Monitoring your credit balances and following best practices can help you avoid
financial risks for your medical practice
Credit balances are the amount of improper payments or adjustments made to the practice that exceed the related posted charges. This means these credits are the amount of the balance in the encounter that consists of the excess of what is being sent out for that encounter for the payer.
It is important to identify the reason behind that extra money. Any balance within the encounter before the claim is sent, can´t exceed that amount.
- Reasons behind credit balances
- Monitor and understand the main issues
- Why is it important to be on top of your credit balances?
- Hire a trustful partner
Reasons behind credit balances
Let´s review some of the main reasons why medical practices struggle with credit balances.
These can include billing and payment errors, as well as limitations on the part of both hospital and payer systems.
Some of the reasons behind credit balances are:
According to the Healthcare Financial Management Association (HFMA), credit balances occur due to 3 major reasons:
- 55% Incorrect posting of allowances
- 35% Duplicate payments and overpayments by patients and payers
- 10% Missed postings
Understand the reasons behind your credit balances is key to improve the way you are managing these balances on your medical practice to avoid financial risks.
Monitor and understand the main issues
So, how can you be on top of your credit balances?
To identify the root causes behind your credit balances, it is important to go into your PMS (Practice Management System). This needs to be done on a daily basis to keep track of your balances. It is important to check the encounters where the charge amount is more than the posted one.
Getting into your system and monitoring these balances on a daily basis is the only way out to understand credit balances in your medical practice and solve them one by one.
However, for medical practices this task might seem exhausting. Medical practices have many encounters on a daily basis. They need to keep track of every encounter and verify if there´s any credit balance. This detail oriented and time-consuming task can lead to burnout.
Why is it important to be on top of your credit balances?
Not solving your credit balances on time can lead to multiple financial risks for your medical practice such as:
If you focus on monitoring and fixing your credit balances, you will be able to avoid these financial risks.
In case of Government payers, when there´s any compliance issue for any encounter the Credit Balances Team is obligated to refund that payment. This needs to be done within 30 days after the extra payment was seen in the system.Payers might put a series of penalties on the medical practice if those issues aren´t fix.
The greatest risk of credit balances is suspension of Medicare payments. Non-compliance with federal regulations concerning credit balances can result in fines and imprisonment. It is important that providers develop and maintain valid documentation. Your team needs to determine credit balances attributable to Medicare to show each patient record that has a credit balance.
Hire a trustful partner
Outsourcing your medical billing, including your credit balances, can help you relieve your staff from this administrative burden and make sure there´s a team focused on this specific task for your medical practice.
Make sure your credit balance´s team has an in-depth understanding of your internal processes and specific objectives. They need to have overall flexibility to customize an approach that fits your medical practice´s needs.
Health Prime´s Credit Balances Team will help you examine your billing data to pinpoint erroneous patterns that lead to overpayments.
Our business intelligence platform Health Prime Datalytics can help you drill through your credit balances so you can focus on improving your processes. Our team will review this data on your specific account. They will proactively identify areas of improvement and set action plans as needed.
If you want to know more about how you can be on top of your credit balances, feel free to reach out to us at email@example.com. Also, make sure you subscribe to our Health Prime blog. Stay tuned on all the latest updates on how to improve your medical practice and make sure you are getting paid for your work.