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Time to identify and return patient credit balances
e-Reports, Aug. 22, 2011
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Were you among the practices scrambling at the end of 2010 to identify unclaimed property and report it under protection of the amnesty program? While that one-time amnesty program is gone, the annual requirement to identify and report unclaimed property remains. And the time to act is now.

Overview of the law
Under Indiana’s Unclaimed Property Act, virtually all businesses, including physician practices, are required to report and remit any “abandoned” unclaimed property on the books to the Office of the Indiana Attorney General (OIAG) whenever the property cannot be returned to its rightful owner.

ISMA General Counsel Julie Reed noted, “This law is not new, but compliance has historically been minimal. Last year, the state identified this as a priority program and businesses should take it seriously.”

Unclaimed property is deemed abandoned when:

  1. The property as been inactive for a designated period of time (wages/paychecks - 1 year; credit balances for individuals not currently patients – 3 years); and
  2. Your attempt to contact and return the property (money) to its owner through the due diligence process has been unsuccessful. This year’s deadline for your 2011 report and remittance is Nov. 1; but due diligence should occur between July 1 and Sept. 1.

The due diligence process
To comply with due diligence obligations, you must:

  1. Audit your records annually to identify any unclaimed property
  2. Identify owners of the property
  3. By Sept. 1, send a letter via first-class mail to the owners of property worth $50 or more, alerting them about their unclaimed property.
  4. Return monies to the rightful owners when possible.
  5. For monies that cannot be returned to their rightful owners, report and submit to the state by Nov. 1, once aging requirements are met.

To avoid penalties and interest, all abandoned monies – regardless of amount – must be reported to the state by Nov. 1. Patient credit balances are not abandoned if they belong to current patients.

For more information, visit the Indianaunclaimed website or contact the OIAG’s office at (317) 232-6348 or (800) 447-5598 for a free consultation.

Copyright: Information written and displayed on www.ismanet.org is the property of ISMA and may not be reproduced without expressed written permission of the Indiana State Medical Association.

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