practice management system

Verification of Proper Insurance Retractions in Pediatric Practices

January 20, 2012 in Uncategorized by support Team  |  Comments Off on Verification of Proper Insurance Retractions in Pediatric Practices

Insurance retractions occur routinely in a busy Pediatric Practice. A retraction of money occurs when a practice owes insurance plan money due, usually, to the insurance company overpaying or incorrectly paying the practice. Some reasons why an insurance company might incorrectly pay a practice for a patient visit include:

• The patient’s insurance expired or is invalid.

• The claim system of the insurance company incorrectly paid higher than the contract amount.

• The patient has a high deductible plan and the insurance company incorrectly paid the practice prior to the patient deductible being met.

A practice management system should be able to adjust to these changes at a claim level and appropriately record the retraction. A retraction for one patient can be split over multiple payments. Note that each retraction needs to be verified by the Biller after they receive the payment summary or other documentation of the retraction from the managed care plan. These adjustments happen for various reasons and require the biller to continuously update the claim in the system.

Let’s look at an example:

Patient John Smith Visits ABC Pediatrics on January 4, 2012. ABC Pediatrics bills the Insurance provided by John Smith, receives a payment of $431 on February 2, 2012 then on April 10, 2012, ABC Pediatrics receives a statement that John Smith was not a valid member of the insurance so the practice needs to pay back the $431. The next payment is for $200 on a different patient – so the plan documents that the practice now owes the plan $231 ($431-$200) and that the EFT check for that patient is $0 (since the plan reduced the liability to the practice by $200 for John Smith’s correction).

The practice management system should have a method to update the claim for the changes so that these changes are properly documented as a credit and debit in the system. If you are unsure, call your practice management vendor for help and assistance.