Last week one of my clients in the southeastern United States got a series of letters from a collection agency following up on a situation that occurred nearly two years ago. Around that time, a company contracted with a state Medicaid agency audited this group and denied some claims because they weren’t signed and others because the professional’s title didn’t appear in the note.
The client engaged me to write a letter to the auditing company. In that letter, I explained that the assertion that a claim should be denied if the chart was unsigned or if the author’s credentials were not included in the note was not based on anything in law.
We never received a reply. Now, nearly two years later, a collection agency wrote a terse letter demanding that my client pay.
The letter was very poorly written. The subject line was incomprehensible because some words were replaced with nonsense ASCII- like characters. The client called me, quite concerned, because of the threatening tone of the letter. As a result, they were prepared to surrender and submit the requested payment.
This really bothered me. The original audit findings were baseless. The claims in this case were handwritten by the same physician, yet the auditor claimed it couldn’t tell who had provided the service. That’s just silly.
The client called me because they were worried paying would be an admission of wrongdoing. I told them that it would be possible to craft a letter in such a fashion that the refund would not constitute such an admission.
However, I didn’t think that was the ideal response.
When someone shakes you down, you need to stand up to them. In this case, that proved remarkably easy. I called the collection agency and told them the story. They indicated that if we had any objection to the debt, they would record the information and notify the state agency and put the collection on hold.
A five-minute phone call solved the problem. There is an important lesson here. Do not be afraid to push back. That principle applies whether someone is attempting to recover an overpayment from you or whether you are considering a refund. Challenge conventional wisdom.
In woodworking, there is a saying: “measure twice, cut once.” We need a similar expression for overpayments and refunds. Perhaps it would be “analyze twice, refund once.” Once you’ve chosen to concede in an overpayment case or voluntarily refund money, it’s very difficult to un-ring the bell. It isn’t impossible; I’ve recovered money clients voluntarily refunded, but it requires considerable effort.
In the last few weeks I’ve talked with several clients who unnecessarily refunded money or surrendered in an overpayment case. Having heard their frustration as they realized they acted rashly, I want to end this article with a plea. Before you cut a check that’s more than a few thousand dollars, please, please, please call creative legal counsel and confirm that you don’t have an easy basis for making a challenge.
A five or 10-minute phone call should cost no more than $100 and can save thousands or even millions of dollars.
Analyze twice: once alone, once with creative counsel. It may allow you to keep your hard-earned money.
Hospitals are about to hit a perfect storm of two powerful climate conditions set both hit in 2026; the One Big Beautiful Bill Act (OBBBA)
As many of you already know, the One Big Beautiful Bill (OBBBA) will add new restrictions that may decrease the volume of Medicaid patients. My
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