Refunds & Prepayments-Refunds & Prepayments

Refunds & Prepayments - Executive Summary

Pdf Summary

This summary highlights key insights from a webinar on financial best practices in medical practices, focusing on refunds, prepayments, and collections to ensure accurate finances, reduce liabilities, and boost cash flow.<br /><br />Speakers Carol Ittig and Sondra Young emphasized the high cost of poor financial hygiene, illustrated by a Florida case where $4 million in credits were found, but only $40,000 were valid refunds, resulting in audits and months of verification. Inaccurate records increase regulatory risks.<br /><br />Time-of-Service (TOS) collections, such as collecting co-pays and balances before or at the visit, significantly reduce unpaid accounts sent to collections, where recovery rates are low. Pre-visit steps include patient registration, insurance verification, and automated reminders via text or phone. Prepayments, especially for elective surgeries, require deposits at least seven days in advance to prevent financial leakage.<br /><br />Technology tools—AthenaPractice, Availity, Phreesia, and Encoda—streamline revenue cycle management by providing real-time insurance verification and daily reporting, enabling staff to estimate patient financial responsibility proactively. This reduces claim denials and improves patient communication about expected costs.<br /><br />Compliance with the No Surprises Act mandates providing Good Faith Estimates to uninsured or self-pay patients to avoid penalties and dissatisfaction. Overpayments commonly arise from billing errors or outdated systems; state laws on refund handling differ, and failure to comply can lead to substantial fines.<br /><br />Collection policies now favor refined strategies: balances under $100 are not sent to collections; balances over $500 require multiple contact attempts within a 120-day period before collection action. Legal considerations include varying state Prompt Pay and Recoupment laws and a 2023 CFPB ruling removing medical debt from credit reports to encourage fair billing.<br /><br />The webinar concludes that medical practices benefit from proactive financial workflows, transparent patient communication, consistent audits, staff training on refunds, and adherence to regulations—ultimately reducing financial risks and improving revenue retention.

Keywords

financial best practices

medical practices

refunds

prepayments

collections

Time-of-Service collections

revenue cycle management

No Surprises Act

patient communication

compliance and audits