Payment application and recording

USA Discussion in 'Businesses / Corporations' started by Andyy, May 8, 2018.

  1. Andyy

    Andyy

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    Is it ok to post payments that did not occur? Or more specifically, apply overpayment credits on one account to another unrelated AR account? Is there a a formal regulation that addresses this?

    For example, payer 1 has an overpayment of $1000, without documentation is it ok to post a takeback on payer 1 and post a $1000 payment to another payer 2. Without a paper trail.

    Thank you for your input
     
    Last edited: May 8, 2018
    Andyy, May 8, 2018
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  2. Andyy

    kirby VIP Member

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    To the first and second questions: NO!
    First off, yes there is a regulation that addresses this. Look up the law on "illegal conversion of property."
    Second this is a misstatement of the accounting books.
    Beyond that, Once payer 1 figures out they overpaid you and asks for a refund after you applied it to payer 2, what are you going to do?
     
    kirby, May 18, 2018
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  3. Andyy

    Andyy

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    Thank you Kirby, I appreciate your response and input..
    It's in healthcare industry, and credits were being moved from HMO payer (let's say BCBS) to Medicare unpaid (denied) claims. I guess with expectation that BCBS won't retract overpayments, or maybe charges under BCBS were underbooked resulting in credit balances on patient accounts. So instead of writing off unpaid Medicare charges, payments were applied through cash transactions that never occurred..

    I'm pretty sure that's against insurance rules too, but I wanted to know if it was illegal under GAAP..
     
    Andyy, Sep 25, 2018
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  4. Andyy

    kirby VIP Member

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    Misstating accounting records and consequently sending false reports to Medicare - wow - someone in management is on their knees begging for a kick in the teeth... don't do this
     
    kirby, Sep 26, 2018
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