Credit Balances – It’s Not Yours to Keep

Most health care providers are familiar with the concept of a “credit balance”. A credit balance can occur when a health care provider is overpaid for a service that was provided. Sometimes the credit balance can occur when a patient or the patient’s third-party insurer pays too much for the service provided. Other times a credit balance may occur when there is more than one insurer and both insurers pay for the same service. For a variety of innocent reasons credit balances are not uncommon in a health care practice.

Regardless of how a credit balance comes to exist, health care providers have obligations under state and/or Federal law to properly return any overpaid amount. When a credit balance results from the overpayment by a Federal payor, like Medicare, or a joint Federal/State payor, like Medicaid, health care providers must take great care to insure than any overpaid amounts are promptly returned. Failure to return such funds within 60 days of when an overpayment is identified1 could subject a health care provider to liability under the Federal False Claims Act, as well as any applicable state False Claims Act.

In a recent settlement, announced on October 13, 2017, by the United States Attorney’s Office for the Middle District of Florida, a Jacksonville, Florida medical practice agreed to pay almost $450,000 to settle its alleged failure to return over $175,000 owed to Federal and State payors. The $175,000 represented funds that the practice had been overpaid yet failed to timely return after the practice became aware of the overpayments. Interestingly, the matter was brought to the attention of the government by a former employee whistleblower that alleged that he had repeatedly advised the practice of the credit balances and strongly encourage them to initiate repayment.

The following is a link the press release from the United States Attorney’s office that handled the case:

Prepared by

Bill Dillon
Board Certified in Health Law
Messer Caparello, P.A.
[email protected]

1See, for a discussion of when an overpayment is “identified”. The 60 day period begins on the day that an overpayment was identified after the exercise of reasonable diligence to confirm the overpayment.