One of the most frustrating insurance challenges is claiming a refund. You treat your patient and are paid for by both the patient and the health insurance company. Everything is fine, isn’t it? Then, months later, your office receives a letter saying the claim was paid in error and the money needs to be returned. Now you are faced with “collecting” the fee from the patient months after the end of the dental treatment.
Obviously frustration arises when we’ve done everything right on our side. The Office received a detailed breakdown of the fees. Someone from our staff checked insurance coverage the day of the procedure and the claim was correctly submitted and paid for. The office made everything perfect, so how can we possibly deal with this refund issue later?
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Most of our patients are employer-funded. The primary reason a “reimbursement claim” may be triggered is when a patient’s employment status changes. If a patient quits their job, for whatever reason, they typically lose their insurance coverage.
Notification and Time Delays
The chain of events that occurs after this change of employment involves multiple parties and may inadvertently introduce timing errors. Knowing how these errors happen is key to understanding how to respond to them. Here is a typical example and a timeline:
- March, 15: The employee’s employment ends.
- March 16: The patient comes to your practice for treatment.
- April 1: The human resources department (of the former employer) sends a list of people who have been unemployed since the previous month (and for whom they no longer pay contributions) to the insurance company.
- April 16: The health insurance company pays the entitlement to the treatment of your patient.
- 1 June: Insurance is processing the employment/insurance status change created and sent on April 1st.
- July 1: The insurance company examiner finds that he paid a claim on a patient who was uninsured at the time of treatment.
- 15th of July: The dental practice receives a reimbursement request.
In this example, on March 16, the patient would have been verified by the health insurance company because they had not received a notification of a job change, and you would have received your payment as usual. You are then later asked to send a refund to the insurance company because of a delay in information processing between the employee’s human resources department and the insurance company’s internal department. This scenario has been far more common in the post-COVID world where job shifts are much more common.
If you want to avoid getting caught in this no-win chain of employment reporting delays, the answer is simple: talk to your patients and know their latest employment status in advance. If a patient lost their job last week, or even yesterday, it probably doesn’t matter what the insurance company says on the phone because they don’t have the most up-to-date information. It is rare for an insurance policy to cover a patient for the entire month following termination of employment; Most cover the patient to the end of the occupation and not a second longer.
If you know a patient is past their employment date, the wisest option is to let the patient pay 100% out of pocket for their treatment (network fees, if contracted). Submit the application on behalf of the patient and mark Assignment (the check) to go to the patient. Legally, insurance must go the way of money. The insurance company must claim a refund from the entity that received the check (assignment). If the patient received the benefits directly, the insurance company cannot contact the dental office for that reimbursement because they never paid you to begin with. Instead, they would have to go to the patient or the employer’s human resources department to get that money.
ethics and politics
When it comes to this topic, the question arises again and again: If the office has done everything right, why should we deal with the problems between employers and insurance companies? This is an ethical issue. As you can see from the example timeline, the error is due to communication problems between the employer and the insurance company. The patient may also have some responsibility, but the dental office has absolutely nothing to do with the problem. For ethical reasons, dental practices and dentists should not be involved in the consequences at all.
Since the problem is between the employer and the insurance company, the final solution must be theirs as well. But it will only change by being regulated. Fortunately, this is one of several current legislative battles being fought at the national level.
Talk to your patients
Until politics catch up with ethics, dental teams need to understand what needs to be done to resolve and respond to the challenge of reimbursement claims. Talk to your patients, stay up to date on their employment status and respond to changes proactively and appropriately. You can avoid most insurance claims by being proactive about claims. Protect your practices and your patients from surprises!
Editor’s note: This article appeared in the October 2022 print edition dental economics Magazine. Dentists in North America are eligible for a free print subscription. Sign up here.