INSURANCE COMPANY RECOVERY PAYMENT

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1 O f f i c e A l l y 1 INSURANCE COMPANY RECOVERY PAYMENT OVERVIEW Occasionally, the insurance company may realize they have overpaid for a reimbursement in a previous EOB/ERA. Rather than requesting a refund from the provider, the insurance company will simply adjust the payment in the future EOB/ERA in order to recover the funds. This means the actual payment received will be less than the payments itemized for posting on the EOB/ERA. This is a Two Step process. After receiving an EOB/ERA that states a previous overpayment has been made, and subtracts that amount from the current payment, you will need to first adjust the patient(s) account who had the overpayment, and secondly adjust the patient(s) account who received an underpayment. Both steps will be shown below. STEP 1- CORRECTING THE OVERPAYMENT You will need to adjust the patient s account who received an overpayment from the previous EOB/ERA. To do this, you will need to add the overpaid amount indicated on the current EOB/ERA back to the patient s balance, and possibly create a Billing Statement for them. Use a Debit Adjustment account to add the overpayment back to the patient s account. You may wish to make an account specifically for this use in your Chart of Accounts in Manage Office. For this example, the insurance company Benefit Solutions had paid $ for the patient Eileen Edwards in an August EOB/ERA. They now say they have overpaid by $ The current EOB/ERA will identify this overpayment, and will subtract this amount from another patient(s). Click on the Patient Visit Tab to find the patient with the Overpayment. Use the search criteria if desired. The patient Eileen Edwards has two visits with charges of $ each. Click the icon in the Edit column,, for one of the visits with an overpayment.

2 O f f i c e A l l y 2 You will be taken to the Edit Visit page. Click on the Billing Info tab, and scroll down to the Payments section. Click the Adjustment button. In the Apply Adjustment screen, select the proper Debit Adjustment account from the dropdown box. You may wish to make an account specifically for this use in your Chart of Accounts in Manage Office. Enter the dollar amount of the Overpayment for each line item. Check the box in the Complete column so this balance will appear in a Billing Report and/or Collection Report you generate for this patient. Change the Visit Status to specify this balance as an Insurance Overpayment for future identification purposes. Click Update when finished. You will be returned to the Patient Visits Tab where you will see the following results in the Billing Info tab.

3 O f f i c e A l l y 3 The Debit Adjustment will appear in the line item, adjusting the balance, and will be recorded in the Applied Payments section at the bottom of the page. This section will show the Account used, which if specified as an Insurance Refund, will help quickly identify the new balance in the future. Click Update when finished. Repeat this process for any other Overpayments for other visits and/or patients.

4 O f f i c e A l l y 4 STEP 2- CORRECTING THE UNDERPAYMENT For patients who were Underpaid in the current EOB/ERA due to the previous Overpayment, the Debit Adjustments made can now be added to their accounts as Credit Adjustments. This is done to replace the funds not given in the current EOB/ERA. You may wish to make an account specifically for this use in your Chart of Account in Manage Office. Apply the insurance payment as usual, as instructed by the EOB/ERA, up to the available amount. Once the payment has been fully applied and updated, click the icon in the Apply column,, on the Payments/Deposits page for the Insurance Payment. Use the Search button,, next to the Apply To: Patient ID field to select the patient that needs the credit applied to their account, and click Go to display their visits. Select the Credit Adjustment account for Insurance Underpayment in the Adjustment column.

5 O f f i c e A l l y 5 Enter the dollar amount needed in the Adjustment column. The dollar amount will be the amount that was Overpaid on the last EOB/ERA, and was Underpaid in this EOB/ERA. For this example, Eileen Edwards s account was Overpaid by $50.00, and was corrected with a Debit Adjustment for $ There is now $50.00 in which to Credit this account. As there is only a $35.00 balance, enter $35.00 in the Adjustment column, using the Credit Adjustment account for Insurance Underpayment. This will bring the balance down to $0.00 for Floyd Fairbanks, and leave $15 of credit for another account that was Underpaid. Click Update when finished. Repeat this process for all patients underpaid until the credit has been used. You have now made off-setting debit and credit adjustments, without recording payment dollars you did not receive. The patient s balances should be accurate, and the entries will be recorded in the visit.