A chargeback is a request from an insurance company to reclaim a payment it previously issued, usually because the insurer later determines that the original payment was made in error. This can occur for several reasons, such as policy cancellations, patient ineligibility on the date of service, overpayments, billing or coding mistakes, or situations where the payment was applied to the wrong patient or encounter.
When an insurer issues a chargeback, it will specify the patient and date of service to which the reclaimed funds must now be allocated, and in some cases may even request that the amount be reassigned to a different patient’s account. Chargebacks typically arise after an internal audit or review reveals a discrepancy that requires the payment to be corrected or reapplied.
Post additional payments on reprocessed insurance claims
If an insurance claim with an existing payment is reprocessed and an additional payment is issued, there are a couple of options for posting it.
Option 1
Start by navigating to the Patient Dashboard, then click on the appropriate Encounter Number.
Scroll down to the Payment Details section and click the chevron to expand the details. Then, click the reverse button to reverse this individual payment. This action will not impact any other payment linked to the same check.
Type CONFIRM and click Continue.
After reversing the payment, navigate to the Insurance Payment tab and click New Payment to create a replacement payment. Be sure to link the relevant patient(s) and select the correct date of service. First, search for the patient using either their Last Name, First Name, Account/MRN Number, Chart Number, or Claim Number. This will automatically link the patient.
Then, in the Encounters section, click the link icon next to the corresponding date of service, located under either the Unlinked or Unlinked & Settled tabs. Once the new payment is created, the full charge amount will be displayed as the balance, allowing you to accurately apply the payment to the encounter.
Post the new payment using the most recent paid and allowed amounts. The system will automatically calculate and populate the disallowed amount (CO-45), reflecting any portion of the allowed amount that was not paid. For instance, if the allowed amount is $50 and the insurance payment is $50, the system will automatically record $50 as the disallowed amount (CO-45).
Option 2
You can also manually post an insurance chargeback when the payer reclaims funds from one line and applies them to another line item under the same date of service.
For instance, if $50 was initially applied to Procedure 99411 but should have gone to Procedure 99218, you can manually reassign the payment using a chargeback.
Start by navigating to the Insurance Payment tab and clicking New Payment to post a chargeback. Make sure the correct patient and encounter date of service are linked. To link the patient, enter their Last Name, First Name, Account/MRN Number, Chart Number, or Claim Number. Then, in the Encounters section, click the link icon next to the corresponding date of service, located under either the Unlinked or Unlinked & Settled tabs.
Ensure the correct payer is selected from the Payer dropdown menu.
From the Payment Code Type dropdown menu, select Insurance charge back for the line item from which the funds are being reclaimed. This indicates that the payment is being reversed from one line and will be reapplied elsewhere as directed by the insurer.
Enter the amount being reclaimed in the Payment column. This will display as a negative amount and create a balance on the line item. Next, decide how to handle the balance: bill the patient, select Accept & Rework Denial, or choose Rework Denial to mark it as a denial and either rebill the payer or write off the balance in the Write-Off column.
Next, enter the payment details for the correct line item. If the initial payment included a disallowed amount that has been adjusted, enter that amount as a negative value in the Disallowed field and record the corrected payment in the Payment field. This ensures the system accurately reflects the adjustment and updates the line item balance correctly.
Assign the chargeback payment amount to another patient
To begin, navigate to the Insurance Payment tab and click New Payment to post a chargeback. Make sure the correct patient and encounter date of service are linked.
To link the patient, enter their Last Name, First Name, Account/MRN Number, Chart Number, or Claim Number. Then, in the Encounters section, click the link icon next to the encounter date of service associated with the chargeback, located under either the Unlinked or Unlinked & Settled tabs.
Ensure the correct payer is selected from the Payer dropdown menu.
From the Payment Code Type dropdown menu, select Insurance charge back for the line item from which the funds are being reclaimed. This indicates that the payment is being reversed from one line and will be reapplied elsewhere as directed by the insurer.
Enter the amount being reclaimed in the Payment column. This will display as a negative amount and create a balance on the line item. If the initial payment included a disallowed amount that has been adjusted, enter that amount as a negative value in the Disallowed field. This ensures the system accurately reflects the adjustment and updates the line item balance correctly.
To link additional patient(s) for applying the funds, search for the patient using their Last Name, First Name, Account/MRN Number, Chart Number, or Claim Number, then click Search. In the Encounters section, click the link icon next to the encounter date of service associated with the chargeback, found under either the Unlinked or Unlinked & Settled tabs.
Ensure the correct payer is selected from the Payer dropdown menu.
Select Insurance Payment from the Payment Type dropdown menu. This ensures the system classifies the transaction correctly and applies it under the appropriate insurance payment category.
Enter the insurance chargeback payment details for the line item, including the Allowed Amount. Once the allowed amount is entered, the Disallowed Amount will automatically populate. Add any Coinsurance, Copay, Deductible, or other Patient Responsibility amounts in their respective fields, then enter the payment amount in the Payment Amount field for that line item. If any adjustments are required, enter the amount in the Adj field and select the appropriate adjustment code from the Adj Code dropdown menu.
The chargeback amount will appear at the top of the screen as the Charge Back Balance, indicating how much needs to be reapplied. Both Payment Applied and Payment Unapplied will show a zero balance, since the funds are being fully reversed and are now ready to be reassigned to the correct line item or patient.
Click Save and Post to finalize and post the chargeback, which updates the encounter and applies the chargeback details immediately. If you’re not ready to post it, click Save instead. This option stores the chargeback information so you can review or complete it later without having to reenter any details.