When SHOULDN’T You Cash An Insurance Check?
by Barbara Griswold, LMFT (July 5, 2019)
A: You might be surprised how often insurance plans cut the check to the wrong party. The problem is, there isn’t an easy or clear solution. Clients may ask you to sign the check over to them, or to cash the check and refund their money.
However, it is risky to cash any checks from the insurance plan and then credit the client (or sign the check over to them). The insurance company could become aware of their error and, at a later date, ask for repayment. At that point, it isn’t easy to prove the actions you took with the check. Worse yet, the insurance plan may not care — they may only be interested in getting their money back, and may hound you for repayment. By this time, the client may have left therapy, or be unresponsive. I know of one instance where the client was reimbursed by the therapist and later got a check from the insurance plan. Despite this double payment, the client was uncooperative in helping the therapist to fight the overpayment request.
In the past when I’ve received these checks, I’ve deposited them and squared things with the client. However, after providing consultations to therapists nationwide over the years, I’ve now heard enough horror stories about this situation that I changed my policies.
OK, then, so what SHOULD you do with the check you’ve received? Don’t just return it to the plan with a note attached. It may not get to the proper department there and you might not be credited. Since each plan has different policies, it is best to contact the plan directly. They often need to issue a written overpayment request where you would either be asked to return the check or to write a check to them for the money you were paid. Or they may put a “stop-payment” on the check, and/or tell you to destroy it.
Remember to keep strict copies of all correspondence regarding the check, and records of when you called the plan, what phone number you called, who you talked to in what department, what you were told, and ALWAYS, ALWAYS, ALWAYS get call confirmation numbers. Then document all actions taken.
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