Insurance companies and government payers have hired audit companies in an attempt to reduce the amount of claims payments that the payer is paying out. These audit companies are usually paid a contingency fee, and they are looking for any actual and potential claim payment inaccuracies. Often a demand for refund is sent based on a potential error, not an actual error.

Before you return the money requested by the insurance company, you need to make sure that the payer did, in fact, send you an incorrect payment. Brush upon your rights, and make sure that the payer is following correct procedures, before you send them a check for the overpayment.

Most states have laws addressing the procedures required to request a payment refund. Make sure that the payer has followed the requirements required by your state. At the very least, make sure that the payer provides a specific reason for the request. You need this information to compare it with your billing and treatment records to see if there is an actual refund due to the payer. Dates, procedures, or billing codes may all be in dispute, and if you have good records you can easily dispute the refund request.

Understand the language within the policy or provider agreement under which the payer is requesting the refund. Many provider agreements have a ‘due and owing’ clause within the agreement. If the provider fulfills all of the requirements outlined by the agreement, then the benefits are ‘due and owing’. Simply knowing the language and procedures required by the policy or provider agreement may give you the information you need to refuse some demands for refunds by the payer.

Knowing the ‘extent or existence of treatment’ rules utilized by the payer may give you an advantage in refund request disputes. If the insurance company required pre-authorization, or if the benefits were exhausted, or the treatment not covered, but the insurance company paid you anyway, you may be entitled to keep the money. If the insurance company claims that incorrectly paid a claim through a mistake that it made, you may be allowed to keep the overpayment. Several courts have ruled that if the company didn’t follow its own procedures, it is at fault, and the provider is due its fee.

Most states also have a statute of limitations which controls the timing of refund requests. Make sure that the request for the refund is filed in a timely manner, or the request will not be valid.

Most requests for payment refunds can be resolved through accurate record keeping and billing. However, if after disputing the refund request with your factual data and the payer continues to demand the refund; you still feel that the refund request is erroneous; you can always obtain legal help. Some, if not many, of these refund requests are similar to initial claim denials. If the company routinely sends out refund requests, a certain percentage will be honored, and the expense will be justified. Turn the tables on the payer and make it more expensive to request the refund from your office, and they will back down.

Remember that many of these refund requests are just fishing expeditions, Knowing your rights and standing up for them will show the insurance company that know the facts, and they will stop harassing you and go after easier prey.

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This entry was posted on Tuesday, December 28th, 2010 and is filed under Business Trends, Practice Management. You can follow any responses to this entry through RSS 2.0. You can leave a response, or trackback from your own site.

7 Comments

• #1 by phyllis on December 28th, 2010
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  interesting article. Yes, we’ve seen a lot more of these requests, or just plain takebacks. It would be so helpful if we were given the correct contact person or board we should contact to determine what our particular State laws are, so that we would know our rights. It seems terribly unfair to me that any error we make is our error, and any error they make is still our error. Let’s level the playing field. If we have a limit on the time we can file, why do they have the right to go back 6 or 7 years to look at a claim and decide they have overpaid?
  
  
  
  
  
• #2 by Dr. Kuhne on December 28th, 2010
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  Most health plans will deduct the money they think they are owed from future payments. There is no way out. But the article seemed helpful.
  
  
  
  
  
• #3 by dr. harold holloway on December 29th, 2010
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  what are our rights?
  
  
  
  
  
• #4 by usha mukhtyar on December 30th, 2010
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  what are my rights
  what is time limit for refund request
  
  
  
  
  
• #5 by Dr. Ray Ruginis on January 7th, 2011
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  Unfortunately we have to play the game and the insurance companies make all the rules. Therapies that I’ve done inmy office for 30 years are now considered experimental by some insurance companies, so they will not pay for it.
  What can you do?
  
  
  
  
  
• #6 by Chris Carraway, DC, DIBCN, CLS on January 11th, 2011
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  I read a Medicare report were they stated that very every $1.00 they spend on an audit they recover $3.75. I would love to have and investment tool with that kind of yield. As EHR/EMR comes in to full swing and you are required to submitt your patient notes with each claim, they will be able to deny your payment in a much more efficent manner and you will never see the money in the first place. You just get to treat the patient for free and they accuse you of insurance fraud.
  Paperwork is going to become more a more complicated than it is now and then become more complicated than ever before. In some cases I am spending more time on the paperwork for a single visit than I did during the patient encounter.
  Each month more and more rules are put into play. More and more hoops to jump through. Some of the EHR and aduit effects are good and will benefit all parties concerned. But the effort to mantain all this monster is slowly becoming unmanageable.
  I had an issue with a carrier where they did not like some of the aspects of my daily notes. I could not see where they were calling me into error. I got the reviewer on the phone after way too much effort. There were 5 areas that this nurse saying were a problem. I went through them item by item. She conceded that I was not in error on 4 of the 5 items. I requested that the actions against me be amended, and she agreed that I was right. The end result was absolutely nothing happened. The next play was they claimed that the time limit had run out on the appeal (due to thier inaction).
  My next step was to file a complaint about that…that got now were either. I had to just take it on the chin.
  I am armed to the teeth with back up data and accepted practice protocols and whip them out to defend myself when need be. As the insurance companies become crafter and more aggressive. I move closer to a cash practice, which makes them happy I imagine. But I am also more ready to lash back quickly with a flurry counter attacks and more often than not win. But I find that staying up with the latest rule changes is a constant task.
  As an aside. One company that we have dealt with for years suddenly did not know who we were. I wrote them a letter about a problem and with all my address, phone, fax, email and provider ID number on the letter they still did not know which provider I was. Makes you wonder.
  Brace for impact my brothers and sisters. It’s going to be a bumpy ride.
  
  
  
  
  
• #7 by michael on February 2nd, 2011
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  When will the doctors organise and fight this total bullshit? Where are our leader? Remember the Data Bank and how all the bad physicians were to be black listed and identified? The thought was to extend this Data Bank to lawyers, but they vociferously objected, siting “loss of their privacy” and now the Data Bank has mysteriously disappeared. Going back to cash makes alot of sense to me.