Q: Can I refund money to the patient when the patient is not happy with the treatment and insurance has paid benefits? If so, do I need to notify the payer?

A: The doctor could refund the patient’s fee directly to the patient using a personal check. Then, the practice reimburses the doctor. This way the personal refund from the doctor may not be reportable to the National Practitioner Data Bank. The patient also needs to sign a waiver agreeing to this settlement of a full refund for treatment with which she is unhappy. These are only general guidelines and not legal advice. Be very cautious and check with your malpractice carrier and attorney for specific guidance prior to proceeding with any patient refunds.

Q: Does the practice have to refund a payer, when requested, due to the fact that the patient was
not actually eligible?

Scenario: The patient presented for treatment, eligibility verified, and a predetermination submitted. The patient completed treatment, the payer paid the claim, and the patient paid her portion. Later, we received a refund request from the payer stating the patient was not eligible for treatment on the date of service.

A: If this is a self-funded plan then the plan could take legal action against the provider to obtain the refund.
However, if you are a contracted provider for the TPA administering the self-funded dental plan’s claim, then your network provider contract will typically require you to refund the money in a timely manner. Review your network Processing Policy Manual and procedure manual to determine if it requires you to refund money that was paid in error. Many payers, after a period of time (30 to 60 days, but could be more than a year) will simply deduct the refund from another patient’s benefit payment. If the provider is out-of-network, this payment deduction could be challenged in small claims court.

  • If this is a fully insured plan, check with the state in which the plan was purchased to determine if the state has a law regarding refund requirements. Some states have set a time frame for recovery.
  • If the plan is a Workers’ Compensation or Medicaid plan, the plan may follow state law.
  • If the plan is a federal plan, follow the guidelines set by the plan for the refund appeals process.

Q: Is a payer allowed to reduce the benefit paid a provider when a refund was not provided in the
time allotted from a different billing entity and different provider?

A: Yes. There is no law in place to prevent recoupment of funds in this manner.

Q: A crown is prepped but submitted for payment based on the preparation date. However, the patient never returned for crown delivery and his portion is unpaid. The patient is not returning phone calls and a certified letter was sent to notify him that he needs to return for seating of the permanent crown restoration. What is the best way to handle this situation?

A: Always collect the patient’s portion prior to the start of treatment. Typically, a patient will return to have the crown seated if his portion has already been paid. The doctor has a responsibility to notify the payer if the crown is paid on the prep date but the patient does not return to have the crown seated. If the payer is not alerted of the patient’s noncompliance, the result is often considered overbilling. Contact the payer and ask how they would like you to handle the situation after a reasonable amount of time has passed (i.e., 6 months).

If the “incurred liability date” of the policy is the “prep date,” then the payer will usually not request a refund.

If the “incurred liability date” is the “seat date,” then the insurance company will usually request a refund.
If a refund is requested, submit the refund amount minus the lab bill and include a copy of the lab bill with
the refund. Some payers allow the practice to retain the cost of the lab bill, while others do not. Keep in
mind that most PPOs generally require services be billed when completed. Check your PPO Processing Policy Manual for specifics.

It is important to know the plan’s “incurred liability date” and to collect the patient’s portion at the prep
appointment to help avoid this situation. When the claim is submitted and processed based on the prep date, but the liability date is the seat date, it can affect the patient’s benefit. The patient can then file a complaint against the doctor with the State Dental Board for not submitting the claim based on the liability date (seat date), resulting in legal sanctions by the board.