By: Sinead Killeen
As of January 1, 2026, Florida has implemented a significant new law aimed at protecting patients from delayed refunds on overpayments to healthcare providers. Florida Statute 408.12, enacted through Chapter 2025-48, establishes clear requirements for licensed healthcare facilities to promptly return excess payments made by patients. This statute, along with a parallel provision in Section 456.0625 for individual healthcare practitioners, addresses a common issue in medical billing where overpayments can arise from coding errors, insurance coverage adjustments, or simple administrative mistakes.
Healthcare providers, including hospitals, nursing homes, assisted living facilities, laboratories, and other entities licensed by the Agency for Health Care Administration (AHCA), must now refund any patient overpayment within 30 days of determining that such an overpayment occurred. The law specifically applies to situations where the provider “tenders charges for reimbursement,” meaning they file a claim with a government-sponsored program (like Medicare or Medicaid), a private health insurer, or a health maintenance organization (HMO) for services rendered to the patient. Importantly, this does not cover overpayments already governed by existing statutes, such as Sections 627.6131 or 641.3155, which deal with payments from health insurers or HMOs.
Key Requirements Under Statute 408.12
The statute outlines straightforward obligations but with strict timelines:
· Refund Timeline: Providers must issue refunds no later than 30 days after identifying an overpayment. This determination could stem from internal audits, patient inquiries, or post-insurance adjudication reviews.
· Scope of Application: It applies to licensed facilities that submit claims for reimbursement. For individual practitioners (e.g., physicians, dentists, pharmacists) and their associated billing departments, management companies, or group practices, similar rules are enforced under Section 456.0625.
· Exclusions: Overpayments from insurers or HMOs are exempt, focusing the law solely on direct patient payments in reimbursed scenarios.
Failure to comply is treated as an unclassified violation under Section 408.813, potentially resulting in administrative fines of up to $500 per violation for facilities. For practitioners, violations under Section 456.0625 can lead to more severe disciplinary actions, including fines up to $10,000 per offense, license suspension, probation, or other penalties as outlined in Section 456.072.
Potential Issues and Risks for Providers
While the intent of the law is to promote transparency and patient trust, it introduces several operational challenges that healthcare providers should address proactively:
· Identification of Overpayments: Providers may struggle to detect overpayments promptly, especially in complex billing environments involving multiple payers. Delays in reconciliation processes could inadvertently lead to violations if refunds aren’t issued within the 30-day window.
· Compliance and Training Needs: Billing staff, administrators, and practitioners will require training on the new requirements. Without updated policies, there’s a risk of repeated violations, escalating fines, or reputational damage. For group practices or management companies handling billing, the law extends liability, making it essential to review third-party agreements.
· Administrative Burden: Smaller providers or those with limited resources might face increased costs for implementing tracking systems or conducting regular audits. In high-volume settings, even minor errors could accumulate into significant compliance issues.
· Enforcement Uncertainty: As a newly enacted law (originating from Senate Bill 1808 in the 2025 legislative session), initial enforcement by AHCA or professional boards could vary, but providers should anticipate scrutiny through audits or patient complaints.
These risks underscore the need for robust internal controls to minimize exposure.
Steps Providers Can Take to Ensure Compliance
To mitigate potential issues, healthcare providers should consider the following actions:
1. Review Billing Processes: Conduct an internal audit of current overpayment identification and refund procedures to align with the 30-day mandate.
2. Implement Training Programs: Educate staff on the statute’s requirements, including how to document overpayment determinations and process refunds efficiently.
3. Update Policies and Systems: Integrate automated alerts in billing software to flag potential overpayments and track refund timelines.
4. Monitor for Updates: Stay informed on any AHCA guidance or amendments, as the law is in its early implementation phase.
By addressing these areas, providers can not only avoid penalties but also enhance patient satisfaction through timely and fair financial practices.
Potential Impact on Physician Licensure
Physicians and other healthcare practitioners licensed under Chapter 456, Florida Statutes, face significant risks to their professional licensure for non-compliance with Section 456.0625, which mandates timely refunds of patient overpayments. This provision explicitly states that violations constitute grounds for disciplinary action by the relevant professional board, such as the Florida
Board of Medicine for physicians, pursuant to Section 456.072. Unlike the administrative fines primarily applicable to facilities under Section 408.12, practitioner violations can trigger a broader range of penalties that directly threaten licensure status.
Grounds for Discipline
Failure to refund overpayments within the required 30-day timeframe is codified as a specific ground for discipline under Section 456.072(1)(tt). This places it alongside other serious infractions, such as fraud, improper prescribing, or health care-related crimes. The Department of Health (DOH) or the Board may initiate investigations based on patient complaints, audits, or self-reported issues, potentially leading to formal administrative complaints.
Possible Penalties and Licensure Consequences
If found guilty, physicians could face one or more of the following penalties under Section 456.072(2), which escalate based on the severity and frequency of violations:
· Administrative Fines: Up to $10,000 per violation or offense. While not directly revoking a license, accumulated fines could strain practices financially.
· License Suspension or Revocation: Temporary or permanent loss of licensure, severely impacting a physician’s ability to practice medicine in Florida.
· Probation: Placement on probation with conditions like mandatory education, monitoring, or restrictions on practice, which could limit scope or require oversight.
· Reprimand or Letter of Concern: Formal notations on a physician’s public record, which may affect credentialing, insurance participation, or employment opportunities.
· Other Measures: Refunds of fees, corrective actions, or remedial education to address billing deficiencies.
Repeated or egregious violations may result in harsher outcomes, including referral to law enforcement if fraud is suspected. Additionally, disciplinary actions are publicly reported and can harm a physician’s reputation, leading to indirect impacts like loss of hospital privileges or malpractice insurance challenges.
Mitigation Strategies
To safeguard licensure, physicians should integrate compliance with Section 456.0625 into their practice management. This includes regular training for billing staff, implementing audit protocols to identify overpayments promptly, and documenting all refund processes meticulously. Group practices and management companies handling billing are also liable, so reviewing contracts and shared responsibilities is crucial. We strongly advise consulting healthcare legal experts to assess individual risks and develop tailored compliance plans, especially as enforcement ramps up in this statute’s inaugural year.
Conclusion
Florida Statute 408.12 represents a step toward greater accountability in healthcare billing, but it demands immediate attention from providers to avoid unintended consequences. As representatives of healthcare providers, we recommend consulting with legal counsel to tailor compliance strategies to your specific operations. If you’re a Florida-based provider navigating this change, proactive measures today can prevent costly issues tomorrow. For more information or assistance, reach out to our team.
