Practice Management Alert

Don't let payers pressure your office into paying refund requests for mistakes they made on outdated claims they've already paid. Instead, deny their requests professionally, but firmly.

Here is an example of the type of untimely refund request you should deny. A commercial payer requests a payment refund for a patient's visits during April and May 2001. At the time of treatment, the commercial payer was the patient's primary insurer, and Medicare was the secondary insurer. The commercial payer lets you know in a refund request that the patient had been on long-term disability since her last day of employment, three years prior, so Medicare, not the commercial payer, was the primary insurer during the dates of your services. At the time of filing the claim, however, you were not aware of this information. By the time the commercial payer lets you know the mistake and requests a payback the Medicare filing time limit has expired.

If you filed the claim "in good faith," and the payer made the error, the insurance company should seek reimbursement from the patient, says Greg Chadwick, a billing expert. (That is, of course if you have no take-back provisions in your contract with the payer, in which case, you would have to pay up). A practice acts "in good faith" when it provides services to a patient and presents to the insurer written proof of loss, usually on a claims form. If the payer insists on a refund from your office, you have three choices: refund the request and lose deserved payment from Medicare, ask the patient to pay for the services, or deny the request and face a potential conflict with the payer.

None of these sounds appealing, but under certain circumstances denying the request will save your practice money, both in the short and long runs. You'll keep the payment for that one claim and establish a precedent for handling future refund requests from that payer. Send Payers a Letter If you deny the payer's refund request, send the insurance company a letter outlining your reasons for not sending back the claim's payment. Your letter should explain that:
the payment or overpayment was the insurance company's fault, which should have realized its mistake before paying the claim
you had no knowledge of the mistake
you provided the services
you got exactly what you deserved with the original payment, nothing more. You will find a sample letter outlining these stipulations in article 5. Establish Refund Deadlines One way to prevent untimely refund requests is to establish refund deadlines for insurance companies and include them in your contracts.

You could use the payer's timely filing deadlines as your refund period, one [...]