As the name implies, a Credit Balance happens when excess money is collected compared to the Charges for a service rendered by the Provider. This could be due to many reasons and has to be fixed while the final steps of medical claims processing are done. The Credit Balance could be due to an excess patient payment in the form of Co-insurance or Deductible; or it could be due to over-payments from the Insurance Payers. Let us analyze some scenarios and why it is important to be handled promptly:
Patient Credit Balance:
Patients might have paid an amount up front based on the assumption of what their Payers would cover. Once the medical claims processing is completed and the Payer pays in full, then the Patient’s payment is in excess. The physician billing solution can also call the patient and give the option of adjusting this excess against future visits or sending a check. But in either scenario, the Patient’s consent has to be obtained and is mandatory.
Payer Credit Balance:
Many a times the Credit Balance happens because of Over-payments by the Payers. Even the Patient’s Credit Balance is usually because the Payer paid more than anticipated. In medical claims processing, it is very important to handle the payments from Payers on priority. This not only projects the correct Cash flow as a result of the physician billing solution, but also prevents inflated AR. Some scenarios on Payer Credit Balances:
1) Both Primary and Secondary Payer pay as Primary
2) Payer pays more than Allowed amount by error
3) Cross-over errors, especially between Medicare and Medicaid
4) Privately purchased Plans – always pay as Primary, though there could be another Primary
Rules:
In all these instances, there are very strict guidelines and time frames within which the excess money has to be returned either to the Payer or to the Patient, as the case may be. In case of Payer errors, the Payer has to be notified of the error within 30-120 days depending on the Payer. Failure to notify within the timeframe could be viewed as ‘Fraud’ by the Payer and the State with stiff penalties. If the Payers refuse the refund (as in the case of privately purchased Plans), then that money belongs to the Patient and the Patient has to be notified. The medical claims processing and physician billing solution providers have to keep these requirements in mind and process the Credit Balances on a daily/weekly basis to avoid any trouble for the Provider and the Practice.
Recoupments and Offsets:
Some payers would adjust the payments for current and future claims against Credit Balances owed to other Payers which are Recoupments. When the Payers adjust the payments for current and future claims against the over-payments made in the past in their own Plans, these are called Offsets.
The best option to handle the 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 to know more about medical Claims billing and processing.