Jan Lasker Jun 17, 2022 3:31:52 PM 4 min read


Overpayments from patients and insurance companies can often occur in the healthcare space. When this happens, do you know the appropriate actions to take to resolve the situation and remain compliant?

As a first step, it’s helpful to know why the overpayments are occurring. They can be caused by a variety of reasons, including:

  • Wrong estimation – some practices estimate the patient responsibility for a service using special tools or software. If incorrect information is entered, this can result in an amount different than what the patient is actually responsible for paying.
  • Copays – some practices have a policy of collecting patient copays at time of service. Depending on the service rendered, when the insurance company processes the claim, they may not assign a copay responsibility to the patient.
  • Coordination of benefits issues with payers, which results in both the primary and secondary insurance reimbursing as primary.
  • Duplicate claims submitted to insurance, which can result in duplicate payments.

Patient Overpayments

If the patient overpays, the provider representative should investigate to ensure the credit is correct. If there are no other outstanding services, the patient should be refunded immediately. Some providers prefer to contact the patient first to explain the overpayment and allow them to determine if they want a refund or an account credit. Patient credits should be reviewed and refunded routinely, as many state regulations require overpayments to be returned within 30-60 days.

Insurance Overpayments

If the insurance company overpays on a claim, the provider representative should again investigate to ensure the credit is correct. If it is, contact the insurance company and ask them to explain how they processed the claim which resulted in an overpayment. If the credit is valid, ask the insurance company if they have a process to recoup the overpayment. If the insurance cannot or will not recoup the money, request that they reprocess the claim and send a formal request for a refund. If the provider receives a refund request that they determine is not valid after speaking with the insurance company, the provider representative can file an appeal to have the insurance company review the claim for processing errors. It is important to address this as soon as possible, as there may be defined time constraints for appeals in the contract with the insurance company.

Anytime an overpayment is discovered, providers should document all phone calls, correspondence, and checks, both with the patient and the insurance company. Accurate documentation is essential for protection from potential future action from patients or insurance companies.

While overpayments happen routinely in every practice, they can become a significant issue if the provider does not return the money. Processing and returning overpayments is a federal mandate and, if not managed correctly, can result in legal consequences. By proactively investigating credit balances and refunding when needed, you can help your practice stay compliant and reduce headaches down the road.