How Telehealth Growth Is Raising the Stakes for Patient Refund Compliance

Healthcare organizations have spent years modernizing how care is accessed. Patients can book appointments online, pay through digital channels, and even meet with their provider virtually through telehealth services.  

No longer a pandemic-era workaround, telehealth is now a standard part of care delivery, with 71.4% of physicians reporting use in their practices in 2024, nearly triple the 25.1% who reported using it in 2018, according to the American Medical Association.

While that growth is good for access, it also exposes new pressure points in payment operations.

A patient pays for a telehealth visit, and weeks later, the claim is processed and may reveal that a refund is owed. From there, a series of complex questions emerge: Which state’s rules apply? Who owns the credit? How should the refund be delivered? And what happens if the payment never reaches the patient?

For healthcare organizations operating across multiple states, navigating patient refunds is more than a revenue cycle task. Refunds often look minor at the transaction level, but across a large healthcare organization, small credits add up quickly; if handled incorrectly, they become a compliance and escheatment challenge negatively impacting patient trust.

Healthcare credit balances typically represent 1% to 5% of total gross accounts receivable. These balances can come from duplicate payments, coordination of benefits issues, payer adjustments, patient prepayments, retroactive coverage changes, or a claim that is reprocessed after the patient has already paid.

When those credits are not resolved, they may become unclaimed property. In healthcare, unclaimed property can include uncashed patient refund checks, unresolved credit balances, overpayments, and other funds owed to patients or payers. NAUPA reported that state unclaimed property programs returned $4.49 billion to rightful owners in FY 2024, showing the scale and visibility of unclaimed property obligations across industries.  

Recent enforcement activity makes the risk more concrete. In 2024, the California Attorney General announced a $7.7 million settlement with U.S. Healthworks over allegations that the company knowingly kept unclaimed property, including patient balances due to overpayment.  

For multi-state healthcare organizations, the takeaway is clear: patient refund compliance cannot be treated as a cleanup step after billing. It needs to be part of a controlled, visible refund lifecycle.

Coverage changes can create refund whiplash

Telehealth payments can move through several stages before the final responsibility is clear. A visit may be billed one way, adjusted later, denied, resubmitted, or retroactively covered, with each change creating a new refund decision.

That is not hypothetical. In October 2025, CMS held certain Medicare telehealth claims after some pandemic-era flexibilities lapsed. A month later, CMS said many of those payment provisions had been restored retroactively and told practitioners to refund beneficiaries who had paid for services that were now covered.

For healthcare teams, that creates a chain reaction. They must find the overpayment, confirm who owns the credit, issue the refund, document what happened, and track whether the patient actually receives the money.

If that process depends on spreadsheets, manual queues, and paper checks, risk builds quickly. A routine patient refund can turn into a stale payment, an exception, or an escheatment review.

Paper checks make visibility harder when it matters most

Even when the refund decision is correct, the delivery method can create new problems. A check can be mailed to an outdated address, delayed, misplaced, or left uncashed.

JPMorgan’s 2025 healthcare payments report found that 91% of providers issue refunds to patients for medical bill overpayments, and more than half still issue refunds by paper check.

For patients, this creates confusion and frustration. For healthcare organizations, it leads to reissue requests, service inquiries, stale-dated checks, and additional items that need to be reviewed for escheatment.

Digital patient refunds can help reduce friction, but modernization is not just replacing checks. The bigger opportunity is creating a more controlled refund lifecycle, one that gives teams visibility into where each payment stands and what happens next.

What a controlled refund lifecycle should include

For healthcare organizations managing multi-state healthcare payments, refund modernization reduces complexity without additional manual work. A stronger refund process supports both the patient’s experience and the organization’s compliance posture.

A controlled patient refund lifecycle helps teams:

• Confirm refund ownership: By determining whether the credit belongs to the patient, payer, or another party before funds are released.

• Support state-aware workflows: Better account for patient location, entity location, refund type, dormancy periods, and reporting obligations.

• Reduce check dependency: Offer digital patient refunds where appropriate while preserving physical payment options when needed.

• Track payment status: Maintain clear visibility into if a refund was delivered, claimed, expired, reissued, or escalated.

• Maintain audit-ready records: Easily document refund decisions, delivery attempts, reissues, outreach, and unclaimed property workflows.

• Improve the recipient experience: Make refunds faster, clearer and easier for patients to access.

As virtual care becomes a durable part of healthcare delivery, payment operations need to support the same level of scale, flexibility and accountability.

Patient refund compliance is part of the care experience

Telehealth has changed where care happens, and patients' expectations have changed with it. With 78% of patients saying they would consider switching providers after a poor payment experience, the stakes of a slow or confusing refund process extend well beyond compliance. Healthcare organizations that invest in a controlled, digital refund infrastructure aren't just reducing operational risk, they're protecting the patient relationships that drive long-term loyalty.

Is your refund process ready for multi-state telehealth?

Learn how Onbe helps healthcare organizations modernize patient refunds with secure, scalable payout experiences built for today’s payment complexity.