What Is Recoupment in Medical Billing?

what is recoupment in medical billing

Medical billing can prove a tricky task for many medical practices. You have a set amount to bill the patient, but the insurance company may or may not pay for a portion of those services. Basic services that apply to most patients may not apply to this one.

These issues cause recoupment. What is recoupment in medical billing? As providers of medical billing and coding services, our team at PracticeForces breaks it down below. 

What Is Overpayment Concerning Medical Billing?

Sometimes, a patient will overpay for certain medical services. The practice typically sends an itemized bill to the patient. Ideally, this bill provides the following:

  • Service details and costs
  • Deductions from the insurance provider
  • The leftover costs paid by the patient

However, billing doesn’t always go so smoothly.

How Does Overpayment Occur?

Instead, insurance companies may not greenlight partial or full coverage until later. The current billing system may have an error that doesn’t calculate coverage within a certain timeframe. Either circumstance can lead to patient overpayment or even duplicate payment.

Other reasons for overpayment include:

  • Reprocessed insurance claim collections
  • Billing software mistakes
  • Conflicting policies between the healthcare and insurance providers

What Is Recoupment in Medical Billing?

When a patient overpays for their services, they and their insurance company begin the recoupment process. So what is recoupment in medical billing?

Recoupment is an automated process through which the affected parties recoup their overcharge.

You, the healthcare provider, have 15 or fewer days to respond to recoupment before the insurance company automatically pulls the money out of your practice’s account. Once you reply within the allotted time frame, the insurance company will process your response within 30 days to 60 days.

These disagreements put a lot on your already full plate. However, they don’t mean that you, as a healthcare practitioner, are at fault. Plus, you can reduce overpayments and recoupments by streamlining your medical billing and coding efforts.  

How to Avoid Recoupment and Overpayment

A reputable medical billing service can vastly improve your billing experience by eliminating the root causes of overpayment in the first place.

  1. Billing software mistakes can occur due to outdated software that fails to evolve with insurance demands.
  2. A suitable service provider uses both knowledgeable people and updated, cutting-edge technological solutions to ensure they can manage those demands.
  3. When insurance companies reprocess a claim, they can trigger duplicate payments or overpayments for specific services within a system at any given moment. You may not receive the pertinent information immediately. But outsourced billing and coding solutions never sleep. They stay on top of every change for you.
  4. When an insurance policy conflicts with a practice’s policies, this conflict can result in communication and billing issues. Strong billing solutions help staff members detect such discrepancies. 

Explore Medical Billing Solutions with PracticeForces

What is recoupment in medical billing? It is often the result of a breakdown in digital communication between your practice and the insurance company. But you can eliminate these issues with solutions like medical billing outsourcing. Contact PracticeForces at 727-291-9217 to inquire about our solutions and services.

Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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