Insurance Overpayment FAQ

What is an insurance overpayment?

Insurance carriers occasionally pay more than you expect on a patient’s claim. This may happen when a fee schedule is outdated or when there is improper coordination of benefits between the primary and secondary insurances. The office can collect up to the billed amount before applying any write-off. If an insurance carrier pays more than the billed amount, the extra money should be recorded in the Ledger as an overpayment.

Some common situations where you will see an overpayment include:

The primary insurance carrier overpays. Sometimes this occurs when the carrier has already paid the billed amount and then they unexpectedly make an additional payment.
The secondary insurance carrier overpays. If the secondary carrier thinks they are the primary carrier, this can lead them to overpay on a claim. The combined payments from the primary and secondary insurance cannot exceed the billed amount.
A procedure or product is posted with a $0 charge, and the insurance carrier unexpectedly pays.

How do insurance carriers handle overpayments?

Each insurance carrier has their own process for handling overpayments. When you receive an overpayment, you must contact the carrier to find out what they would like you to do.

Some common ways that insurance carriers handle overpayments are:

Request that the overpayment be sent back to the insurance carrier (The carrier may recover by automatic deduction if the overpayment is not promptly sent back.)
Apply the overpayment amount to another covered patient’s claim
Deduct the overpayment from future benefits until the full amount is recovered

How do I manage adjustment types in Dentrix Ascend?

It is important to make sure your adjustment types are set up correctly. Some adjustments should impact collections and some should impact production. For more information about using adjustments in Dentrix Ascend, read Common Adjustments & How to Use Each One.

How do I post an overpayment?

Watch this video: Insurance Overpayments Workflow or read the section below.

Sometimes when you enter an insurance payment, you’ll notice that the insurance paid more than expected. In Dentrix Ascend, this is known as an overpayment. Dentrix Ascend helps you easily recognize when the insurance has paid too much. You will see the overpaid amount in the Remaining amount to be applied field in red text. When this happens, you will not be able to save the payment until you account for the overpayment.

To record an overpayment:

In the Ledger, click Payment (-).

Enter the insurance payment.
Select the claim.
Fill out the adjustments box:
- For Insurance Adjustment, select Offsetting.
- For Adjustment Type, select Insurance Over-pmt Refund. Make sure this adjustment type impacts your collection numbers (See How do I manage adjustment types in Dentrix Ascend?)
The overpayment amount automatically generates in the Amount field of the adjustments box.
Click Save.

The overpayment adjustment is recorded in the ledger and will balance out the ledger.

What do I do when an insurance carrier tells me that they overpaid and expects me to send them a check for that overpayment?

Follow the steps outlined in How do I post an overpayment? Once the overpayment amount is posted in the Ledger, all you need to do is cut a check for the insurance carrier.

What do I do when the insurance carrier tells me to refund the overpayment to the patient?

Follow the steps outlined in How do I post an overpayment? Once the overpayment amount is posted in the Ledger, all you need to do is cut a check for the patient.

I need to post a write-off and an insurance overpayment. Ascend won’t let me do both at the same time. How do I handle this?

Note: You can only post one adjustment per payment. You must first post the write-off. Then you can post the remaining balance as an insurance overpayment.

To post a write-off:

In the Ledger, click Payment (‑).

Enter a $0 insurance payment.
Select the claim.
Check Additional payment(s) expected later from insurance.
Fill out the adjustments box:
- For Insurance Adjustment, select Write-off.
- For Adjustment Type, select Insurance Adjustment.
Enter the write-off amount in the Adjustment field.
Click Save.

To post an insurance overpayment:

Follow the steps outlined in How do I post an overpayment?

What do I do when the carrier holds back payment from one patient because they overpaid on another patient’s claim?

If the insurance carrier overpaid on a patient’s claim, they may send you a letter informing you that they are going to hold back money from a future check. It may be that the carrier ends up paying less for a different patient’s claim to make up for the overpayment. Follow the instructions below to ensure that the overpaid amount is applied to the correct patient.

To enter an overpayment:

Go to the patient that the insurance carrier overpaid on.
Open the patient’s ledger to verify whether the overpayment was accounted for. If not, then follow the steps outlined in How do I post an overpayment?
Take note of the overpayment amount. You will need to know that amount for the next step.

To transfer the overpaid amount to a different patient:

Go to the patient that the carrier wants you to apply the overpaid amount to (not the patient that the carrier overpaid on). Open that patient’s Ledger.
Post a credit adjustment that is equal to the overpaid amount. (See To post a credit adjustment)
- Note: The amount of this credit adjustment should match the amount of the overpayment adjustment that you posted on the other patient’s ledger.

How do I associate collections to a specific provider after an overpayment? (Often occurs with groups billing under Type 2 NPI)

When you are using a Type 2 NPI where the Location is your claim provider, by default the billing provider will automatically be selected as the provider on the offsetting adjustment. If you want the production to be allocated toward a specific provider’s collections, you must post two different adjustments in the Ledger to move the money to the correct provider.

Adjustment 1: Post a charge adjustment to deduct the overpaid amount from the location (billing provider).
Adjustment 2: Post a credit adjustment to add the money to the correct provider.

Note: You would only do this if the insurance told you to keep the overpayment amount.

To post a charge adjustment:

Open the Ledger of the patient for whom you received an overpayment. Click Charge (+) Adjustment.

Fill in all the required information.
- For Type, select Transfer Charge Balance. Make sure this adjustment type impacts your production numbers. (See How do I manage adjustment types in Dentrix Ascend?)
For Provider, select the provider that you want the money to be moved to.
Click Save.

Note: If you need to apply the collections to more than one provider, generate one charge adjustment (that impacts production) for each of the providers.

To post a credit adjustment:

In the same patient’s Ledger, click Credit (‑) Adjustment.

Fill in all the required information.
- For Type, select Offsetting Adjustment. Make sure this adjustment type impacts your collection numbers. (See How do I manage adjustment types in Dentrix Ascend?)
Click Save.

When you finish posting the two adjustments, your patient portion will still be $0, and your ledger will show the two adjustments you made: the Offsetting Adjustment and the Transfer Charge Balance adjustment.