News You Can Use: Distinguish Between Different Overpayments

Too much money doesn't always spell trouble

In order to know when - and when not - to report an overpayment, you need to understand what overpayment entails and what your obligations are. People often use the terms "overpayment" and "credit balance" interchangeably, but they are not entirely synonymous. A credit balance can appear in several varieties, says Wayne Miller, Esq., founding partner of Compliance Law Group in Los Angeles. For instance, an accounting or "visible" credit balance could occur when you submit a claim for $100 with a contractual allowance of $20 - so you expect an $80 return but instead receive $180 for an unknown reason. In this case, "credit balance" refers to the difference between what you charged for and what you got paid.

Medicare's definition of credit balance, on the other hand, includes subtler mistakes as well - inconsistencies that may not reflect as credit balances in your records. The government counts any improper payment resulting from an error as a credit balance, regardless of whether you misinterpreted the law or coding requirements or simply made a mistake in transcription.
But be careful not to assume anything, Miller says. "A credit balance does not automatically mean that you had an overpayment. You may have a credit balance, and some of it may be an overpayment, and some may not. Some of it may simply be a mistake and neither a credit balance nor an overpayment," he says. "What you need to be able to explain is what created that credit balance."
For example, suppose you're dealing with multiple payers, and one of them repays you based on reasonable customary charges for the procedure. If you receive more than you charge each payer individually, the payment may be completely appropriate if the patient has two different coverages. In this case, you do have a credit balance, but you shouldn't consider it an "overpayment" -and it would be inappropriate to pay it back.


 

- Published on 2003-11-06