As its name implies, a Credit Balance occurs when an excess of money is charged in comparison to the Charges for a service provided by the Provider. This could be for many reasons and should be addressed while the final steps of medical claims processing are being performed. The credit balance could be due to an overpayment by the patient in the form of coinsurance or deductible; or it could be due to overpayments by Insurance Payers. Let’s break down a few scenarios and why it’s important to handle them promptly:
Patient Credit Balance:
Patients could have paid an amount up front based on the assumption of what their Payers would cover. Once the medical claims processing is complete and the Payer pays in full, then the Patient is overpaid. The physician billing solution can also call the patient and give them the option to adjust this excess against future visits or send a check. But in any scenario, the consent of the patient must be obtained and is mandatory.
Payment credit balance:
Many times the Credit Balance occurs due to Overpayments by Payers. Even the patient’s credit balance is usually due to the payer paying more than anticipated. In the processing of medical claims, it is very important to handle payments from Priority Payers. This not only projects the correct cash flow as a result of the physician billing solution, but also avoids inflated AR. Some scenarios about the payment of credit balances:
1) Both Primary and Secondary Pay as Primary
2) Paying the country more than the allowed amount by mistake
3) Cross errors, especially between Medicare and Medicaid
4) Privately purchased plans – always pay as Primary, even though there may be another Primary
Rules:
In all these cases, there are very strict guidelines and deadlines within which the excess money must be returned to the Payer or the Patient, as the case may be. In the event of Payer errors, the Payer must be notified of the error within 30 to 120 days, depending on the Payer. Failure to notify within the deadline could be viewed as ‘fraud’ by the payer and the state with severe penalties. If the Payers decline reimbursement (as in the case of Privately Purchased Plans), then that money belongs to the Patient and the Patient must be notified. Providers of medical billing and medical claims processing solutions should be aware of these requirements and process credit balances daily/weekly to avoid any issues for the provider and practice.
Recoveries and Compensations:
Some payers would adjust payments for current and future claims against Credit Balances due to other Payers that are Recoveries. When Payers adjust payments for current and future claims against overpayments made in the past in their own Plans, these are called Offsets.
The best option for managing credit balances is to outsource medical billing to a professional medical claims processing company.
Log on to http://www.mgsionline.com/medical-claims-billing.html for more information on billing and medical claims processing.