Saving a Treatment Facility from a $700,000 Insurance Take Back

Posted by Jenn Munson on Jul 8, 2018 6:41:41 PM
Jenn Munson

Your worst nightmare: an insurer wants a giant refund that could threaten the future of your facility. Here's what to do.

For behavioral health facilities, managing the billing and insurance process can be a nightmare. Even if your facility is maximizing its revenue with timely reimbursements and effective handling of authorizations and denials, you can still get hit with a costly surprise.

Imagine this scenario: your facility gets a bill from an insurance provider for $700,000. The insurer wants a refund of payments made on nearly 200 claims for services delivered by your facility. This is exactly what happened to one Elevated Billing Solutions client.

For many facilities, paying a refund of this size could put them out of business.

Proving the insurer wrong

Elevated Billing's recoveries department jumped in to understand why the insurance company believed there was a problem and worked to resolve it in the client's favor. In this case, the insurer claimed, incorrectly, that the facility was not a licensed provider for the services billed.

Starting with a letter of appeal, Elevated Billing worked on the facilitys behalf to prove that the take-back request was invalid. Four months later, the insurer agreed with Elevated Billing and rescinded its request for a refund. The facility could keep the $700,000 and continue its valuable work with its patients.

What to do if you get a refund request

While this situation was extreme in the size of the refund requestedit’s unfortunately not unusual that insurance companies request refunds, whether the request is legitimate or not.  First, determine whether the request is in error. Often insurers will cite missing records or other reasons for their after-the-fact denial of claims and request for refund. You or your billing outsourcing partner need to work diligently to demonstrate that there is a mistake and help rectify it by providing supporting evidence.

In the case of a legitimate refund request, all is not lost. You or your partner can negotiate terms for the refund with the insurer, often reducing the amount of the refund.

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