Unclaimed Property Laws and Your Healthcare Practice

Some states are cracking down on unclaimed property violations, and healthcare providers have been subject to enforcement. Learn tips for staying compliant with the laws in your jurisdiction.

Unclaimed property laws are usually not a focus of healthcare practices. In fact, you may be entirely unfamiliar with this concept. However, despite not being a “hot topic” in healthcare regulation, you should be aware of the unclaimed property requirements in your state and the role of your fraud, waste, and abuse policy.

What Is Unclaimed Property?

Unclaimed property is a financial asset left inactive by its owner for a period of time. What counts as “property” under the law varies by state. Common types of unclaimed property include overpayment balances, bank account contents, stocks, bonds, payroll checks, and certificates of deposit. 

The law often requires the state to hold the abandoned or unclaimed property until the rightful owner reclaims it. Thus, businesses need to keep track of any unclaimed property in their possession. Typically, a business needs to make annual reports and deliver unclaimed property to state authorities if there has been no activity on an account or contact with the owner for a certain length of time. The timeframes vary by state but are usually around 3 to 10 years. Businesses subject to unclaimed property laws must attempt to contact the property owner’s last known address and inform the individual of the business’s responsibility to transfer the property to the state for safekeeping. 

Once the property is under the state’s control, people can recover their property from the state. For instance, in California, a person must file a claim with the State Controller’s Office and prove their identity to retrieve their property. 

How Could Unclaimed Property Affect Healthcare Practices? 

Unclaimed property laws can affect healthcare practices of all sizes. For example, practices might fail to meet state requirements for patient overpayments. Therefore, without adequate procedures for tracking overpayments, notifying patients, and turning unclaimed property over to the state, healthcare practices could violate unclaimed property laws. They may also violate state and federal false claims laws. 

Some states are cracking down on unclaimed property violations, and healthcare providers have been subject to enforcement. For example, California’s Attorney General recently filed a complaint against U.S. HealthWorks Inc., a chain of occupational and urgent care clinics. This complaint alleges that the company knowingly kept millions in overpaid patient balances, unclaimed refund checks, and other unclaimed property. Thus, the company’s actions could violate California’s unclaimed property statute and the California False Claims Act.

Tips for Compliance.

To stay compliant, you’ll need organization and forethought. Below we provide tips for meeting the unclaimed property requirements in your state. 

• Confirm that your fraud, waste, and abuse policy addresses the handling of refunds and overpayments in accordance with your state laws.
• Provide False Claims Act training and Unclaimed Property law training for staff members.
• Inform patients of your refund and unclaimed property policies and procedures.
• Emphasize the importance of maintaining up-to-date addresses for all patients. If needed, create a mechanism for routinely verifying all addresses on record.
• Maintain and prioritize detailed bookkeeping. 
• Create an overpayment log that includes relevant dates to ensure compliance with state laws. 
• Review the contracts with your health plans to understand the coverage requirements and controlling provisions.

Get Legal Support. 

Healthcare professionals enter their fields to help patients live healthier and happier lives. As a result, practitioners usually don’t want to spend their free time learning about and accounting for the regulatory state. Still, we urge you to take the necessary steps to protect your business from state scrutiny.

Perhaps you are unsure whether your fraud, waste, and abuse policies account for overpayments. Or maybe you’re just starting and have yet to implement policies at your practice. An experienced healthcare lawyer can help tailor policies to your practice’s needs. If you operate in any of the states where we have licensed attorneys, schedule a complimentary consultation to see how we can support you.

This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.