> ## Documentation Index
> Fetch the complete documentation index at: https://mso.getlemma.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Unclaimed property (escheatment) by state
> How dormancy periods and due diligence requirements work, which state gets the property, where to find each state's rule, and the reporting cycle.
Uncashed patient refund checks, uncashed payroll, and aged credit balances become **unclaimed property** owed to a state. Every state has an unclaimed property law, they apply to healthcare practices, and audits look back many years.
This page gives the framework, the rules that hold across states, and how to find each state's current requirement. It does not give a 50-state table of dormancy periods. Those vary by state and by property type, are amended regularly, and several states have adopted versions of the Revised Uniform Unclaimed Property Act with their own modifications — a table of year counts would be wrong somewhere within months, and a wrong dormancy period produces either premature remittance or a late-filing penalty. The authoritative source for each state is its own unclaimed property administrator, indexed at [unclaimed.org](https://unclaimed.org/).
## Which state gets it
Governed by priority rules derived from US Supreme Court decisions on interstate escheat:1
1. The state of the owner's last known address in your records
2. If there is no address, or that state has no applicable law, the holder's state of incorporation
Consequences for an MSO-PC group:
* Property is reported to the patient's state, not necessarily yours
* A multi-state group reports to multiple states
* Address hygiene directly determines jurisdiction: a missing address defaults the property to your entity's state of incorporation
* Each PC is a separate holder with its own reporting obligation
## What the periods look like
Directional only. Confirm your states.
| Property type | Typical dormancy range |
| ------------------------------------------------------------ | ------------------------------------------------------------------- |
| Uncashed payroll / wages | Often shorter than general property, commonly 1 year in many states |
| General intangible property (refund checks, credit balances) | Commonly 3 to 5 years |
| Accounts payable / vendor credits | Similar to general property |
The pattern that matters operationally: payroll is usually shorter than everything else, so a departed employee's uncashed final check may be reportable well before a patient refund check issued the same month.
## What is consistent across states
Even though the numbers vary, the structure generally does not.
### Due diligence
Most states require a written attempt to contact the owner before reporting, typically:
* Sent to the last known address
* Within a specified window before the reporting deadline
* Often with prescribed content
* Frequently subject to a dollar threshold below which it isn't required
Retain a copy and proof of mailing. The letter is part of the compliance record, not just a courtesy.
### The reporting cycle
Most states use a fall reporting cycle with an annual deadline, filed electronically in a standard format with the property remitted alongside. A minority of states use a different cycle.
File per holder entity, per state. Each PC files its own.
### Record retention
States generally require retention for a period after reporting. An owner who later comes forward is directed to the state, but you may need to evidence what you reported.
## The pipeline
```mermaid theme={null}
graph LR
A[Check issued or credit balance created] --> B{Resolved?}
B -->|Yes| C[Done]
B -->|No, goes stale| D[Due diligence letter]
D --> E{Response?}
E -->|Yes| F[Reissue and resolve]
E -->|No| G[Dormancy period runs]
G --> H[Report and remit to the state]
H --> I[Retain records]
```
## The uncashed-check ledger
**This is the single control that determines whether an unclaimed property audit is a morning or a month.**
Record for every check: number, amount, payee, payee's last known address, issue date, entity, and clear date.
Unclaimed property audits are frequently conducted by contingency-fee third-party auditors, look back many years, and use estimation where records are incomplete, with the estimation methodology generally not working in your favor. Complete records are the defense.
Start the ledger before you issue your first check. Reconstructing it in year three from bank statements across multiple entities is exactly the work the audit will make you do.
Reconcile monthly. Anything outstanding past the stale date on your check stock moves to the due diligence queue.
## Aged credit balances count
An unrefunded patient credit balance is unclaimed property even if you never issued a check. Practices that leave credit balances sitting on accounts indefinitely are accruing an unclaimed property liability, not avoiding one. The weekly credit balance report is an escheatment control as much as a financial one. See [Resolve credit balances](/guides/payments/resolve-credit-balances).
## Voluntary disclosure
If you discover years of unreported property, common when a group looks for the first time, most states offer a voluntary disclosure agreement program: come forward, report the backlog, and typically receive penalty and interest relief.
**Voluntary disclosure is materially better than being audited.** If you have a backlog, take it to counsel and consider it before an audit letter arrives.
## How to find your state's rule
The National Association of Unclaimed Property Administrators indexes every state's administrator and reporting requirements.
Most states publish one, with dormancy periods by property type, due diligence requirements, thresholds, and the reporting deadline.
Payroll and general property separately.
States amend these.
## Multi-entity reporting
| Item | Implication |
| ------------------------------------------ | -------------------------------- |
| Each PC is a separate holder | Separate report per entity |
| Reporting follows the owner's state | One PC may report to many states |
| Dormancy periods differ per state per type | Track the matrix |
| Deadlines are per state | Calendar each |
| A ten-PC group | Potentially dozens of filings |
This is one of the quieter ways multi-entity overhead compounds, and a recurring diligence finding.
## Prevention
The best escheatment process is a small one:
1. **Refund promptly**, weekly credit balance review, resolution within 30 days
2. **Refund to the original payment method** where possible — card refunds don't go stale
3. **Verify addresses** before mailing
4. **Follow up on uncashed checks** at 30 and 60 days, before the stale date
5. **Collect and maintain good contact information** at registration
## Sources
1. Interstate priority rules derive from *Texas v. New Jersey*, 379 U.S. 674 (1965), and subsequent decisions. State administrators indexed at [unclaimed.org](https://unclaimed.org/). Many states have adopted versions of the Uniform Law Commission's Revised Uniform Unclaimed Property Act (2016) with state-specific modifications.
## Related topics
- [Handle uncashed checks and escheatment](/guides/compliance/handle-escheatment.md)
- [Issue a patient refund](/guides/payments/issue-a-patient-refund.md)
- [Resolve credit balances (patient and payer)](/guides/payments/resolve-credit-balances.md)
- [Patient refunds and credit balances, explained](/concepts/payments/refunds-and-credit-balances.md)
- [Patient refund timing requirements by state](/reference/banking/refund-check-requirements.md)