Insurance company sent me huge check instead of pharmacy. Now what?

Question

I received a $20,000 check from my insurance company that was supposed to go to my specialty pharmacy. It's made out to me. Since it was obviously a mistake, I called the pharmacy, and they said to sign it over to them and mail it.

However, since the check is in my name, won't it still be my responsibility if it gets lost on the way to the pharmacy? Further complicating matters is that the pharmacy says the insurance company told them the check was for $24,000, not $20,000.

It seems I have three choices, none of which are exactly great:

1. Sign check over and send via registered mail (though just because it's registered doesn't mean it can't get lost)
2. Deposit check and send a personal check (resulting in tax and IRS reporting issues)
3. Wait until check expires and have insurance company send new check directly to pharmacy (is this even a thing?)

I'm hoping I'm missing something obvious. I hate having this hanging over my head.

I (and all parties) are in the USA.

Answer 1

The insurance company issued the check. I'd contact the insurance company to have the current check voided and a new one issued to the pharmacy.

Answer 2

Checks are awesome things in that, even if it gets lost the money doesn't change hands until the check is cashed. I would highly recommend NOT signing a check over and putting it in the mail though. Essentially putting your signature on it is saying yes, pay to whomever. Theoretically acceptable, rarely a good idea. Call the insurance company and have them cancel current check to reissue to the correct people. Don't forget to write VOID (in huge letters) on the check before throwing away and/or tearing it up.

Answer 3

Option 4: Go talk with someone in person at an office of the Insurance company. They have helped me several times with things like this. They can get everyone involved on a conference call and make something happen. But you have to go in. Calling is a good way to waste time and get nowhere, they will throw the issue back and forth.

Find an office and go. This is the most effective solution.

Answer 4

So:

1. The amount on the check is wrong
2. The check was made out to the wrong party

What you do:

1. Take a picture of the check; front and back
2. Let the pharmacy know what happened and that you are having the insurance company correct their mistake
3. Contact the insurance company and tell (don't ask) them that you are sending the check back. Write VOID on it.
4. When sending the check back, make sure to include a letter of explanation

Answer 5

Deposit check and send a personal check (resulting in tax and IRS reporting issues)

That's a bad idea, unless maybe the check you're receiving is a certified bank draft.

Suppose the insurance company are crooks and the check is fraudulent. It could take weeks or months for some investigation to catch up to that, long after your own personal check was cashed by the pharmacy.

The bank will then put you on hook for the 20 grand by reversing the check, even though the funds had been deposited into your account.

Do not put yourself into the position of a money handler; you don't have the cash base, insurance, government protection and whatever else that a bank has.

And, of course, you're being a free money handler if you do that. (You're not even compensated for postage, time and whatnot). If you're handling money between two parties, you should collect a percentage, or else refuse. That percentage has to be in proportion to the risk, since cashing a check for someone carries a risk similar to (and is effectively a form of) making a loan.

Answer 6

In one of your comments you say:

Even if the pharmacy is not in the insurance provider network?

This is why you got the check instead of your insurance company. I have Blue Cross/Blue Shield, and recently my wife underwent a procedure in the hospital, where one of the physicians involved was not in my providers network.

I got a letter from the physicians office stating that since they are out of network, the standard practice was for BCBS to issue the check to me, rather than to the provider. I received the check and made the payment.

The main contention is the difference in price, and that is what you need to discuss with both the pharmacy (actual billing) and your insurance company (paid benefits).

Answer 7

You mentioned depositing the check and then sending a personal check. Be sure to account for time, since any deposit over $10,000 the money will be made available in increments, so it may take 10-14 days to get the full amount in your account before you could send a personal check.

I would not recommend this option regardless, but if you do, just a heads up.

Answer 8

1. Write VOID on the check in sharpie.
2. Cut check down the middle.
3. Return check to sender.
4. Contact all parties telling them about the mistake.

Answer 9

This is not a mistake. This is done for "Out of Network" providers, and mainly when the patient is an Anthem member, be it Blue Shield or Blue Cross. Even though an "Assignment of Benefits" is completed by the patient, and all fields on the claim from (CMS1500 or UB04) are completed assigning the benefits to the provider, Anthem has placed in their policy that the Assignment of Benefits the patient signs is null and void.

No other carrier that I have come across conducts business in this manner. Is it smart? Absolutely not! They have now consumed their member's time in trying to figure out which provider the check is actually for, the member now is responsible for forwarding the payment, or the patient spends the check thinking Anthem made a mistake on their monthly premium at some point (odds are slim) and is now in debt thousands of dollars because they don't check with Anthem.

It creates a huge mess for providers, not only have we chased Anthem for payment, but now we have to chase the patient and 50% of the time, never see the payment in our office. It creates more phone calls to Anthem, but what do they care, they are paying pennies on the dollar for their representatives in the Philippines to read from a script.

Anthem is the second largest insurance carrier in the US. Their profit was over 800 million dollars within 3 months. The way they see it, we issued payment, so stop calling us. It's amazing how they can accept a CMS1500, but not follow the guidelines associated with it.

Your best bet, and what we suggest to patients, either deposit the check and write your a personal check or endorse and forward. I personally would deposit the check and write a personal check for tracking purposes; however, keep in mind that in the future, you may depend on your bank statements for proof of income (e.g. Social Security) and imagine the work having to explain, and prove, a $20,000 deposit and withdraw within the same month.