practice economics
Dealing with Unclaimed Property
Knowing the law can help you obtain assets you're entitled to.

Unclaimed property (or escheat) laws create both a legal issue and an opportunity for ophthalmology practices. First, your practice must be sure that it complies with your state's unclaimed property laws. Second, you should regularly find out if you have any unclaimed property to claim, and if so, claim it back from the state.

This month, I'll explain your responsibilities under your state's unclaimed property laws. Though the law requires you to report unclaimed property you hold, it can also help you collect assets you didn't even know were there for you to claim.

All states have laws that attempt to unite owners with their unclaimed property. These laws require ophthalmology practices holding certain types of abandoned or unclaimed personal property to report (and eventually remit) the unclaimed property to the state.

Property is considered unclaimed or abandoned if someone other than the owner holds the property and hasn't had any contact with the owner for typically 3 to 5 years. After that, the holder of the property must turn the property over to the state, which generally holds it until the owner is located.

What's Unclaimed Property?

Generally, unclaimed property can include such things as:

• cash
• inactive bank accounts
• uncashed checks (payor, payroll, dividends, tax refunds)
• unclaimed stocks and bonds
• unpaid wages
• unclaimed insurance benefits
• vendor and patient credits
• unused gift certificates
• unclaimed public utility and security deposits
• credit balances on accounts receivable
• contents of unclaimed safe deposit boxes
• unclaimed death benefits.

You Must Comply

Ophthalmology practices must annually report to the state any unclaimed property held. Most states have recently intensified enforcement of their unclaimed property laws and some have resorted to using "bounty hunters" to perform audits.

Noncompliance could result in you being liable for penalties, administrative fees and interest on the value of property that should have been turned over to the state.

Well-run ophthalmology practices shouldn't "lose" any of their own property. But what about property the practice doesn't know about or doesn't realize it's lost? For most practices, unclaimed property will be in the form of uncashed checks from HMOs, PPOs, insurance companies and other payors that the practice somehow never received, were lost, or were never cashed.

All states attempt to locate the rightful owners of unclaimed property and bring them together with their lost assets. They typically use newspaper listings and have searchable unclaimed property databases on the Internet to notify owners of their unclaimed property and how to claim it. Practices need to make sure to review the newspaper list when it comes out, and regularly search the online databases to see if the practice or any of it providers has any unclaimed property.

Filing a Claim

Once you locate unclaimed property, you must follow specific procedures to file a claim. Your state's Web site is often the best place to locate its claim procedures. You may have to jump through numerous hoops to perfect your claim, especially if the practice is a professional corporation (or other entity), or has changed its name over the years. If you look into this matter for your practice, you might be surprised at the results.

Mark E. Kropiewnicki, J.D., LL.M., is a principal consultant with The Health Care Group, Inc. and a principal and president of Health Care Law Associates, P.C., in Plymouth Meeting, Pa. He regularly advises physicians and practices on their contracting matters and business law obligations. He can be reached at (800) 473-0032.