Maintaining Financial and Legal Control in Your Billing Practice: Start by Working Unapplied Credit Balances Immediately
If your staff aren’t working assigned unapplied credit balance reports weekly, you might run afoul of the law.
In the current healthcare field, replete with stringent financial restraints and finite resources, credit balances and unclaimed property balances may be draining the lifeblood out of your solvency. Failure of billing staff to work these elements on a weekly basis will result in false reporting of income. Add to that the increased regulations coming from both ACA (Affordable Care Act) and CMS (Centers for Medicare and Medicaid Services) as to the timeframe(s) in which credit balance issues must be resolved and you have the potential for financial and legal issues swamping a portion of your practice. To stay on top of this potential landmine, a proactive approach is essential.
Running a successful practice is a balancing act; make sure you come out on the right side of the scale
If your medical billing staff isn’t working unapplied credit balance reports weekly, you might have more debt and more problems than you think. Due to the complex, competitive nature of running a medical practice, labor costs and overtime can figure into the capacity for a provider to analyze credit balances in a timely fashion. Always look to exterior resources that you can leverage when your labor pool is stretched to the maximum limit.
This is not an area of medical billing to be left to chance
Increased scrutiny at the state and federal level is mandating that unclaimed property – credit balances, unapplied cash, unidentified remittances, patient refunds and overpayments – is subject to much closer observation. In order for your medical practice to mitigate financial or legal risk you must be assessing these elements of accounting on a weekly basis. It isn’t enough to just analyze these unclaimed property issues, you must resolve them.
Credit balance laws have been around for a long time; the ACA has modified those laws with new requirements
The ACA and CMS Medicare Reporting and Returning of Self-Identified Overpayment (60 day) make it essential for health care providers and organizations to look at their unclaimed property carefully and correct credit balances in a timely manner. The ACA has added a new set of laws and penalties surrounding the issue with more emphasis on the responsibility of the provider. If you are only running credit balance reports occasionally, you will run afoul of new laws in place.
Kane v. Healthfirst, Inc.
The lawsuit that started this ball rolling was Kane v. Healthfirst in New York. In layman’s terms, the results were as follows:
- Once a provider is made aware of an overpayment, a 60-day reporting period is initiated.
- The healthcare provider must use that 60-day period to analyze the overpayment and correct it to the satisfaction of the patient or client.
- Time is of the essence in the procedure. Failure to act promptly will result in either state or federal regulations being triggered. These regulations fall under financial law aegis and might initiate an audit of the provider.
Staying on top of credit balances is good business
Credit balances carry a certain degree of risk if left unresolved for any type of business. For the medical field, unresolved credit balances can result in several scenarios:
- Potentially displeased customers who can damage the reputation of the provider. Word of mouth is very important in the medical field – more so than other types of businesses. Failing to resolve a credit balance issue with a patient is an invitation to having your reputation suffer.
- Insurance credit balances are a sticking point for many insurance companies, allowing them to drive harder terms, or hoops, for the provider to jump through in order to receive payment. This can result in underpayment from the insurance company, creating a negative balance. It can also result in the insurance company attaching heightened analysis to all your bills, further delaying payout.
- Due to increased regulations and oversight, federal and state agencies are focusing on practices with multiple unresolved balance issues on the books. Having to go through a government mandated audit is both time-consuming and a threat to the reputation of your practice.
Credit balances are part and parcel of your composite financial picture. If you aren’t analyzing them weekly, you ignore a significant factor of your bottom line.
The best methods to ensure you are dealing with credit balances correctly
A medical provider needs to focus on assessing credit balances regularly and frequently. This is not a once a month scenario. Once an issue is identified as a credit balance, action can be taken immediately. Identify what kind of billing practices are creating these imbalances and if it can be corrected on your end. Some credit balance issues are not actually overpayments, rather they are administrative adjustments that result in what appears to be an overpayment.
Good financial controls alleviate unclaimed property issues
Within your medical practice, all due diligence must be applied to credit balances. To avoid unpleasant financial surprises, you should be running analysis on unclaimed property issues weekly. If that is difficult for your company due to labor and budget constraints, look to an outside expert. Leveraging outside experts in the medical billing field frees up your staff to do what they do best – take care of patients. When you use medical billing experts as your eyes on the issue, you are ensuring both legal compliance and accurate financial overviews consistently.
Get the help you need
The medical field is a complex industry: competitive, expensive and weighted with regulations and legal issues. Any assistance you get in streamlining billing practices and billing efficacy is a boon to your financial outlook. When you choose to leverage experts that can help you avoid both legal and financial issues, you are placing yourself far ahead of the curve.
Agnite Health LLC, an affiliate of Advantage Administration, Inc., has over 25 years of medical billing experience. We work harder, smarter and more efficiently than our competitors and we remain accountable for the services we provide. When you are ready to get more information please contact us.