United Behavioral Heath withholding reimbursement for IRS reasons????

Cavalier40

Guest
Messages
136
Location
Stuart, FL Sailfish Chapter
Best answers
0
I was going to post this in the Behavioral Health section, but this is more about general payment.

Our facility (which has only been open since August 2016) has had a portion of all UBH payments withheld on a special memo line with a remittance code the states: "The IRS requires us to withhold a percentage of benefits paid to the above taxpayer name and ID number. This amount has been sent to the IRS as prepaid federal taxes. The patient is not responsible for this payment."

Our facility is out of network and these plans are mostly self funded, but I have never heard of taxes being paid on insurance benefits, especially when they are assigned to the provider. The claims reps from UHC cant even see the withholding since it appears to be after adjudication so it only shows up on the remittance. One UHC rep suggested that we might owe back taxes but as I mentioned before our facility had only been open 17 months and there is no way any sort of lien would happen on the 2016 taxes and we haven't even begun to file our 2017 taxes.

If anyone can shed any light that would be great. I do have 3 separate investigations going on at UBH, but they wouldn't elevate this to the management level as of yet. I need to get resolution to this soon since its taking 28% of our revenue from UHC (which is are largest payer)

In 10 years of doing this I have never seen anything like this. Please help.
 
Usually it has something to do with the billing information/TIN provided doesn't match what is on file with the IRS. It comes up during the 1099 process and IRS requires a percentage of payments to be withheld until its rectified. Then once its resolved the withheld amount is claimed when filing taxes. Yes insurance companies are required to report to the IRS if payments are more than $600 a year, regardless of assignment of benefits or payments directly to patients. Though usually a warning letter is sent out before backup withholding begins.

Some limited info from the IRS on backup witholding (updated link, since old one is now 404 page).

https://www.irs.gov/taxtopics/tc307
 
Last edited:
Top