Beware Of Overpayment Collection Practices That May Lead To Lawsuits

posted by ClearCycle

on August 13, 2019

Medical insurance claims tend to be processed and paid very quickly after they are submitted.

Most payments are made to the “Provider” of the services (typically doctors or hospitals). Therefore, most overpayments are made to providers.

In many cases, additional information is received, or claims are audited after the payment is made.

The following chain of events creates claims for overpayments:

  • A medical claim is processed by the insurance company and paid.
  • After the payment is made, additional processing may occur, based on receipt of additional information or audits.
  • This results in an “adjustment” to the claim payment amount.
  • When the adjustment means that the payment should have been larger, it simply generates an additional payment.
  • However, many adjustments mean that an excess amount was originally paid. This creates an “Overpayment” or “AR” (Accounts Receivable).

In these situations, there is an opportunity for the health insurance company to “Recover” the overpayment (i.e., to get their money back).

In this regard, Clearcycle’s Valupay product has an overpayment collection process that is flexible to allow you to modify it to your overpayment collection system, as necessary.

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