Healthcare organizations that do not have trained staff or handle billing side by side with the patient often struggle with insurance recoupment and refund issues. Both can have a negative influence on the revenue from healthcare practices.
Refunds and recoupment invite legal consequences for healthcare organizations. However, understanding the difference between both of them and following the best practices to avoid the whirlpool of these giants is necessary for healthcare providers or medical billing companies in USA dealing with the financial side of healthcare practice.
What is a refund in medical billing?
Refund is the process of returning the extra amount to the insurance provider, which the doctor claims on behalf of the patient. For instance, healthcare providers submit the claim to receive $100, which was $80. On this claim, insurance providers submit the request for a refund of $20 as the payment he has paid is above the required amount.
If you want to avoid such problems, there are some tips and strategies that you can follow to avoid overpayments:
- Making use of those tools that do not give the exact margins
- The outdated patient information
- Miscalculations
- Duplicate payments
- Robotic payment systems
- Timing and scheduling issues.
What is recoupment in medical billing?
Recoupment is when an insurance company reclaims payment from a healthcare organization or doctor. This sometimes occurs when the insurance company has paid the amount for the healthcare process that the doctor has not performed or overpaid compared to the actual pay. There can be specific reasons, such as incorrect medical coding, billing errors, or performing specific medical procedures that were not medically required or included in the healthcare insurance.
Factors that lead to Recoupment in medical billing
There might be several factors that lead to recoupment from insurance companies and government payers:
- Unnecessary medical procedures
- Conracdtual obligations
- Mistakes in coding, i.e., upcoding, errors in documentation, or putting the wrong code.
- Submitting false claims or billing for treatments or medical procedures that were not performed.
- Violating the contractual agreements between healthcare organizations regarding reimbursement rates.
How to handle the recoupment?
There are several steps to avoid recoupment in medical billing.
Understand the root causes of recoupment:
Try to understand the root causes of the recoupment. Specific reasons can cause recoupments. For instance, they may be due to errors in coding, inaccurate billing, or errors in documents. Carefully reviewing the explanation of benefits (EOB) can also be helpful.
Appealing Recoupment Requests
Providers who contest the validity of a recoupment request have several options available. The first step is to request comprehensive documentation from the insurance company pertaining to the recoupment. This documentation should include details regarding the patient’s account, payment information, procedure codes utilized in medical billing, and verification of the service date. Subsequently, the medical provider disputing the recoupment request should cross-reference the contract terms to ensure compliance with established guidelines.
Additionally, it is advisable to consult the state’s insurance commissioner promptly upon receipt of the contested recoupment request. Some states impose stricter timelines for fund recoupment, which may impact potential legal proceedings in the future. During the document analysis, the provider should pinpoint areas of contract breach. This step is crucial in determining liability for the recoupment and the extent to which the financial agreement must be upheld.
Measures to Minimize Refunds and Recoupment Requests
Healthcare providers should:
Revise their internal administrative and medical billing procedures
- Offer training for administrative staff
- Improve patient information gathering and intake procedures
- Verify patient coverage during the scheduling phase
- Explore the option of outsourcing medical billing tasks to specialized third-party billers or agencies
Conclusion
Outsourcing helps small healthcare clinics concentrate on patient care instead of handling paperwork like billing. Figuring out the difference between refund and recoupment in medical billing can be hard. Instead of hiring and training staff for billing and admin work, clinics with refund and recoupment problems can hire outside help. This gives them more time to focus on patients. Plus, it gives peace of mind knowing that skilled billers use top billing methods to prevent future refund or recoupment issues.
FAQs
What does “claim recoupment” mean?
Claim recoupment is when someone returns money they should not have paid before. Specifically, it’s when a person argues that they should pay less money to someone else because that person owes them money from the same deal.
What’s a refund claim?
A refund claim is when you ask to get back money you already paid. If you have paid everything you owe, you will fill out a formal claim. If you haven’t paid everything, you will complete an informal one.
What does it mean to get reimbursed?
A reimbursement claim is when you pay for something, like hospital bills, and then get paid back by your insurance later. It’s like getting your money back for what you’ve already spent.