Prerequisites
- A credit balance report from your PMS
- Posting current so stale transactions do not create false credits
- A defined process for payer overpayments
- An uncashed-check ledger
The weekly discipline
1
Run the credit balance report weekly
A weekly report gives the team time to investigate possible overpayments and meet the applicable repayment window. For dental groups, Medicaid is commonly the primary federal-program exposure, including payments administered through a dental benefit administrator. Coordinate the identification date and deadline with counsel.
2
Triage by source
3
Resolve within 30 days
Anything older than 30 days gets escalated. Anything over 90 days is a finding.
4
Reconcile against open disputes before refunding
A patient with an open chargeback and a credit balance on the same encounter is a double-refund waiting to happen.
Patient credits
Never apply a patient credit forward without consent. Applying it to a future visit converts the patient’s money into a prepayment they did not agree to. Ask, and document the answer. In some states this is also a refund-timing violation.
Payer overpayments
Materially different obligations. For commercial payers, the contract governs, typically requiring refund within a stated period, with the payer often entitled to recoup by offset if you don’t.The escheatment pipeline
Unrefunded, unclaimed money does not become yours. It becomes unclaimed property owed to the state. Keep an uncashed-check ledger from day one: check number, amount, payee, issue date, clear date. Reconstructing it in year three across multiple entities from bank statements is exactly the work a state unclaimed property audit will make you do. See Handle escheatment.Credit balances in an acquisition
Acquisition is how dental groups grow, and credit balances are a standard diligence item on both sides of every deal. When buying: obtain an aged seller credit-balance report that separates patient and payer credits. Unresolved amounts may create refund, unclaimed-property, and government-program repayment obligations. The purchase agreement should identify who will resolve pre-closing credits, maintain records, communicate with patients and payers, and fund repayments or recoupments. Consider whether an escrow or holdback is appropriate with deal counsel. See Acquire a dental practice. Selling, eventually: every dental support organization (DSO) founder is building toward someone else’s diligence. A clean weekly-reviewed credit balance history is cheap now and persuasive later; three years of ignored credits is a price reduction. After closing: track pre-closing and post-closing credits separately according to the purchase agreement. Preserve the source records and responsibility for each balance.Multi-entity considerations
Each PC has its own credit balances, its own refund obligations, and its own escheatment reporting to its own state.- The credit balance report runs per entity
- Refunds are drawn on that PC’s account
- Escheatment reporting follows the owner’s last known address rules, per state
- The 60-day clock runs per entity per identified overpayment
Verify it worked
- Credit balance report run weekly, per entity
- Every credit triaged by source before action
- Nothing unresolved over 30 days
- Payer overpayments routed to the 60-day process
- Overpayment demands verified before refunding
- Patient credits never applied forward without consent
- Open chargebacks cross-checked before refunding
- Uncashed-check ledger current
- Escheatment pipeline defined per state
Common failure modes
Sources
- 42 U.S.C. § 1320a-7k(d), enacted by ACA § 6402(a). Identification standard revised by CMS-4205-F, published December 9, 2024, effective January 1, 2025. See Morgan Lewis, Tick-Tock: CMS Overpayment Refund Final Rule; Foley & Lardner, CMS Issues Final Regulations Implementing Changes to 60-day Refund Rule.