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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.

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  • 31
    You can't know it's really a mistake unless you ask your insurance company
    – Xen2050
    May 3, 2016 at 1:15
  • 9
    I still don't understand why Americans still fool around with checks and are so hesistant to use bank transfers. With them, you don't have this problem.
    – glglgl
    May 3, 2016 at 12:02
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    It seems incredible you would do (1) or (2). Don't do that. Phone the insurance company, tell them that as a courtesy you are pointing out they have made some serious mistake. Tell them they are allowed to come to your house and get the cheque if they want to. Re the pharmacy, it seems incredible they would suggest that you "sign it over to them", that is amazingly glib.
    – Fattie
    May 3, 2016 at 15:03
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    @JohnR.Strohm Well, it is good to know that some part of the government will do what it promises to do. We need a lot more of that. All jobs should work that way. "Off with their heads!"
    – user40079
    May 3, 2016 at 22:07
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    @johnr.strohm Maybe your local post office, but I've never gotten any kind of resistence sending registered mail.
    – Andy
    May 3, 2016 at 23:06

9 Answers 9

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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.

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  • 44
    +1 Agreed. At this amount of money, don't get in the middle of this unless you have no choice. Contact the insurance company and tell them you are voiding the check and sending it back to them.
    – Ben Miller
    May 2, 2016 at 19:50
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    The receivables people at a specialty pharmacy touch upwards of several hundred thousand dollars each day. $20k is an extremely common, even small, amount of money for them to deal with. Additionally, as with all receivables people, their primary concern is receiving payment. The fastest road to payment is the check that already exists. This is why the member should contact the insurance company, not the receivables person at the pharmacy.
    – quid
    May 3, 2016 at 16:57
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    The Ins co sent you the check because they figured that the provider (pharmacy, in this case) had already come after you for the money and so they are trying to reimburse you. You need to go talk with the Insurer in person to get it straightened out. Conference call, everyone agreeing to the same thing at the same time. Else, it just bounces around and doesn't land anywhere. Telling Insurer to reissue will not help, they already did what they thought was correct.
    – user40079
    May 3, 2016 at 22:10
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    @nocomprende We don't know any of that, and I don't see the point of guessing about it.
    – user207421
    May 4, 2016 at 22:56
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    My apologies for taking so long to accept this answer. By the time it was finally resolved (by taking your advice), months had passed and I'd forgotten I'd even asked. What a process!
    – aryxus
    Feb 9, 2017 at 19:40
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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.

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    Personally, I'd tear it, burn it, and flush the ashes. It sounds like a lot of work but it only takes a few seconds :)
    – corsiKa
    May 2, 2016 at 21:28
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    "Essentially putting your signature on it is saying yes, pay to whomever." I don't know US law here, but in the UK you can "endorse" a cheque payable to you, to make it payable only into the account that you name in the endorsement. But IMO the advice to "let the insurance company sort out their own mistake" is better.
    – alephzero
    May 3, 2016 at 0:11
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    If you Void it, hold on to it. Put it in a safe deposit box. Send the Ins co an image of the voided check with your ID or whatever. But do not let it out of your hands.
    – user40079
    May 3, 2016 at 1:14
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    It's amusing that your answer begins with "Checks are awesome things" and then proceeds to explain why they're actually a gigantic liability...
    – David Richerby
    May 3, 2016 at 2:01
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    Awesome = Inspires awe. Doesn't mean good!
    – Sobrique
    May 4, 2016 at 8:02
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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.

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    Is that even possible? Some medical insurance companies seem to be set up so that it's difficult to even talk to a real person on the phone, much less go talk to them in person!
    – user12515
    May 4, 2016 at 1:56
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    @Michael My Ins Co has "retail stores". Not many but a few. They were set up to help people with enrollment and other issues. Strange that there are auto and home insurance offices on every street corner here, but only two retail offices for medical insurance in an entire city. Still, they have been very helpful to me.
    – user40079
    May 4, 2016 at 3:25
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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
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    He doesn't know the amount is wrong. He knows the person at the pharmacy thinks they're expecting $24,000 not $20,000. The additional $4,000 may be applicable to a different claim or set of claims. Further, it's possible threadstarter is receiving the payment because of an error at the pharmacy when the claim was submitted.
    – quid
    May 2, 2016 at 21:36
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    The $4000 could be some sort of deductible, or the result of less than 100% coverage, or some coverage limit being exceeded. Someone at the insurance company may have mixed up, amidst discussion, between the full amount of the claim and the covered amount.
    – Kaz
    May 2, 2016 at 22:44
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    @quid In either case, I don't think any civilian should be comfortable in being the middle-man of a B2B transaction, nevertheless a giant B2B transaction, especially if everything used to go smoothly in the past. If this is some new policy that the insurance company implemented then that sounds ludicrous and OP should get it in writing.
    – MonkeyZeus
    May 2, 2016 at 23:49
  • @Kaz See my comment above
    – MonkeyZeus
    May 2, 2016 at 23:49
  • I simply commented on your surety that the insurance company was at fault here. We don't know that the amount is wrong. And it's possible the pharmacy indicated member reimbursement when it submitted the claim. I didn't say anything about whether or not anyone should be comfortable with some sum of money. And further, we don't know that everything used to go smoothly in the past. You've made a lot of assumptions.
    – quid
    May 2, 2016 at 23:59
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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.

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4

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).

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  • Not In Network is a nightmare. I had a situation where one of my providers was NIN in the morning, but magically was In Network in the afternoon of the same day. It was for a substantial amount (thousands) and Insurer gave me a check for a pittance, far below the usual rate they would (did, later that day) pay for that service. This was a mess that took about 6 months to straighten out, and afterward the provider still wanted to "balance bill" me. I begged off with a letter carried directly to the provider and my doctor and the referred-to doctor. A photo of my recognizable tattoo helped.
    – user40079
    May 3, 2016 at 22:18
  • John, did you sign the check over, or deposit it and write a check yourself? Did you take payment in personally, or pay through a portal or by postal mail? Just curious... I trust the mail, but there is something very satisfying about seeing something cleared up and put to rest, in person.
    – user40079
    May 3, 2016 at 22:21
  • In my case, it's all local, so I was able to take it over and sign the check over. If you send it via mail, just request it certified/insured with a signature receipt required.
    – JohnP
    May 3, 2016 at 22:23
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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.

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    I read somewhere that banks can retroactively void bad checks months after the fact. If you cash a bad check and then give someone else the money, that bad check could come back and haunt you months from now when the bank catches up with fraud, and you could be responsible for that deposit, with no way to get the money back that you already spent.
    – Kaz
    May 2, 2016 at 22:45
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    @Kaz Do you have any links/hard info on cheques being marked bad months later? I've read that some "nigerian scam" cheques can take 2 or 3 months to be discovered "bad", but very interested to know if there's a hard deadline after which a bank can no longer "take back your money", US/Can, Europe, anywhere
    – Xen2050
    May 3, 2016 at 1:13
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  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.
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    If you do send it back, DO keep a clear printed copy of the thing before you send it away. Don't discard any relevant paperwork until you are certain that the time for it to completely settle has lapsed - several years. I would recommend sending them the image and you keeping the original, in a very safe place. You can make more images if you have the original. Without it, you are out of luck.
    – user40079
    May 3, 2016 at 12:25
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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.

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