I received a support call the other day from a doctor that wanted to know why all of his patients had huge credit balances. I was able to discuss with the doctor the proper procedure for billing insurance and proper payment and write-off entry. After our conversation, he is well on his way to making sure he doesn’t lose any more money. Unfortunately, this wasn’t the first time I had received this type of call but I guess you could say it was the call that broke the camel’s back. I appreciate all of our customers and I want to make sure that all of my customers are making as much money as possible using our software, but that won’t happen if the software is not being properly used. Since this was not the first time I received this type of call that tells me that I have a number of customers and office managers that could benefit from a refresher course so they don’t lose any more money.
Let’s try a little quiz:
1) You’re not allowed to bill UCR fees when you are an in-network provider. True or False
2) If you put UCR on the claim form you have to write off the difference between what the insurance pays and what’s billed on the claim. True or False
If you answered true to either of these questions, then you will benefit the most from this blog. Question one, the answer is FALSE. You are absolutely allowed to put your UCR on the claim forms whether you are in-network or not. Otherwise, how would the insurance company know when they should increase your contracted fees. I know you’re probably laughing right now, but it does happen. When you put your UCR fees on the claim form and an insurance company knows that they are way underpaying you, they will give you a slight increase on your payment or increase your contracted fee schedule. It only happens once in a blue moon, but why cheat yourself? The fee schedule you bill on your claim form and the fee schedule you calculate your patient co-pays and write-offs on are completely separate, let me explain, look at the image below.
In the edit insurance plan screen
It doesn’t matter if you have claims show your UCR fee, checked or not, the fee schedule in the fee schedule field is what will drive your patient’s account. Let’s look at an example of an insurance claim. This will also give you the answer to question number two.
The red box shows you the total of the contracted fees, if you’re in-network this is what the insurance company is willing to pay you. Notice the black line, this is the total of your UCR fee you are showing the insurance company what your services are worth, but the far right-hand column of the account module is what you are going to get paid on. The top line of the claim is really just more of an F.Y. I. Now, look at the blue circles. Notice that the estimated payment from the insurance company and the estimated payment from the patient portion do not exceed the total at the top of the account module. THIS IS IMPORTANT, REMEMBER THIS! Once you receive the patient portion the total amount left to be paid is $99.20 by the insurance.
Realistically, you will not receive full payment of $99.20. There will be a write-off, but do you know what fee you are writing off against? Look at the charges column in the image above. Remember that $87.00 is your contracted fee. Now let’s go over making insurance payments.
When you post your payment you will probably see a lower number, something more like this.
So how do you determine your write-off? Reminder, you only have to write off against your contracted fee. You also only have a remaining balance of $99.20 on the account. If your total balance is $99.20 and the insurance paid $73.60 your write-off should not exceed $25.60. Let’s look at the math.
When you are finished your account should look like this.
If you have a credit balance (example -$25.60) after posting an insurance payment, then there was either an overpayment entered or too much entered in the write-off. Once all payments and write-offs are made the patient’s account should be zero. If you didn’t collect the co-pay at the time of service, then after your insurance payment and write off the patient’s account should have a balance owing.
In a nutshell, you can’t run a business owing your patients, so why have reports that reflect that? It would be as though you were paying the patients for you to do work on them. That doesn’t make any sense. I do understand that there are some contractual obligations that must be met according to some insurances, but NO MATTER what that obligation is, your accounts should never show a credit. I hope this blog helps bring some light to the process of entering insurance payments and write-offs, if you have any questions don’t hesitate to call support.
Until next time 😀