I had a case like this years ago, except the problem was found out when the parent received the EOB and the benign tumor had been coded as malignant, so you can imagine the horror this created. It has to be corrected because you are aware of it. Knowing this, the protocol to handle both situations is to send a letter of correction of the dx code to the insurance company along with any overpayment amount. I audit at a hospital and we are always refunding overpayments, while holding our breath that we do not get audited. Insurance companies are familiar with the overpayment from provider process and one RAC auditor mentioned to me that its the facilities that NEVER send an overpayment that we audit first.
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