Situation where provider submits an unsolicited refund check back to the payer.
Per the guide when adjudication results have been modified from previous reporting you are required to report a reversal of the original and a corrected claim (Section 1.10.2.8) To show the receipt and processing of the refund check you would use the PLB 72 but the guide states this adjustment must be always be offset by some other PLB (PLB WO). If the PLB 72 wasn’t offset by the PLB WO the transaction would balance but because of the offsetting PLB WO it doesn’t. It seems that the PLB WO offset (for the PLB 72) and any other PLB to balance the transaction in theory would offset each other, so to simplify for the provider it would make sense to just report the PLB 72. Is this situation just missing from the guide where you wouldn’t have to offset the PLB 72 in this type of situation? If not missing, how are you to report it in the 835?
The 005010X221A1 guide does not address the situation where the provider identifies the need for a refund and returns the money without being solicited by the payer. Therefore there is no requirement for a payer to acknowledge receipt of the refund check and/or report a reversal and correction for the impacted claims within the 835, for this particular business situation. Payers are free to establish an acknowledgment process outside the parameters of the 835 process. The guide, in section 1.10.2.17 – Overpayment Recovery, only addresses refund situations initiated by the payer.
In order to promote refund reporting via electronic means and keep the process automated via the 835, providers are encouraged to contact the payer and identify that a refund is needed, rather than submit an unsolicited paper refund check. The payer can then request or solicit the refund via the reversal and correction process within the 835, thereby keeping the process automated for both entities.
In the situation where the provider decides to submit an unsolicited refund check, the assumption is the provider has already corrected his patient accounting system, although there is no way for the payer to definitively know that information. Consequently, the workgroup believes automatically reporting a reversal and correction in the 835 could cause more accounting issues for the provider than alleviating them.
For consistency, if a payer does choose to accept and acknowledge receipt of the returned check within the 835, it is recommended the provider’s check be acknowledged by using the PLB Adjustment Codes of ‘72’ and ‘WO’ as defined in the manual-based Overpayment Recovery Option 2 process, identified is Section 1.10.2.17 of the 005010X221A1.
The workgroup will consider developing further guidance on this situation in the future