“I have observed a marked increase in the number of cases involving “refund theft” over the last several years.”
Did you know that for most offices, issuing a refund to a patient or an insurance company is an uncommon event?
Here are my suggestions to help with processing refunds in your practice.
Credit Card Refunds
Refunding to a credit or debit card should only be performed with proper authorization.
The merchant terminal in your practice should not allow employees to issue refunds to credit or debit cards without proper authorization. (i.e.: all refunds require an authorization code that is known only by practice owner)
Instructions on how you can set up your merchant terminal are in the user guide that came with your terminal or you can contact the company that processes your credit card payments and ask them for assistance.
Each month, review your merchant service statement to look for refunds. You can spot refunds on your merchant statement at a glance in the monthly summary.
If things don’t add up, examine and ask questions to find out why.
When refunding a patient or an insurance company by check, prepare and mail every check yourself – or have an external bookkeeper do it for you.
Do not prepare refund check and give it to an employee to put in the mail.
Whenever you are asked by an employee to issue a refund, make sure it is legitimate.
Examine the patient’s account and insurance EOBs, and other documents you need to verify that the refund is bona-fide.
When you prepare a patient refund check, look in the practice management software to confirm the patient’s correct address before mailing the check.
It may be a good idea to make a “refund form” that your employees must complete and submit whenever a refund is requested. This will establish a paper trail.
Previous Refund Checks
If you suspect that an employee may have taken refund checks that you issued in the past; go online to your bank and examine the images of cancelled refund checks.
Examine the backside of each cancelled check image to see if the depositor information matches the payee information. What you are looking for are markings on the back side of the check that suggest it was deposited into the “wrong account”
Often, a misappropriated check will end up being deposited into the same bank that the employee deposits their payroll, so look for a match.
If you have questions about this post, or require assistance, do not hesitate to contact me.