How to Post Insurance Refunds (“Takebacks”)

From time to time, insurance companies will ask you to reimburse them for an overpayment. Sometimes, the company will ask you to send them a refund check. Sometimes, they will underpay you for more recent charges in order to make up for the overpayment on an old charge.

Where is the Money?: When an insurance company informs you of an insurance refund or a takeback, you must first determine where the money is. Did you receive an insurance overpayment and post it to an Insurance Overpayment holding account? Or was the requested money posted against a charge on a family’s account? Use the EOB and your own records to figure out where the money being refunded or “taken back” is located. Then, you can follow one of the two procedures below.

Set Up a Procedure In Your System: To handle insurance refund requests or “takebacks,” you will need a procedure in the Procedures table in ted. You can create an “Insurance Takeback” procedure for money that needs to be reapplied to another account, or simply use an “Insurance Refund” procedure. Whatever procedures you use, they should have the accounting type “Receipt-Refund.”

Insurance Takeback of a Payment You Posted to Another Account

You may have posted the original payment against charges on an account, not recognizing that it was an overpayment. This is a big challenge for a billing department: how do you record that part of the payment for a new visit was actually paid by an overpayment, which is currently applied to an older charge on a different account? You need to move part of an old payment and apply it towards a more recent charge.

In this situation, you will post an Insurance Takeback procedure (with the accounting type “Receipt-Refund”), link the original payment to both it and any charges the original payment was supposed to pay off, decide what to do with the remaining balance on the old account, and then post the taken back amount towards charges on a new account (or mail the insurance company a check). Follow the steps below:

Run refund for the Account from which Money is Taken Back

Run refund from the Daily Operations window or by typing refund at a command prompt. Find the family account to which you originally posted the money.

Post the Insurance Takeback

Post an Insurance Takeback procedure for the amount that is taken back.

Run oops For the Account From Which Money is Taken Back

Run oops from the Daily Operations window, by typing oops at a command prompt, or by pressing F6Correct Mistakes while in refund.

Locate the Insurance Payment

Use Page Down and Page Up to find the insurance payment that the insurance company is taking back. Note the number adjacent to the payment.

Press F7Relink Payment and Select the Payment

Enter the number adjacent to the payment.

Choose the Insurance Takeback Procedure and the Procedures Originally Paid Off

From the list of all due charges, select the Insurance Takeback procedure you posted in refund. If only part of the payment is being taken back, you should link the payment to both the takeback and the original charge(s), as shown.

Press Enter to continue.

Distribute the Payment to the Takeback and the Original Charges

On the next screen, enter the full amount of the takeback next to the Insurance Takeback procedure. If only part of the original payment is being taken back, adjust how the remaining amount is distributed among other charges.

Press F1Save to finish.

Decide What to Do About the Remaining Balance

Since you are taking money back from a family account, there will now be a balance due. You can use oops to repend and rebatch the amount remaining on the charge to a secondary insurance company or Medicaid. Or, you can use pip or spam to adjust off the remaining balance. You could also send the account a personal bill for the balance.

Reapply the Money Taken Back

Since you have now adjusted off the takeback amount, you can apply the money elsewhere. You may mail a check to the insurance company, or post the amount towards an account listed on the EOB that announced the takeback.

Record Your Actions in fame

Run fame for each of the accounts affected by the takeback. Add notes to the Notes pages. Indicate what was done and how the money was moved.

Insurance Refund from a Holding or Overpayment Account

You may have posted an overpayment to a holding account, such as an “Insurance Overpayment” account. If so, you can post an Insurance Refund procedure (with an accounting type of “Receipt-Refund”) on the account, link the credit to the refund, and then post the amount towards the new account or mail the insurance company a check. Follow the steps below:

Post the Insurance Refund on the Overpayment Holding Account

Run refund from the Daily Operations window or by typing refund at a command prompt. Find the Insurance Overpayment account to which you originally posted the money. Post an Insurance Refund for the amount taken back.

Run oops and Relink the Payment to the Insurance Refund

Run oops for the Insurance Overpayment account and use F7Relink Payment to link the original overpayment to the Insurance Refund you posted in refund.

Reapply the Money Taken Back

Since you have now adjusted off the refund, you can apply the money elsewhere. You may mail a check to the insurance company, or post a payment on an account listed on the EOB announcing the refund.

Record Your Actions in fame

Run fame for any accounts affected by the refund. Add notes to the Notes pages. Indicate what was done and how the money was moved.

What About End-of-Day Reporting?: Insurance takebacks and refunds do not show up on the deposit report. The EOB that reported the takeback will increase the day’s deposit total by the amount of the takeback, but deposit can not list a negative payment. You should note the variance and share your actions with the other billers in your office. You can review insurance takebacks on the daysheet report. Run daysheet, choose the “wide” report, and check the payment column.

  • Last modified: February 3, 2020