Post and Reverse Insurance Overpayments

Insurance companies sometimes pay you more than the remaining balance due on a charge or more than the contracted amount. Since you can not post more money than was due, and the payment may be “taken back” later, how can you track the overpayment?

And how do you reverse or reapply that amount, when the insurance company takes it back later?

Post a Payment to an Overpayment Holding Account

The first method, which PCC sets up by default for new practices, is to post the amount to an overpayment holding account. Your practice can use a patient named “Insurance Overpayments”, who is a dependent on an “Insurance Overpayments” account, or you can create multiple patients and accounts for different payers in order to track them separately.

When you receive an overpayment on an ERA, you can first post appropriate amounts against charges. Then use pam to post an Insurance Overpayment to the holding account.

Open pam for the Overpayment Account

Run the Posting Payments (pam) program from the Daily Operations window in your Practice Management windows. Find the Overpayment Account.

Post the Insurance Overpayment

Post the overpayment using the payment type of Insurance Overpayment.

Use the Check Number Field: You can use the Check # field to record information about the overpayment. For example, you can store the account number or the EOB’s check number. If the insurance company later sends you a reversal (or “takeback”), you will then have an easier time locating the overpayment.

Record Your Actions in Account Notes

Open the Account Notes for the Overpayment Account (or run fame) and add details about the overpayment to the account’s notes. You may also want to add a note to the account that the insurance company overpaid.

Post a Reversal (Takeback) from an Overpayment Holding Account

You can reverse an insurance payment quickly in PCC EHR.

However, if an insurance payer requests a refund of an overpayment you stored in an Insurance Overpayment account, first post an adjustment in refund and then link the payment to that refund. This removes the amount from the holding account, which you can then send back to the insurance company or use it to account for the shortened amount on the new ERA.

Post the Insurance Refund on the Overpayment Holding Account

Run refund from the Daily Operations window in Practice management. Find the Insurance Overpayment account to which you originally posted the money. Post an Insurance Refund for the amount taken back.

Link the Original Payment to that 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

As you have now linked the amount of the refund, you can apply the money elsewhere. This will most likely occur in the context of normal posting on an ERA, or you may need to mail a check to the insurance company.

Record Your Actions

Open the Payments tool or use the Account Editor (fame) to add Account Notes. Indicate what was done and how the money was moved.

Configuration and Setup

For the above procedures to work, your PCC system will need:

  • An “Insurance Overpayment” payment type in the Payment Types table in ted.
  • An account and patient for posting the overpayments. You can create one account to hold all overpayments, or multiple accounts for each insurance group. You could also create a single account for all overpayments and then create a dependent patient for each insurance group.

Contact PCC support for help creating the items above.

Other Overpayment Methods

The article above describes how to handle overpayments in an Insurance Overpayment account. Some practices prefer to store the overpayment on the original account for the claim where the overpayment occurred.

To use this method, a practice first posts an adjustment in refund, and then uses pam to post the overpayment amount against that refund.

PCC does not usually recommend this method, as when a future reversal comes from the payer, they often short a new check for the overpayment amount. Cleaning up after the takeback then requires making changes on the original account, which requires more steps and can be more difficult than simply refunding the amount from an overpayment holding account.

  • Last modified: November 27, 2023