Chat with us, powered by LiveChat
discover

Quick Reads

by Plutus Health

home
Quick Reads
home
Quick reads
October 29, 2021

Credit Balance Resolution

by Plutus Health
Top 3 Unknown ASC Coding Tips to Reduce Denials Revealed

The Healthcare Financial Management Association (HFMA) estimates that a small-to-medium-size Hospital generates approximately $2M in credit balances annually. 

The credit balance is a liability that sits in the account receivable (A/R) folder and carries the liability of genuine compliance and financial risks. It is the medical billing service provider's responsibility to manage those risks. With the greater emphasis on billing and collections, there are growing volumes of credit balances that accumulate within A/R, and these unresolved credit balances represent a significant source of medical expense recoveries to healthcare Payers, while also in some cases signifying compliance risks and penalties.

It is essential for providers to partner with a vendor to expedite and maximize credit balance refunds. 

According to the Social Security Act, Section 1128J, 

"any funds that a person/agency receives or retains under Title XVIII or XIX to which the person, after applicable reconciliation, is not entitled, constitutes an overpayment. These can include claims for services after benefits have been exhausted, payment for non-medically necessary services, duplicate payments, and payment of claims that exceeded a reasonable charge. These are usually caused by contractual 'over adjustments,' misapplication of payments, and overpayments."

Medical billing industry data shows that 35% plus of the credit balances are caused by incorrect allowances posting. Federal Register issued rules on credit balancing in March 2016 and as per the rules:

  • Healthcare Providers should repay the Medicare over payments within (60) sixty days of finding the overpayment, but they can take up to six months to investigate and confirm suspected overpayments.
  • Providers are responsible for repaying the identified overpayments in the past six (6)years.
  • Refunds claim adjustments, credit balance, etc., can be used to repay overpayments.

The Healthcare Financial Management Association (HFMA) says credit balances occur due to 3 primary reasons:

  • 55% incorrect posting of allowances
  • 35% duplicate payments and overpayments by patients and payers
  • 10% missed-postings

Partner With Right Vendor

While choosing a credit balance vendor, ensure the vendor is equipped to provide online, on-demand reporting, including drill-down capabilities, error code analysis, and Provider trending. The vendor will need to compare results with in-depth root-cause analytics to uncover systemic problems to be resolved and discontinued. The vendor must ensure that all data and communications are secure and compliant with HIPAA regulations.

Plan An Effective Strategy

One of the primary roles of a credit balance vendor is to examine billing data to pinpoint erroneous patterns that lead to overpayments. The most effective way to deal with credit balances is to identify the root cause of errors to prevent them from recurring. To develop a solid strategy for resolving over payments and preventing errors, the credit balance team needs to have an in-depth understanding of internal processes and specific business objectives and the overall flexibility to customize an approach that fits an organization's particular needs.

Best Practices For Credit Balance Resolution

1.     Identify true overpayments

2.     Work balances from the oldest to newest

3.     Analyze credit balances using :

  • Patient admissions forms
  • Payer remittance advice
  • Patient A/R details

4.     Identify if the patient is an eligible medical beneficiary

5.     Check if medical payment rules apply

6.     Identify Primary payer and other liable insurers

7.     Verify that all credit balances are due and refundable

8.     Monitor staff compliance with policies/procedures

9.     Identify preventable causes of credit balances

10.   Seek professional outsourcing assistance in case existing staff cannot handle credit balance resolutions

Partner with Plutus Health to solve your credit balance challenges. We offer customized solutions to help you manage and secure the financial viability of your healthcare organization.

Get Started

Please enter your details below and one of our team members will contact you shortly.


Website


Website
*We Value Your Privacy.
*We Value Your Privacy.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Discover