6 Recoupment Dilemmas, and How to Deal with Them

A recoupment happens when a dental insurance plan decides it paid a practice too much and takes the money back. The plan may send a refund request, or it may reduce a later payment, sometimes a payment for a different patient. Below are six common situations that lead to a recoupment, what to check in each one, and the steps to take when a notice arrives.

What is a dental insurance recoupment?

A recoupment, also called an offset, is how a plan recovers money it believes it overpaid. An ADA News column by a member of the American Dental Association (ADA) Council on Dental Benefit Programs explains that an overpayment can come from a processing error, such as a claim paid twice, or from information the plan learns after it pays, such as a coordination of benefits issue, a retroactive eligibility change or an audit finding. Whether the plan may withhold future payments depends largely on your provider agreement and on state law. Source: ADA News, “Dear ADA: Recoupments”.

Six situations that lead to a recoupment

1. The patient had other insurance you did not know about

When a patient is covered by two dental plans, one plan is primary and pays first. If the wrong plan paid as primary, it may ask for its payment back. Confirm which plan was primary on the date of service before you send a corrected claim or a refund. The ADA lists the usual rules: the plan that covers the patient as an employee or main policyholder is primary, and the plan that covers the patient as a dependent is secondary. Source: ADA guidance on coordination of benefits. Ask every patient about other coverage at each visit so the claim goes to the right plan first.

2. The patient’s coverage had ended

The ADA describes this as one of the most common reasons for a refund request: an employer ends a patient’s dental benefits but is late telling the plan, so the plan pays claims for a patient who was not covered on the date of service. Compare the notice with your eligibility check for that date and with the explanation of benefits (EOB). If the patient had a new plan on that date, the claim may need to go to the new plan. If there was no coverage, the balance may become the patient’s responsibility. Source: ADA on overpayment refund requests.

3. The fee schedule changed

If a plan paid at an old rate after a fee schedule change, it may ask for the difference. Keep every fee schedule notice a plan sends and record the date each change takes effect. When a notice arrives, compare the amount paid with the fee schedule that applied on the date of service. If the plan’s figures do not match your contract, dispute the request in writing through the plan’s dispute process.

4. The plan paid the same claim twice

Check your records for a duplicate submission and for two payments on the same procedure and date. If the plan did pay twice, the second payment is an overpayment and is normally returned. If your records show only one payment, send the plan your payment record and ask it to identify both payments.

5. The payment went to the wrong provider or was paid at the wrong benefit level

The ADA notes that a claim submitted with an incorrect provider name or a generic practice name can be paid incorrectly, for example an in-network claim paid as out of network. Check the treating dentist and billing details on the original claim against the payment. If the payment belongs to another provider or was made in error, contact the plan to have the claim reprocessed.

6. The plan audits your claims

An audit compares what was billed with what the patient record supports. Keep the records that support the original claim, note the response deadline on the audit request, and answer within it. Get qualified billing or legal advice when you disagree with the finding or the amount.

What to do when a recoupment notice arrives

1. Read the notice for the basics. According to the ADA News column, a proper notice identifies the original claim, the patient, the amount the plan believes it overpaid and the reason. If any of that is missing, ask the plan for it.
2. Check whether the plan is right. Review the original claim, the clinical record, the earlier payment and any related letters. Plans make mistakes too.
3. Read your contract. Many provider agreements allow the plan to offset future payments. The ADA explains recoupment clauses on its dental insurance contract issues page.
4. Find out which rules apply. The column notes that many states limit how far back a fully insured plan may recover an alleged overpayment, often 12 to 24 months, with exceptions such as fraud or coordination of benefits issues. Self-funded employer plans may take the position that those state rules do not apply to them. Confirm the plan type before you rely on state law.
5. Dispute promptly if you disagree. Dispute rights usually have deadlines, and missing one can make a reversal harder.
6. Keep the accounting straight. Link each recoupment to the original claim in the patient ledger, especially when the plan took the money from another patient’s payment.

This article is general information for dental practices, not legal advice. Recoupment rules vary by state, plan type and contract.

For the most common reasons claims are denied, see why dental insurance claims get denied, learn how to help prevent dental claim denials, review how the dental billing process works, and check our dental billing tips for practice teams, or explore our dental insurance billing services (2.75% rate, $250 monthly minimum, 30-day free trial) for claims follow-up, payment posting and accounts receivable support. Contact eDental Billing to discuss your practice’s billing needs.