Resolving credit balances can bring your organization out of the red and into the green.
6-Step Checklist to Recover Revenue
- Adjustments are correct
- Patient cost-sharing amounts are correct
- No duplicate payment postings
- Payments went to correct payers
- No charge entry errors
- Corrected claims are accounted for
You may have encountered this situation: Your boss assigns you accounts receivable (A/R) follow up and among the various parameters, such as “over 90 days old” and “commercial payers only,” instructs you to “not work any credit balances.” Out of curiosity, you ask, “Why should I exclude credit balances from my A/R follow up?” Your boss replies, “Our company is focused on bringing more money in, not on sending money out.”
What is the flaw in this scenario? You might think that it’s because you asked, “Why?” That’s not it. The flaw is in the logic that credit balances shouldn’t be reviewed because they indicate money that needs to be returned. Aside from the rules, regulations, and ethics surrounding “keeping” revenue, credit balances need to be given the same amount of time and attention as debit balances because they can hide a mountain of collectible revenue.
Catch and Correct Common Causes for Credit Balances
Each organization has different levels of education among the revenue cycle team, and each practice management system has varying capabilities. The process to reduce or eliminate credit balances may be different for each one, but the causes of the credits are universal. Common causes for credit balances include:
- Adjustments are made incorrectly.
- Contractual adjustments posted do not match what is on the explanation of benefits (EOB)/electronic remittance advice (ERA).
- The insurance carrier incorrectly applies patient cost-sharing amounts.
- Payment posting is accidentally duplicated.
- The patient or insurance carrier is paid twice.
- Multiple carriers are inadvertently paid such as Workers’ Compensation and commercial carriers.
- The secondary carrier is processed and paid as the primary carrier.
- There are charge entry errors or corrected claims.
As you can see from this list, the causes of credit balances are not necessarily scenarios for when a bunch of checks must be written. Incorrect adjustments are the biggest culprit in hidden collectible revenue; there are many instances when an adjustment can cover up an unpaid line item. This type of error must be addressed quickly, or you risk missing the timely filing limit to send a corrected claim or an appeal.
Understand the Laws for Repayment
Make it a priority to understand the laws in your state and the guidelines outlined in the carrier contracts for returning funds to carriers and patients. Then, share what you have learned to the A/R cycle decision-makers in your organization. They’ll be happy you’ve helped to recoup payment owed to your practice, without breaking any laws.
For More Information: https://www.aapc.com/blog/49353-turn-credit-balances-into-revenue-opportunities/
