Practice Management Alert

When an insurance company requests a refund because of a mistake the insurance company made, Joey Hilario, a biller with the Jurani Clinic in Las Vegas, uses this template letter to deny the request.

Dear Sir or Madam:

We are in receipt of a refund request for $xxx.xx. According to our record, the claim has been paid accordingly, and no credit balance is on the account. We have applied all appropriate contractual adjustments, if they apply, and the patient has been balance billed for their responsibility, if any.

According to federal law, as a third-party creditor, we cannot be held liable for the mistakes on the insurance company's part. We obtained the patient's insurance card provided at the time of service, and there is no indication that we as a provider would have known that we would not be entitled to third-party payment, based on the patient's representation. If you are claiming an overpayment, we received the payment and explanation of benefits. We have provided services in good faith, and the funds received have been exhausted.

Several court cases come to mind on this circumstance. In 1992, a California case found that if a provider bills in good faith, and the insurance company accidentally pays the provider too much by the insurance company's calculation, the insurance company cannot collect a refund from the provider, as long as there was no misrepresentation or fraud on the provider's part in billing. (City of Hope Medical Center v. Superior Court of Los Angeles County {1992} 8 Cal. App 4th 633). (Also, Federated Mutual Insurance v. Good Samaritan Hospital, Wis. {1994}).

We feel that we have been properly reimbursed for the services rendered and no refund will be issued. If, in the future, you elect to deduct the alleged overpayment from future benefits to be paid, we will consult further legal counsel in order to ensure that our rights, as indicated by case law, are preserved.

Please do not hesitate to call me if you have any questions or need additional information. You can contact me at [insert phone number] Monday to Friday, from 9:00 a.m. until 5:00 p.m., Pacific Standard Time.

Sincerely,

[insert name here] Billing Manager