Around this time of year, Fluence sends out a letter about submitting unclaimed patient refunds older than three years to the state’s Unclaimed Property division. Along with a formal letter describing the rules for this process, we will send you a list of the refund checks entered in QuickBooks that have not cleared within a year of being issued. However, this also requires further work on your part to track not only these, but other refunds and credit balances older than three years. A few things to note on this letter/list you’ll receive from us:
- The list we provide includes only check refunds that remain un-cashed after one year, which we will void in QuickBooks, but they only need to be reported once they’ve been outstanding after three years. The list will also provide the reporting period for each un-cashed check, so you’ll want to keep these lists to review periodically to ensure the checks weren’t voided or reissued during that time period.
- If they were voided due to error and/or reissued, the amount of the original un-cashed check would not need to be turned over to the state.
- Something our list does not show is credits that remain on patients’ accounts for longer than three years. This is why it is very important to review a credit balance report regularly – ideally monthly – to ensure all credit balances are accounted for. There are many reasons a credit balance may exist:
- A true patient or insurance overpayment – these should be issued as refunds regularly. For a patient overpayment, a patient may request to leave the balance on their account to offset future treatment. If this is the case, you’ll want to make sure you get it in writing from the patient. If you don’t have documentation to leave it on the account, even if the patient verbally tells you to do so, you still run the risk of them coming back and claiming you’ve been withholding their refund.
- Small balances – most practices have a small-balance write-off adjustment in place to clean these up. Typically, we see $5-$10; any balance – positive or negative – would be written off by the practice.
- The formal letter mentions this as well, but minimum-balance credit refunds do need to still be turned over to the state, but they can be reported in aggregate to reduce the burden of doing it all separately.
- Timing of posting production – if you receive a full payment upfront for treatment done over time but post the production as it happens, it can appear there is a credit balance on the account. These should resolve themselves once all the treatment is completed.
- Incorrect posting – sometimes things (usually production or adjustments) get posted incorrectly. This is another reason it’s important to review all credit balances regularly: to catch any mistakes that are resulting in incorrect balances on a patient’s account.
We have been seeing an uptick in Unclaimed Property audits recently so it’s extra important, this is something that is being looked at regularly. It may take some time upfront if it’s been a while since you’ve done an internal audit of all the credit balances and/or haven’t been turning over unclaimed property each year. It is worth it to do so sooner than later so it will be much easier to remain on top of it moving forward.