Credit Balances
Oct 5, 2022

Credit Balance Recovery vs Resolution

Credit balance "recovery" and "resolution" are often used interchangeably, but there are key differences to keep in mind.

Credit Balance Recovery vs Resolution

What is Credit Balance Recovery?

Credit balance recovery has been the standard approach to handling credit balances in healthcare for decades. This strategy generally consists of an outside vendor who is contracted with insurance payers to recover overpayments on their behalf. This vendor then goes to healthcare providers affiliated with their payer partners and attempts to identify and refund overpayments, in exchange for a contingency fee.

Because credit balance recovery vendors often do not charge providers directly, this may seem like a good solution, but there are some clear disadvantages to handling credits this way. Namely, the recovery vendor’s sole objective is to recoup as much as possible from the provider. This creates two incentives that work against providers.

First, it opens the door to inappropriate refunds; wherein the vendor does not do the proper due diligence on each account and by default chooses to process a refund or submit a retraction, costing providers resources and revenue.

Secondly, recovery vendors must always maximize their contingency fee. Therefore, identifying the root causes of credits and preventing them works against this type of vendor, leading to growing credit balance backlogs and growing profits for recovery vendors.

We estimate that over $500M is inappropriately refunded to payers by recovery vendors each year

What is Credit Balance Resolution?

Credit balance resolution, on the other hand, is a strategy built around the provider and their objectives. A credit balance resolution vendor takes a holistic approach and does NOT receive a contingency from payers.

Instead of cherry-picking accounts, they work to resolve all credits. And instead of profiting off inefficiencies in the revenue cycle, these vendors seek to eliminate the drivers of credits by identifying root causes and implementing corrective actions. In other words, credit balance resolution vendors and healthcare providers’ incentives are aligned.

By eliminating credits at their source, providers reduce waste and improve their revenue cycle

Which is Right for Your Organization?

While both types of credit balance vendor can assist you, only one brings the expertise and incentive to completely resolve your credit balance problem; and that is a Credit Balance Resolution Vendor like Crossroads Health.

Sadly, the market is flooded with credit balance recovery vendors. In fact, Crossroads Health is one of the only companies proving credit balance resolution services exclusively on behalf of providers. Meaning, Crossroads Health NEVER receives compensation form payers for recovering overpayments, instead, we work for providers to clear existing credits and prevent them by eliminating their root causes.

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Carolyn Morales
Carolyn Morales
Director of Operations
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