Writing Off Patient Balances After Insurance Submission: When It Becomes Insurance Fraud
- Ashley Boaz
- 4 days ago
- 3 min read
Updated: 2 days ago
In today’s fast-paced dental and healthcare environments, practices are constantly balancing patient satisfaction with operational efficiency. One area that often causes confusion—and legal risk—is the routine writing off of patient balances after insurance has already been billed and paid. While it may feel like good customer service, this practice can cross into insurance fraud if handled incorrectly.
Understanding where goodwill ends and fraud begins is essential for protecting your practice, your license, and your reputation.
What Does “Writing Off a Balance” Really Mean?
A write-off occurs when a practice voluntarily forgives all or part of a patient’s financial responsibility—such as deductibles, copays, or coinsurance—after insurance has processed a claim.
Common reasons practices give include:
Avoiding uncomfortable financial conversations
Appeasing unhappy patients
Compensating for internal errors
Speeding up account closures
However, intent matters less than outcome when insurers evaluate compliance.
Why Writing Off Patient Balances Can Be Considered Fraud
When you submit a claim to an insurance carrier, you are certifying that:
Your usual and customary fee is accurate
You intend to collect the patient’s portion
The reported charges reflect the true cost of services
If you routinely waive patient balances after insurance payment, it may be interpreted as:
Misrepresenting your actual fees
Providing undisclosed discounts
Inducing patients with “free” services
Overbilling the insurance carrier
From the insurer’s perspective, if the patient never pays their portion, the true fee was lower than what was reported—which can trigger allegations of fraudulent billing.
The Red Flag Insurers Look For
Insurance companies actively monitor patterns such as:
High write-off percentages
Zero patient balances on most accounts
“Courtesy” adjustments without documentation
Waived copays or deductibles across the board
These patterns suggest the practice never intended to collect the patient portion, which violates most provider contracts.
Improper write-offs can lead to serious repercussions, including:
Insurance audits
Recoupment of paid claims
Termination of provider contracts
Civil penalties and fines
Accusations of insurance fraud
Damage to professional licensure
Even well-intentioned practices can find themselves exposed if systems and policies are not clearly defined.
When Write-Offs Are Appropriate
Not all write-offs are illegal. The key is timing, transparency, and documentation.
Acceptable situations may include:
Financial hardship programs established before treatment
Prompt-pay or membership discounts applied prior to claim submission
Courtesy adjustments for internal errors (clearly documented)
Contractual write-offs required by insurance agreements
The difference is that these adjustments are disclosed, consistent, and compliant—not retroactive forgiveness after insurance has paid.
Best Practices to Stay Compliant
To protect your practice:
Collect patient portions consistently
Have written financial policies signed by patients
Apply discounts before claims are submitted, not after
Document all adjustments thoroughly
Train your team on insurance compliance and language
Avoid “courtesy” write-offs as a routine solution
Consistency is your strongest defense in the event of an audit.
Patient Satisfaction Without Risk
Good customer service does not require compliance violations. Clear communication, upfront financial discussions, and structured discount programs allow you to care for patients without putting your practice at risk.
The Bottom Line
Writing off patient balances after insurance submission isn’t just a financial decision—it’s a compliance decision. When done improperly, it can expose your practice to accusations of insurance fraud, even if the intent was to help the patient.
The safest path forward is proactive policy design, team training, and ethical financial systems that protect both your patients and your practice.
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