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I worked on a billing and AR system for a small pharmacy chain years ago. Our company would get pretty large random checks from ins carriers totally out of the

I worked on a billing and AR system for a small pharmacy chain years ago. Our company would get pretty large random checks from ins carriers totally out of the blue. As in, we had billed them nothing and they would send us $150k checks in snail mail. They wouldn’t realize their mistake and come asking for it back for months. We had a special account named “magic money” for it. The billing world is crazy town.

dns_snek 3y ago
Fascinating, is there ever a point where this "magic money" legally becomes your property, after a certain amount of time?
- kasey_junk 3y ago
  Depends on the jurisdiction but typically no.
- scott_w 3y ago
  Short answer "it depends." Long answer: It depends on your jurisdiction, the entities involved, the amount of money involved, and probably more. However, it's not possible to know ahead of time, you'd need to go to court and argue why this entity is being unreasonable in demanding the money be returned.
- indymike 3y ago
  In the US, you are supposed to turn it over to the state, and the government holds it for an extremely long time until it's owner claims it.
  - alsetmusic 3y ago
    Also, you're probably not going to win a dispute with a / the state. The USA government stole my money once (bank transfer). It was a rent payment to a landlord with a Muslim-sounding name. I contested it by sending in their form with the case number that they'd provided me. They responded saying they had no case matching my info. I gave up before investing more time because I thought it was unlikely to end well for the amount of effort I'd have to invest. I started directly depositing money orders into his account. No problems after that. The USA government profited one month of my rental rate. I nearly got evicted when my rent wasn't delivered. No explanation was ever given to me.
    - aftbit 3y ago
      Ah but if you _do_ want to win a dispute with the state, you must not give up when you hit a logical contradiction. The only way out is through.
    - pc86 3y ago
      This isn't "I lose a dispute with the state," it's "I hit a pebble-sized roadblock and immediately gave up." I'm glad that a month's rent isn't a lot of money to you but this probably shouldn't inform your opinion on how it is to interact with the state.
- hansvm 3y ago
  There was a fairly recent case [0] exploring a situation in which the amount of time is 0. In that jurisdiction, if somebody owes you money and pays you money, they aren't entitled for that particular payment to be returned just because it was an "accident". [0] https://www.google.com/amp/s/amp.cnn.com/cnn/2021/02/16/business/citibank-revlon-lawsuit-ruling/index.html https://www.google.com/amp/s/amp.cnn.com/cnn/2021/02/16/busi...
  - pjc50 3y ago
    The "if they owe you money" is very important here.
  - cschneid 3y ago
    that is a different case. That was a payment on a real debt, just earlier than intended (and due to a mistake). The top comment was talking about money that wasn't even billed. They don't have any actual service or product it was tied back to. Also if they do have agreements with that insurer (just no payments pending), there is going to be a contract overriding default law which probably covers how to handle mistakes.
  - rmasters 3y ago
    That ruling was overturned on appeal. https://www.reuters.com/markets/us/citigroup-wins-appeal-over-mistaken-revlon-wire-transfer-2022-09-08/ https://www.reuters.com/markets/us/citigroup-wins-appeal-ove...
    - hansvm 3y ago
      Interesting!
  - PKop 3y ago
    The question was obviously referring to money not owed.
    - hansvm 3y ago
      Absolutely (hence the low word count, many of which were dedicated to highlighting that distinction). When learning about a topic though, it's helpful to explore surrounding ideas.
- bluGill 3y ago
  Check with a lawyer, this varies all over the world and you don't want to mess this up. Not only might the money become theirs again, it might become theirs with interest. Though you might be able to charge them storage fees. don't forget that laws change so keep in touch with your lawyers so they notify you when laws changes so you can remain complaint. Make sure you keep record of what the lawyers say as well - if (when?) you mess something up record of trying to do the right thing can work to your favor in court.
  - chasd00 3y ago
    I was just a kid at the time, I can't remember what they did with it over time. I do remember it getting pretty large one time and the executives were nervous about this pile of money they didn't know what to do with. The CEO/owner was a very honorable and decent guy though and I have 100% confidence whatever was the RightThing(tm) to do is what he did. heh 20 something years later and he still takes my calls to listen to my crazy business ideas.
mytailorisrich 3y ago
Why did you cash/deposit the checks?
- ceejayoz 3y ago
  Because the people with letter openers in the mail room aren’t accountants?
  - djbusby 3y ago
    Right, they open the mail and give the check to the accountant, who deposited it. And we still want to know why.
    - arnon 3y ago
      Cashflow and Revenue are two separate concepts. You can cash a check today for revenue you accounted for 90 days ago. You need to reconcile it but it doesn't have to happen at the same time. It's very normal to reconcile months later.
    - ceejayoz 3y ago
      The minimum wage employee who stamps the check and deposits it at the bank with the hundred others in the pile isn't an accountant either. The accountants just go "huh, this one doesn't match up with anything" later on.
      - velcrovan 3y ago
        > The minimum wage employee who stamps the check and deposits it at the bank with the hundred others in the pile isn't an accountant either. That’s not how any of this works lol
        staunton 3y ago
        > That’s not how any of this works lol How does it work?
paulhart 3y ago
AKA a suspense account (in this case tied to the sender). “I have money from this entity but I don’t yet know why”.
- chasd00 3y ago
  sometimes the eob (explanation of benefits) would eventually show up but it would have no check number to tie it back to the payment. It would also span checks so you really had no way to tie what payment went to what prescription. You just had a pile of money and a pile of billed prescriptions. AR reconciliation, trying to figure out who paid for what and how much you're owed and how old it is, was a dark art and the code had all kind of tweaks for specific payers accommodating for all their payment inconsistencies. Some payers met the terms of the contract, some didn't, some had bugs where they'd over/under pay $1 in certain circumstances etc. It was a mess, i'd tell the payers to fix their system but they'd just blow me off (I was pretty naive at the time). Interestingly, i could tell when multiple payers leased the same system because there would be strange bugs consistent across payers. That $1 over/under payment sticks out in my mind 25 years later.
throwitaway222 3y ago
I wonder if you billed other entities (people?), and those bubbled to insurance carriers, meanwhile you left the accounts of those people in debt because no one cared to follow it back - call it magic money and leave the debt on people's accounts anyway?

dns_snek 3y ago

Fascinating, is there ever a point where this "magic money" legally becomes your property, after a certain amount of time?

kasey_junk 3y ago
Depends on the jurisdiction but typically no.
scott_w 3y ago
Short answer "it depends." Long answer: It depends on your jurisdiction, the entities involved, the amount of money involved, and probably more. However, it's not possible to know ahead of time, you'd need to go to court and argue why this entity is being unreasonable in demanding the money be returned.
indymike 3y ago
In the US, you are supposed to turn it over to the state, and the government holds it for an extremely long time until it's owner claims it.
- alsetmusic 3y ago
  Also, you're probably not going to win a dispute with a / the state. The USA government stole my money once (bank transfer). It was a rent payment to a landlord with a Muslim-sounding name. I contested it by sending in their form with the case number that they'd provided me. They responded saying they had no case matching my info. I gave up before investing more time because I thought it was unlikely to end well for the amount of effort I'd have to invest. I started directly depositing money orders into his account. No problems after that. The USA government profited one month of my rental rate. I nearly got evicted when my rent wasn't delivered. No explanation was ever given to me.
  - aftbit 3y ago
    Ah but if you _do_ want to win a dispute with the state, you must not give up when you hit a logical contradiction. The only way out is through.
  - pc86 3y ago
    This isn't "I lose a dispute with the state," it's "I hit a pebble-sized roadblock and immediately gave up." I'm glad that a month's rent isn't a lot of money to you but this probably shouldn't inform your opinion on how it is to interact with the state.
hansvm 3y ago
There was a fairly recent case [0] exploring a situation in which the amount of time is 0. In that jurisdiction, if somebody owes you money and pays you money, they aren't entitled for that particular payment to be returned just because it was an "accident". [0] https://www.google.com/amp/s/amp.cnn.com/cnn/2021/02/16/business/citibank-revlon-lawsuit-ruling/index.html https://www.google.com/amp/s/amp.cnn.com/cnn/2021/02/16/busi...
- pjc50 3y ago
  The "if they owe you money" is very important here.
- cschneid 3y ago
  that is a different case. That was a payment on a real debt, just earlier than intended (and due to a mistake). The top comment was talking about money that wasn't even billed. They don't have any actual service or product it was tied back to. Also if they do have agreements with that insurer (just no payments pending), there is going to be a contract overriding default law which probably covers how to handle mistakes.
- rmasters 3y ago
  That ruling was overturned on appeal. https://www.reuters.com/markets/us/citigroup-wins-appeal-over-mistaken-revlon-wire-transfer-2022-09-08/ https://www.reuters.com/markets/us/citigroup-wins-appeal-ove...
  - hansvm 3y ago
    Interesting!
- PKop 3y ago
  The question was obviously referring to money not owed.
  - hansvm 3y ago
    Absolutely (hence the low word count, many of which were dedicated to highlighting that distinction). When learning about a topic though, it's helpful to explore surrounding ideas.
bluGill 3y ago
Check with a lawyer, this varies all over the world and you don't want to mess this up. Not only might the money become theirs again, it might become theirs with interest. Though you might be able to charge them storage fees. don't forget that laws change so keep in touch with your lawyers so they notify you when laws changes so you can remain complaint. Make sure you keep record of what the lawyers say as well - if (when?) you mess something up record of trying to do the right thing can work to your favor in court.
- chasd00 3y ago
  I was just a kid at the time, I can't remember what they did with it over time. I do remember it getting pretty large one time and the executives were nervous about this pile of money they didn't know what to do with. The CEO/owner was a very honorable and decent guy though and I have 100% confidence whatever was the RightThing(tm) to do is what he did. heh 20 something years later and he still takes my calls to listen to my crazy business ideas.

mytailorisrich 3y ago

Why did you cash/deposit the checks?

ceejayoz 3y ago
Because the people with letter openers in the mail room aren’t accountants?
- djbusby 3y ago
  Right, they open the mail and give the check to the accountant, who deposited it. And we still want to know why.
  - arnon 3y ago
    Cashflow and Revenue are two separate concepts. You can cash a check today for revenue you accounted for 90 days ago. You need to reconcile it but it doesn't have to happen at the same time. It's very normal to reconcile months later.
  - ceejayoz 3y ago
    The minimum wage employee who stamps the check and deposits it at the bank with the hundred others in the pile isn't an accountant either. The accountants just go "huh, this one doesn't match up with anything" later on.
    - velcrovan 3y ago
      > The minimum wage employee who stamps the check and deposits it at the bank with the hundred others in the pile isn't an accountant either. That’s not how any of this works lol
      - staunton 3y ago
        > That’s not how any of this works lol How does it work?

paulhart 3y ago

AKA a suspense account (in this case tied to the sender). “I have money from this entity but I don’t yet know why”.

chasd00 3y ago
sometimes the eob (explanation of benefits) would eventually show up but it would have no check number to tie it back to the payment. It would also span checks so you really had no way to tie what payment went to what prescription. You just had a pile of money and a pile of billed prescriptions. AR reconciliation, trying to figure out who paid for what and how much you're owed and how old it is, was a dark art and the code had all kind of tweaks for specific payers accommodating for all their payment inconsistencies. Some payers met the terms of the contract, some didn't, some had bugs where they'd over/under pay $1 in certain circumstances etc. It was a mess, i'd tell the payers to fix their system but they'd just blow me off (I was pretty naive at the time). Interestingly, i could tell when multiple payers leased the same system because there would be strange bugs consistent across payers. That $1 over/under payment sticks out in my mind 25 years later.

throwitaway222 3y ago

I wonder if you billed other entities (people?), and those bubbled to insurance carriers, meanwhile you left the accounts of those people in debt because no one cared to follow it back - call it magic money and leave the debt on people's accounts anyway?