Practice Management Alert

Offset payments can wreak havoc on your accounting books if you're not careful, so make sure you have a system in place to deal with them.
 
Here's the situation: An insurer decides it has paid you too much money, so it takes what it thinks it's owed out of future payment. "It's a nightmare, and insurers do it all the time," laments Barbara Cobuzzi, MBA, CPC, ChBME, president of Cash Flow Solutions in Lakewood, NJ. "Blue Cross Blue Shield is famous for it." In fact, sending the company a check in response to a refund request is maddening, "because you know they're going to take an offset before they process the refund," she says.
 
Another repeat offender to watch out for is Tricare, warns Lucia Yang, with Windsong Radiology Group in Williamsville, NY. Not only does Tricare come after providers often, but the insurer has a very long reach. "Most of the refund requests we receive, or offset payments, date as far back as 1999 claims," Yang reports.
 
And like BCBS, Tricare has a habit of hitting practices with a double-whammy by requesting a refund and offsetting payments, resulting in huge accounting and administrative headaches for the practice's billing office, Yang notes. "It creates a big mess because it takes months to recoup our payment," she tells Medical Office Billing & Collections Alert. "I am trying to work something out with them so that when they want a refund, they don't request a check from us, but rather go ahead and offset the payment."
 

Tip: When dealing with Tricare, your best bet is to send correspondence to the finance department's attention, Yang advises. This department deals with refund requests and offset payments, and while it may take them weeks to get back to you, "it is surprisingly more efficient than their customer service department," she says.  Here are more tips on how to handle offset payments most efficiently and effectively:
 
Check the facts. Don't assume that just because the payer says you owe money, that means it's really so. "When we receive a refund request or an offset payment, we initially research the account to make sure it's a valid request or a valid credit on the account," Yang says. Of course, the older the account, the more time and energy this process could take.

  Set up a system for flagging mystery offsets. Payers often offset payments without telling providers which accounts they are pulling the money from, which can create a huge bookkeeping problem. To manage this issue, Yang's office has established "miscellaneous income" accounts. That way, when the payer "offsets a payment without including which account they have transferred the credit from, we apply the payment to the miscellaneous income account," [...]