Credit balances are overpayments to the ophthalmic practice that result from patient billing or claims processing errors.

The errors include miscalculating patient benefits, collecting too much for deductible and/or coinsurance, or duplicate payments for claims from an insurance carrier or combination of carriers.

Credit balances can misstate the health of your practice’s accounts receivable. A high percentage of credit balances can falsely offset high accounts receivable. Credit balances should be identified in aging reports and worked as regularly as outstanding claims.

Failure to refund overpayments to contracted payers can result in penalties to the practice. According to Section 1128J(d) of the Social Security Act, a provider must report and return any self-identified overpayment to its Medicare administrative contractor (MAC) within 60 days of identifying the overpayment. Commercial payers define their own repayment terms in your contract.

Identify True Overpayments

Review payment history for the source of the overpayment. Verify from the payer remittance advice that all payments, write-offs, and patient responsibility have been applied appropriately. Verify that all credit balances are due and refundable. Avoid having unapplied funds on any account.

Confirm Who Gets the Refund

Identify the primary payer and other insurers who have made payment. Determine who receives the credit. Follow payer guidelines for identifying and reporting overpayments.

Work Balances From Oldest to Newest

Remember that money owed to payers must be repaid within a contract-defined period. Neglecting to refund patients in a timely manner can result in poor reviews for the practice or even doctor/patent trust issues. Start with the oldest credit balances, and issue refunds to the appropriate party. Make it a goal to address credit balances monthly just as you do accounts receivable.

Identify Preventable Causes of Credit Balances

Monitor staff compliance with policies and procedures. Ensure eligibility and benefits are checked for each date of service and all fees collected appropriately. Routinely audit claims posting for errors and involve staff on needed correction. When unique plan remits consistently differ from a payer’s standard co-insurance amounts, develop ways to educate your staff to collect correctly for that plan in the future. Always monitor for plan changes.