Picture this: your office gets a letter from an insurance company. It’s not a payment. It’s a request for a refund—money they say they paid you by mistake.

It’s frustrating. It’s confusing. And it’s more common than most people think.

But don’t panic. With the right knowledge and systems in place, you can handle these refund requests professionally, legally, and with confidence.

Why Do Insurance Companies Ask for Refunds?

There are several reasons an insurance company may demand money back:

• Coordination of benefits issue: They later realize another plan should have paid first.

• Patient no longer eligible: Coverage was terminated retroactively.

• Overpayment: The insurance paid more than what was allowed or what your office charged.

• Procedure not covered: They change their mind about whether the procedure was necessary or eligible.

• Clerical error: The payer simply made a mistake.

No matter the reason, your job is to slow down, verify everything, and follow a consistent process before issuing any refunds.

Step-by-Step Guide to Handling Insurance Refund Requests

1. Don’t Automatically Pay It Back

The biggest mistake is assuming the insurance company is right. They're not the final authority—you are allowed (and expected) to review the claim first.

Start by pulling:

• The original claim

• The explanation of benefits (EOB)

• The patient's ledger

• Any supporting documentation (chart notes, narratives, X-rays)

2. Verify the Reason for the Request

Read the refund request letter carefully. Why are they asking for the money back? Look for:

• Dates of service

• Amount in question

• Claimed error or overpayment

If it’s unclear, call the insurance company and get specific details. Always document who you spoke with, the date, and the call reference number.

3. Cross-Check the Math

Double-check that the insurance actually overpaid. Sometimes the refund amount is wrong, or the math doesn’t add up after considering adjustments or patient payments.

Also check whether the patient has already been refunded—or if they still owe part of that payment. Refunds can create a chain reaction in the ledger, so be careful.

4. Communicate with the Patient (If Needed)

If the patient is affected—maybe their eligibility changed or they owe a balance now—communicate early and clearly.

“We received a notice from your insurance that they overpaid your claim due to [reason]. We’re working to verify this, but we may need to adjust your account. We’ll keep you informed.”

Being proactive prevents surprises and builds trust.

5. Respond in Writing

If you determine that the refund request is valid, send the payment with a written letter that includes:

• Patient name

• Date(s) of service

• Claim number

• Explanation for the refund

• Your contact information

Keep a copy of the letter and proof of payment for your records.

If you believe the request is invalid, you can dispute it in writing. Provide supporting documentation and explain why you’re not issuing a refund. In most cases, this opens a formal appeal process.

6. Don’t Let It Linger

Refund requests should be handled promptly—usually within 30–45 days. Waiting too long can lead to collections, fee reductions on future claims, or even audits.

7. Log Every Refund

Create a refund log that includes:

• Date of request

• Insurance company

• Patient name

• Reason for refund

• Amount

• Status (pending, paid, disputed)

• Date resolved

This helps your office stay organized, especially when multiple refund requests come in.

8. Update Your Office Processes

Use every refund request as a chance to improve your systems:

• Was eligibility verified thoroughly?

• Was the claim accurate?

• Could coordination of benefits have been caught earlier?

• Was the correct fee charged?

Small process improvements now can save you thousands later.

Final Tip: You’re Not Powerless

Insurance companies may seem like they have the upper hand, but your office has rights, too. You’re entitled to verify, dispute, and protect your revenue.

A refund request isn’t a punishment—it’s a prompt to double-check the story. With a calm, step-by-step approach, you can manage these situations like a pro.

Would you like a downloadable template for refund response letters or a checklist your front office can use when refund requests come in?

Benjamin Tuinei

Founder - Veritas Dental Resources, LLC
Phone: 888-808-4513

Services:
PPO Fee Negotiators | PPO Fee Negotiating | Insurance Fee Negotiating
Insurance Credentialing | Insurance Verifications

Websites:
www.VeritasDentalResources.com | www.VerusDental.com