Dr. DentistName
Address
City, State Zip
Phone number

Insurance Company
Insurance company address

RE: PatientName; PatientID; Claim number

To Whom It May Concern:

We are in receipt of a refund request in the amount of $XXX for patient XXXXX..

We have reviewed this account thoroughly, and according to our records, the claim has been paid and the account is closed. You will be pleased to know we find no balance due from your company, nor do we find any payment that you are entitled to recoup. We have applied all appropriate contractual adjustments, if they apply, and the patient has been billed for their responsibility, if any.

According to federal law, as a third party creditor, we cannot be held liable for mistakes on the insurer’s part. We obtained the patient insurance information at the time of service and there was every indication we were entitled to 3rd party payment from your company, based on the patient’s representation.

If you are claiming an overpayment, we received your payment and your Explanation(s) of Benefits dated XXXX ( copies enclosed) in good faith. Based on your payment and Explanation of Benefits, we did not bill the patient for the portion covered by the insurance. We have provided services in good faith, and the funds received have been exhausted.

There are several court decisions that bear on this situation. In 1992, the California Court of Appeals held that, if a provider bills in good faith, and the insurance company accidentally pays too much based on the insurance company’s own calculation, the company cannot collect a refund from the provider, so long as there was no misrepresentation or fraud on the provider’s part in billing (City of Hope Medical Center v. Superior Court of Los Angeles County (1992) 8 Cal.App.4th 633). The discharge for value rule, or the innocent-third-party-creditor rule, has also been applied in an analogous situation. Numerous courts have held that an insurer is not entitled to recover payments erroneously made to an insured’s health care provider.  See also:

• National Benefit Administrators, Inc. v. Mississippi Methodist Hospital & Rehabilitation Ctr., Inc., 748 F. Supp. 459, 464-65 (S.D. Miss. 1990).
• Time Ins. Co. v. Fulton-DeKalb Hosp. Auth., 438 S.E.2d 149, 152 (Ga. Ct. App. 1993); St. Mary’s Med. Ctr., Inc. v. United Farm Bureau Family Life Ins. Co., 624 N.E.2d 939 (Ind. Ct. App. 1993); Lincoln Nat. Life Ins. Co. v. Brown Schs., Inc., 757 S.W.2d 411 (Tex. Ct. App. 1988).

Similarly, your company, as the insurer, made a payment to discharge a debt owed by the patient, and we are not required to refund the payment based on your calculations and which we received in good faith.

We feel that we have been properly reimbursed for services rendered and no refund will be issued. If, in the future, you elect to deduct the so-called overpayment from benefits payable on behalf of other beneficiaries of yours to whom we provide services, we will see that our legal counsel insures that our rights, and the rights of those beneficiaries as supported by the law, are preserved. Please do not hesitate to call me if you have any questions or need additional information. You can contact me at XXXXX.

Sincerely,

BillingAdminName
Patient Billing Administrator