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Your Obligation with Patient Refunds

Do you have a regular and thorough process being performed in your practice to issue frequent patient refunds?  Specifically, refunds related to patient overpayments?  This administrative function should be a part of your monthly office routine and you should have a process in place for it.

Having a clean accounts receivable report allows the practice to more accurately manage cash flow and have a true picture of accounts receivable.  When refunds and patient credits accumulate in the accounts receivable, these negative numbers offset true patient receivables.  As a result, an accounts receivable balance may seem lower than it actually is if it’s being offset by a large portion of patient credits that should be refunded.

Issuing patient refunds regularly is also a patient courtesy that is not unnoticed.  Patients appreciate you returning their money to them — and the sooner you can refund it, the better.  Having long periods of time or delays in issuing refunds may reflect a disorganized office that isn’t in control and on top of their finances.  Obviously, you want to build trust and rapport with patients and avoid any negative interpretations of your dental practice.

Refunds that are not returned or situations where the owner cannot be located are not your property.  These are considered unclaimed funds and belong to your state.  These should be reported and remitted to your state.  Dental offices should file a report with their state (an unclaimed property report) to reflect the unclaimed property.  In some states, unclaimed property can be audited and heavily scrutinized.  In addition, fines and penalties can apply.

Issuing patient refunds keeps your accounts receivable clean and in check, it’s a patient courtesy, and if not performed, it can create other more unwelcome issues.  If you need assistance identifying a process or talking through one, please let us know!

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