Must refund demands from dental plans always be paid ?

There is an assumption in state law (Health and Safety Code Section 1371.1; Insurance Code Section 10123.145) that when a health care provider has been overpaid for a service or procedure that the provider is obligated to refund that overpayment to the insurance company or health plan. Many overpayments are simple mistakes and are obvious to the practice, for example a $100 claimed charge is paid at $1,000 or a misplaced decimal point can result in an obvious overpayment and this overage should be returned to the payer. Many overpayments result when the dental plan discovers after payment has been made on a claim that the patient fell out of coverage eligibility just prior to the date of service and the plan was not made aware of this termination of coverage by the subscribing group until after the claim was paid. These situations result in refund demands made by a plan upon a dental practice and the refund should be paid.

Any refund demand could be challenged, but the only basis upon which to appeal a refund demand is when the payment was made in error. When the error was the sole responsibility or fault of the dental plan and the payment meets certain criteria: