Medical billing plays a significant role in the revenue cycle of any healthcare organization and, owing to its complex procedures, could be a tedious process to be handled for both providers and patients. Primarily healthcare providers identify credit balances as a severe pain spot in this crucial medical billing procedure as it causes a strain in the healthcare organization's revenue cycle in case of missing out on proper reconciliation.
One of the most significant risks of any healthcare revenue cycle is Credit Balance. These credit balances are the excess money collected towards the charges for the medical services provided. There are many causes for credit balance situations, such as over-payments from payers, and other payments could also be from the deductibles. Mostly the co-pays are the primary cause of credit balance. The healthcare provider must refund those amounts to the payer or the patient.
What are Credit Balances in Medical Billing?
While providing medical treatments and services, some overpayments are received for the rendered services. Those amounts become a financial liability in the healthcare organization’s Account Receivables books. These overpayments are referred to as credit balances. More precisely, it is the extra amount received incorrectly by the healthcare organization either from the payers, the patients, or the insurance company.
Significance of Credit Balance Resolution
It is observed that the higher the credit balance, the weaker the financial health of any organization. It is not an asset to the organization. The integrity of the overall healthcare organizations' revenue cycle and their goodwill are adversely affected by the credit balance in medical billing by its imposed threat. As it is, collecting the due payments for the medical services provided is a tedious and strenuous process. Also, ensuring reconciliation and refunding the excessive wrong payments is much more difficult.
The companies must ensure credit balance resolution and refund of the additional payments, and the healthcare providers' dire responsibility to return the excess charges within the specified time limits. According to the guidelines set by the Government, it is pretty clear that proper procedures need to be set to track the entire payments, identify any credit balances, and validate and immediately report them to ensure the on-time processing of all the refunds of overpayments.
Role of Credit Balance Services:
It is an annoying and tedious procedure task to work on reconciliation. It is necessary for various transactions to observe and identify any discrepancies vigilantly and to work on their rectification. It is a time-consuming and strenuous task. A team of knowledgeable professionals are highly experienced in excellent credit balance services. Outsourcing these services relieves the healthcare organizations of these complex tasks and enables them to utilize their resources more effectively to offer quality medical care to their patients.
What are the potential compliance risks from Credit Balances?
Some of the potential compliance risks from credit balances that could occur are as follows:
Litigation and Significant fines or imprisonment – Failing to refund the credit balances on time results in severe litigation and penalties or even imprisonment.
Inflated view of the financial health of the practice –An additional credit balance gives an inaccurate understanding of the Accounts Receivables situation, which further leads to wrong financial decisions
Affects the productivity of the A/R Team –Making use of extra resources or, in some cases, shifting the help from the Accounts Receivables team to resolve credit balances substantially impacts the team's productivity.
Reputation is affected –In case of any litigation; it creates a negative image about the healthcare organization, thereby reducing the practices' patient flow to a great extent.
Credit Balances and Refunds
Credit Balance of Patient – Every patient account gets carefully examined to identify and analyze the credit balances. Once done, the refund checks are initiated to reduce the account balance to zero.
Payers' Credit Balance – From the date of the request for a refund, it is mandated for the providers to process the refunds within 60 days. Every request gets carefully examined, and the refund gets processed if it is a valid request. At the same time, an appeal gets raised, followed by proper validation in case of an invalid request.
What is Seamless Approach to Resolve Credit Balance in RCM?
A thorough study in detail must be made of the complete book of accounts
The patient credit balance is to be carefully analyzed to recognize any patient liability and process those refunds resulting in an additional payment received from them, as well as to have a piece of proper knowledge on the same to overcome the challenges to steer clear from such errors.
You must analyze the insurance payers' credit balance to process the refunds for any genuine discrepancies. In case of invalid requests, could raise an appeal.
Careful examination for double payments on a raised single claim.
For a single claim, payments need to be checked by more than one insurance provider.
Detailed investigation to identify duplicate payments for a single claim from the patient or payer.
Benefits of an integrated and excellent Credit balances services:
There are several benefits to having an integrated and excellent credit balance services, such as
• They handle the complex task professionally with on-time credit balances and refunds.
• Adheres to proper guidelines to handle the credit balances.
• Protects your credibility and boosts your reputation with their practical and seamless process.
• Enhances patient satisfaction to a higher level.
• Improves your healthcare payer relationship.
• Boosts the healthcare providers' complete financial health.
• Helps to avoid litigations and significant fines.