Credit balances are something all practices have to deal with. There are several reasons why you want to know how to do it the right way. One reason is simple: you want to stay on the good side of the law. Over the last 25 years, I have had encounters with dental practices that had large credit balances on file. Several of these practices did one of two things: ignored the credit balance or refused to give the patient the monies due to them. Both are illegal. I also consulted with an office a few years ago where the doctor refused to give the patient his money back. The patient sued the doctor. It turned into a class action lawsuit, and that practice is no longer in operation. When there is a true credit balance and outstanding treatment on a patient’s account, encourage the patient to come back in and finish the treatment. If the patient is not returning to finish the treatment, refund the money. Unclaimed property or money goes to the state of the patient’s last known address, and if you do not have a last known address, it belongs to the state where the dental practice is located. You can look up your state statute of limitations and guidelines at Dentist and office manager evaluating credit balances Another important reason why you do not want to hold on to credit balances is that it gives you false Accounts Receivable reporting. Credit balances are subtracted from patient balances, which makes your practice look like it is not owed as much money as it truly is. Yet another reason is that the longer a credit balance is on file, the harder it becomes to discern if it is a billing error, an insurance overpayment, or a true patient credit balance. In order to avoid this, create a strict rule to review and refund patient balances on a monthly basis. Using the Credit Balance Report in Dentrix will help your office stay on track of patient credit balances and keep your Accounts Receivable reading true.
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