What Is An Overpayment In Medical Billing, And In What Way To Recuperate It?


Overpayments and medical billing problems dishevel the revenue stream and your practice’s reputation within the community you serve. If you fail to repay the overpayment of the insurance providers or the patient, your practice may also face legal consequences. Other consequences of failing to pay the overpayment include a bad credit score, which implies that it may become harder for the practice to get medical supplies and equipment in the future. 

What Is Overpayment In Medical Billing?

The issue of overpayment mostly happens when a healthcare provider receives more money for their service from their patients or the insurance companies. An overpayment may occur due to several reasons, some of which are accidental and some intentional.

Failing to repay overpayments destroys a practice’s revenue stream and its reputation as well.  Although the accidental medical coding mistakes are intelligible, they should still be corrected, and overpayment should be repaid. 

Another thing that should be kept in mind is that failing to repay the overpayment to the insurance company or the patient is a criminal offense.  Under section 63 FR 70144 of the law, it is compulsory to follow these guidelines.  

How To Recuperate From Overpayment?

Overpayments generally do not cause serious issues. When a healthcare provider fails to repay the sum to the patient or the insurance provider on time, the problem occurs. Therefore, it is important that one should investigate and determine the reason for the overpayment whenever any discrepancy occurs in a payment. As soon as the source is recognized, one should react instantly instead of leaving it to pile up. 

How to recuperate when a patient overpays?

If a patient does an overpayment, the first thing to do is to contact the patient and provide them with an explanation of the overpayment. Then find out if they need account credit or a check. If it is evident that the patient will not come back to your practice, send them a check for the overpayment with an explanatory note. In the case of credit card receipts, it is important to ensure a refund on the card patient paid on.  Refunding on the wrong card will not be considered valid and will leave the practice open to chargebacks. 

Outsourcing medical billing services watch before this refund process and secures your practice from the rotten eggs that take advantage or extract unnecessary funds from this situation. 

How to recuperate when the insurance company overpays?

If an insurance provider does an overpayment, the foremost thing is to contact the insurance company. Medical practice is legally obliged to pay back the overpayment even if the insurance company overlooks this overpayment. Therefore, it is vital to reach them via writing and keep a copy.  When the insurer makes a refund request, do ask them to explain the payment. Validation is essential before one refunds.  Another factor to look upon is the vendors who are recouping because paying back in duplicate is not something that is great for practice.  If there is an overpayment issue with the insurers, ask them to reprocess the claim and send a formal request. Overpayments should be paid, but not until the insurer pays the practice for what they owe. 

Ensure Documenting All Overpayments

As stated before, overpayment problems can become a severe legal problem. Particularly when an insurance company or patient accuses a medical practice of fraud and demands to review the medical billing services of the practice. Therefore, ensuring accurate documentation of every overpayment problem in the past is important. This is because these documents can prove you innocent against any legal action. This documentation should include:

  • Credits offered for the payment
  • Letters
  • Notes
  • Checks
  • Communication with the insurance providers
  • Track phone calls
  • Record the phone call

If you decide upon outsourcing medical billing services, the third party will take care of all the documentation. 

Why do overpayments occur? 

Here are the most common reasons for medical billing overpayments:

  • Using outdated medical billing technology.
  • Using inefficient medical billing technology.
  • Insufficiently trained staff.
  • Coding errors in medical billing.
  • Inefficient estimating tools.
  • Coordination of benefits issues.
  • Unable to verify the coverage details of the patient. 

Outsourcing medical billing services from a third party eradicates the above reasons that may result in an overpayment. This is because the medical billing services that these companies offer are from professionals and experts.  

How To Prevent Overpayments?

In case you want to prevent overpayments in the medical billing of your practice, or if you have faced overpayment problems in the past, follow the following prevention methods:

Use Updated Coding 

The coding in medical billing keeps on changing constantly. It is essential to keep your practice up to date with the medical billing code books. This is because using an old code can cause an error which may result in an overpayment.  

Use Updated Software

Medical coding errors and outdated software are missed by the system, causing the issues of overpayments and requests for recoupment. Therefore, it is important to use up-to-date medical billing services and software in order to decrease mistakes that occur while submitting the claims.  

Offer Training Opportunities To The Staff

If your medical practice has in-built medical billing services, it is essential that the staff handling the medical billing process be highly trained and must be up to date with the best medical billing practices. 

Outsourcing Medical Billing Services

Third-party medical billing companies, such as UControl Billing, have highly trained experts who are well-versed in medical billing services. The highly trained staff of UControl Billing will keep an eye on the medical billing errors and will prevent overpayments issues. For more information, visit their website now!