. The process to reduce or eliminate credit balances may be different for each one, but the causes of the credits are universal. Common causes for credit balances include:

  • Adjustments are made incorrectly.
  • Contractual adjustments posted do not match what is on the explanation of benefits (EOB)/electronic remittance advice (ERA).
  • The insurance carrier incorrectly applies patient cost-sharing amounts.
  • Payment posting is accidentally duplicated.
  • The patient or insurance carrier is paid twice.
  • Multiple carriers are inadvertently paid such as Workers’ Compensation and commercial carriers.
  • The secondary carrier is processed and paid as the primary carrier.
  • There are charge entry errors or corrected claims.

As you can see from this list, the causes of credit balances are not necessarily scenarios for when a bunch of checks must be written. Incorrect adjustments are the biggest culprit in hidden collectible revenue; there are many instances when an adjustment can cover up an unpaid line item. This type of error must be addressed quickly, or you risk missing the timely filing limit to send a corrected claim or an appeal.

CPB : Online Medical Billing Course

Understand the Laws for Repayment

Make it a priority to understand the laws in your state and the guidelines outlined in the carrier contracts for returning funds to carriers and patients. Then, share what you have learned to the A/R cycle decision-makers in your organization. They’ll be happy you’ve helped to recoup payment owed to your practice, without breaking any laws.

Vanessa Moldovan, CPC, CPMA, CPPM

Vanessa L. Moldovan, CPC, CPMA, CPPM, is a revenue cycle expert at Medic Management, LLC. Her focus for more than 17 years has been on education and the physician revenue cycle. Moldovan holds a Bachelor of Arts degree in Healthcare Administration from Ashford University. She has worked as a revenue cycle as-sessor, a revenue cycle manager, an executive account manager, and a consultant. Moldovan is the NAB’s Region 5 representative. She has been serving as a Des Plaines, Illinois, local chapter officer since 2013; she served as president from 2014-2017, and is 2018 educational officer.

One Response to “Turn Credit Balances Into Revenue Opportunities”

  1. Blanca Duarte says:

    What if the Secondary (TriCare) pays at the primary rate? And it was billed as the secondary with the primary’s EOB ( BCBS TX)and causing a overpayment. A refund was issued but was returned from the Secondary Payor advising the payment was correct but in reality it was not. How do should this be handled? Please Help.

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