what is offset, refund, adjustment and payment reference number

Posting Reference Number:

This is the number which is given by the operator to the claims posted in order to keep track of the payment posted details. This is generally given in a specified format as per the client requirement.

For Example:-

01.3651.123103 here the 01 refers to the serial number, 3651 refers to the batch number and 123103 refer to the date and the year on which the file was received by us.

• Offset:

This is a kind of an adjustment which is made by the insurance when excess payments and wrong payments are made. If insurance pays to a claim more than the specified amount or pays incorrectly it asks for a refund or adjusts / offsets the payment against the payment of another claim. This is called as Offset.

For example:-

Let the total billed amount of two claims is $100.00 each and the specified payment for this is $80.00. The insurance pays $90.00 for the first claim. Here $10.00 is paid in excess. Now while making payment for the second claim the insurance pays $70.00 and sets $10.00 as offset. Now the insurance payment becomes normal as the excess payment had been adjusted off.

 Offset - Overpayments may be recouped by “offset”. Medicare reduces future checks issued to a provider until the amount of overpayment is refunded. When Medicare identifies an overpayment, the offset process is initiated. Providers are sent a letter specifying information regarding the overpayment and are given 30 days to refund the overpaid amount. Overpayment notices contain an accounts receivable number (AR#) which identifies the transaction.

If the refund is not received from the provider within 30 days, a second notice is sent out for overpayments over $50.00, indicating that the overpayment is still outstanding and interest is now accruing. If the overpaid amount is not received upon 40 days of the initial notification,

NHIC will proceed with ‘offsetting’ money from payments to the provider until the overpaid amount is recovered. Interest on the total overpaid amount begins to accrue after the 29th day from the initial notice. Providers may avoid paying interest when choosing the offset method by initially requesting an “immediate offset”. When an immediate offset is requested, a notice is sent with the specific information regarding the offset, but the 40-day period is waived and offset is initiated immediately.Definition of a Medicare Overpayment

• Refund:

This is the process of returning back the excess money paid by the insurance / patient on request. If payment is received in excess than the specified amount, insurance / patient request for a refund. The process of Refund is usually done as per the client specifications.

For example:-

Let the total billed amount of a claim be $100.00 and the specified payment for this is $80.00. The insurance pays $90.00 for the claim. Here $10.00 is paid in excess. Now the insurance requests for a refund of $10.00 which will be done as per the client specifications.

• Adjustment:

An adjustment is an amount which had been adjusted for some reason and may be recoverable. It can be an additional payment or correction of records on a previously processed claim. Adjustments are done based on the client instructions. One specific type of adjustment is the write-off.

For Example:-

Let the billed amount of a claim be $100.00 and the paid amount is given as $70 and $ 30 is given as participating providers adjustment. So this $ 30 has to be adjusted.
Write-Off:- It is an amount which cannot be recovered at all. This write-off is usually done when the insurance payments are made. It is the balance of what the insurance have allowed on a particular charge i.e. Total Billed amount – Allowed amount. The main difference between an adjustment and write-off is that Adjustment may be recovered whereas write-off cannot be recovered at all.

For Example:-

If the billed amount is $100.00 and the insurance allowed amount is $80.00. The payment amount is $80.00 then the remaining $20.00 is the write-off amount.


BCBSKS must request refunds from providers within 15 months from the date of adjudication. Failure to do so will result in the provider being held harmless. Refund requests for fraudulent claim payments and duplicate claim payments, including other party liability claims, are not subject to the 15-month limitation. Providers shall promptly notify BCBSKS upon becoming aware of an overpayment to initiate the refund process.


BCBSKS will, through auto deduction processes, exercise the right of offset for claims previously paid. This right includes offset against any subsequent claim(s) submitted by the provider, including those involving other members. To accomplish this, BCBSKS will supply providers detailed individual claims information on the remittance advice so amounts can be reconciled efficiently.


Timely and accurate payroll processing

Overpayments are usually created by late processing of amendments or incorrect transactions on eduPay. The common types of amendments/transactions that cause overpayments are:

• Worker’s Compensation leave entry

• Late processing of employment terminations

• Late processing, incorrect or duplicated allowances

• Late processing of time fraction changes

• Incorrect salary levels/classifications

All payroll transactions should be undertaken, wherever possible, prior to the day of Pay Finalisation to allow sufficient time to check the results of these transactions.


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