The Right Way to Do Write-offs

A write-off is an amount that a practice deducts from a charge and does not expect to collect, thereby “writing it off” the accounts receivable or list of monies owed them by payers or patients.

There are lots of reasons why write-offs are taken, and it is common practice to divide write-offs into two major categories.

Necessary or Approved Write-offs

These are write-offs that you have agreed to, either in the context of a contract, or in terms of your practice philosophy.

Contractual write-offs are the difference between the practice fee schedule and the allowable fee schedule you’ve agreed to accept.

Charity write-offs are the difference between the practice fee schedule and anything collected. Charity write-offs may be in accordance with a community indigent care effort, a policy adhered to in a faith-led healthcare system, or a financial assistance program.

Small balance write-offs are amounts left on the patient’s account that may not warrant the cost of sending a bill, which has been estimated to cost about $12.00 each, taking into account the statement process, as well as the cost to receive the check, post it, and deposit it. Many practices write off the small balance (usually $15 or less) and collect it when the patient returns. Others run a special small balance statement run once a quarter.

Prompt payment discounts and self-pay (no insurance) discounts are write-offs for patients paying in full at time of service, and/or patients who receive a discount off the retail price because they do not have insurance coverage.

 

Unnecessary Write-offs

These are write-offs that you have not agreed to and you reluctantly reduce the charge based on billing mistakes or situations that you should have been able to control, but were not.

Timely filing write-offs are caused by filing the claim past the date required by the payer. Medicare requires that claims be filed no later than 12 months after the date of service to be paid. Medicaid varies from state-to-state. Commercial payers usually have very tight timely filing limits and most average three months. (Make sure you know your timely filing limits for each payer.)

Uncredentialed provider write-offs are those caused by filing a claim for a provider before they are credentialed with the payer.

Administrative write-offs are those approved by the manager based on service issues. For instance, if the practice assures the patient that they are participating with the patient’s insurance, then it turns out that the practice is not in-network, the manager may approve a write-off based on the practice’s error. If the patient has a very bad experience in the practice, the manager may want to discount the service or to write-off the charge completely. If  you do discount the service, remember to submit the claim for the altered fee, as you cannot discount the fee to patient and charge the payer the full fee.

Bad debt write-offs are balances that you have decided to write-off and not pursue further. These are balances that for whatever reason, you are forgiving forever.

Collection agency write-offs are those that are written off the main A/R (accounts receivable) and transferred to a third-party collection agency to collect on your behalf. These balances are not forgiven. Some PM (practice management) systems maintain a separate collection bucket or A/R and others do not maintain collection accounts in the system. Most practices do not schedule appointments with patients that have a collection balance until that balance is satisfied or the patient is committed to a reasonable payment plan.

 

Some guidelines for managing write-offs

  1. Start with the basic write-offs but add write-off categories as the need arises.
  2. Decide which write-offs require managerial approval. Do not make staff get approval for routine write-offs, but do not completely relinquish approval for all write-offs as this is one place where staff could abuse their authority. Make sure write-offs are addressed in your compliance plan so staff understand their responsibilities.
  3. Review all write-off categories monthly and pay attention to unusual spikes as well as creeping trends. Keep in mind that if you raise your fees and don’t renegotiate your contracts, your contractual write-offs are going to escalate, and you’ll need to account for that difference in your evaluation.
  4. Audit write-offs periodically to make sure that they are being done correctly. Staff will know that their work is being checked and you can be sure the numbers you are making business decisions on are sound.
  5. Best practices for unnecessary write-offs are no more than 5% of your total expected collections. The formula for expected collections is gross charges minus necessary/approved write-offs.

Posted in: Collections, Billing & Coding, Compliance

Leave a Comment (51) ↓

49 Comments

  1. Shaker September 26, 2011

    money not collected for services performed?
    Is there way to claim loss on tax, because one has spent time /money/materials providing such a care.
    Thanks

  2. Mary Pat Whaley September 26, 2011

    Hi Dr. Shaker,

    Unfortunately most practices are on a cash basis, so there is no loss claimed for uncollected receivables.

    Best wishes,

    Mary Pat

  3. Stinger, laraine September 26, 2011

    what about how to write off the patient balance after a patient complaint about the care and receipt of payment from the first party payor?

  4. Jeff Rimmel September 26, 2011

    Dear Mary Pat,

    My practice is all “out of network”. I do cosmetic and medically necessary surgeries alone and in combination. My fees are considerably higher than most insurance payers will allow so, I often must discount / write off a portion of my fees. I still want to bill the insurnace payers for the full amount of my fees, but want to let the patient know that I will accept what the insurance provider will pay me without pursuing the patient for the balance? Is there a right and wrong way to do this?

    Thank you.

  5. Mary Pat Whaley September 27, 2011

    Thanks, Michelle!

    Best wishes,

    Mary Pat

  6. Mary Pat Whaley September 27, 2011

    Hi Jeff,

    I’ll respond to you via email.

    Best wishes,

    Mary Pat

  7. Mary Pat Whaley September 27, 2011

    Hello,

    If you write off the patient balance after the insurance company has paid, most payers with whom you have a contract will require you to file an amended claim and when requested, submit a refund to them. That being said, I don’t know of any practices following this protocol if this situation happens infrequently.

    Best wishes,

    Mary Pat

  8. Carol Po November 7, 2011

    Dear Mary Pat,
    we are considering opting out of most insurance companies. Fee schedules have either remained the same or been reduced in the last few years to the point that a practitioner can no longer make a living or sustain a practice. If claims are filed from the office at $x, and the patient is offered “an $insurance only” or “discount,” is there any legal ruling that prevents the provider from giving that discount – since there is no contractual obligation?

  9. Mary Pat Whaley November 9, 2011

    Hi Carol,

    I think many practices are thinking the way you are.

    If you do not have a contract with an insurance company, you are not bound by any of their rules. Most large companies try to discourage providers from doing this by sending payment to the patient when you file the claim. Depending on your specialty, this can be problematic. Surprisingly, not every patient will run the check right into your office and sign it over to you! The Blues are particularly fond of employing this strategy.

    As far as discounting, you can discount your fees however you like, but if you participate with Medicare, they require that you not discount other patients below their allowables unless it is for documented financial need.

    Best wishes,

    Mary Pat

  10. Dr Fields January 5, 2012

    Mary Pat, just curious, but my understanding is that large medical institutions such as hospitals DO apply what they have “written off” from the insurance providers as a “reduction against their gross revenue” Is this correct, and if so can individual providers do this?? Thanks CF

  11. Mary Pat Whaley January 5, 2012

    Hi Dr. Fields,

    Yes, you can write this off if you are on an accrual basis of accounting. This is quite different from the cash basis of accounting, which most practices use. In a hospital you “book the revenue” when the service is performed. In practices, nothing goes on the books until a payment is made. I don’t suggest you use the accrual method, but you should talk to your CPA about it if you want more details.

    Best wishes,

    Mary Pat

  12. Stephanie July 9, 2012

    Just a question regarding contracted write offs from the insurance company. If this write off results in a credit balance on the patients account is the office required to cut a refund check for the amount of the insurance write off back to the patient?

  13. Mary Pat Whaley July 11, 2012

    Hi Stephanie,

    The answer to your question is yes, if the amount the patient has paid is more than the their responsibility per the payer’s EOB, you must refund the patient.

    Best wishes,

    Mary Pat

  14. Susan Elser July 31, 2012

    What is the law regarding writing off the balance after insurance or lowering the price for specific patients based on the insurance allowable but not lowering the price for everyone? Is there a difference between in the law for private clinics and hospitals vs. those that are financed by taxes or warrants?

  15. Mary Pat Whaley July 31, 2012

    Hi Susan,

    Regardless of how your medical entity is financed, if you are a Medicare provider, you cannot charge other patients less than you charge Medicare patients. The exception to that is financial need. To avoid fraud, you must have a written financial assistance program and apply it equally to all patients. If you want to give a break to certain patients, you are better off to not charge them at all. If you waive co-pays, co-insurance or deductibles, you are non-compliant with the contract you have with the payer.

    Best wishes,

    Mary Pat

  16. Philip September 12, 2012

    We provide services to physician offices and are reimbursed by the practice. We have experienced many of our practice’s writing off patient balances when no collection efforts have been made. I am aware that this is illegal for Medicaid and Medicare patients but can you please point me in the right direction with regard to specific laws/regulations that prohibit this kind of activity both with federal and commercial payers?

  17. Mary Pat Whaley September 12, 2012

    Hi Philip:

    Commercial payers require you to file your charges reduced by the co-pay if you do not intend to collect it. Example: Your charge is $100.00, but you are waiving the co-pay of $25.00. The payer expects you to bill them for $75, not $100 because you are waiving the co-pay. Each payer will have different language to this effect in their contract.

    The only safe way to write-off patient balances is to have a patient assistance program where you identify patients in financial need and give them a discount. This is allowable as long as you can prove you have fairly applied the same criteria to all patients who applied to your program for financial relief.

    As far as Medicaid, check with your state to see if they have language about collecting co-pays. I have been in practices where they collect the co-pay (usually $3.00) and I have been in offices where they think they lose money collecting the co-pay and therefore do not collect it. I have never seen language that absolutely required it!

    Here is the answer on Medicare from the Medicare Department of Health and Human Services (DHHS) & Centers for Medicare and Medicaid Services (CMS)
    Provider Reimbursement Manual – Part 1, Chapter 3, , Transmittal 435, Date: MARCH 2008

    310. REASONABLE COLLECTION EFFORT
    To be considered a reasonable collection effort, a provider’s effort to collect Medicare deductible and coinsurance amounts must be similar to the effort the provider puts forth to collect comparable amounts from non-Medicare patients. It must involve the issuance of a bill on or shortly after discharge or death of the beneficiary to the party responsible for the patient’s personal financial obligations. It also includes other actions such as subsequent billings, collection letters and telephone calls or personal contacts with this party which constitute a genuine, rather than a token, collection effort. The provider’s collection effort may include using or threatening to use court action to obtain payment. (See §312 for indigent or medically indigent patients.)

    A. Collection Agencies.–A provider’s collection effort may include the use of a collection agency in addition to or in lieu of subsequent billings, follow-up letters, telephone and personal contacts. Where a collection agency is used, Medicare expects the provider to refer all uncollected patient charges of like amount to the agency without regard to class of patient. The “like amount” requirement may include uncollected charges above a specified minimum amount. Therefore, if a provider refers to a collection agency its uncollected non-Medicare patient charges which in amount are comparable to the individual Medicare deductible and coinsurance amounts due the provider from its Medicare patient, Medicare requires the provider to also refer its uncollected Medicare deductible and coinsurance amounts to the collection agency. Where a collection agency is used, the agency’s practices may include using or threatening to use court action to obtain payment.

    B. Documentation Required.–The provider’s collection effort should be documented in the patient’s file by copies of the bill(s), follow-up letters, reports of telephone and personal contact, etc.

    If your practices are doing all these write-offs because it’s so much trouble to collect at the time of service, introduce them to my Credit Card On File Program – it does away with statements and collections and patients really like it!

    Best wishes,

    Mary Pat

  18. Rhonda November 14, 2012

    We have a dental practice in Oregon, we want to give our employee’s a discount on dental services. Some of our employee’s have dental insurance, we collect what the ins. company pays and write off the difference. For those that do not have ins. we take the write off at the time of service. Are we doing this correctly, is there a law against this?

  19. Mary Pat Whaley November 15, 2012

    Hi Rhonda,

    Yes, you may write off balances for employees, as long as you have the policy in writing and that policy is applied to all employees. For instance, your policy might state that “All full-time (or all FT and PT) employees will receive discounts on dental services at XYZ Dental Clinic. This discount policy is subject to change without notice based on the discretion of XYZ Clinic.” You do not have to spell out the details of the policy in that you apply it differently to employees with insurance vs. employees without insurance, but you can if you prefer. The important thing is that you have a policy and adhere to it.

    Best wishes,

    Mary Pat

  20. Judy Konstans January 19, 2013

    Mary Pat,
    I came across an instance in my physicians practice that a co-worker automatically wrote-off a physician charge.

    The patient had come in and stated that their insurance had lapsed therefore they were trying to qualify for a charity case.

    Per the insurance in question’s website the patient was eligible, but the co-worker had inactivated the insurance in the patient’s account.

    When the error was discovered, the timely filing limit would have come into play. So, without billing the insurance and receiving an EOB or billing the patient therefore creating a paper trail the co-worker just wrote off the charge.

    Are there legal ramifications associated with this?

    Thank You,
    Judy Konstans

  21. Mary Pat Whaley January 22, 2013

    Hi Judy,

    I don’t think that there are any legal ramifications per se, but obviously this is a mistake that was made and the practice has to eat the service. I am not clear why the service was written off at the point that it was, but the practice should have all non-standard write-offs approved by a manager. If you think that the employee who wrote off the service had a different motive and did not simply make a mistake, then this is an entirely different situation and should be addressed by the manager.

    Best wishes,

    Mary Pat

  22. Sindy February 26, 2013

    Mary Pat,

    We have been told different things from different peoples. With contracted insurance companies, the office must always write off the office fee to the allowable charge. Now, what if the office is not contracted? Can the office waive copays, deductables and give extra discounts to the patient under the non contracted insurance? We were told by a practice management firm that The fees had to be the same accross the board for everyone. (with or without insurance) So the office couldnt have the “office fees” that are billed to the insurance companies and the “no insurance discounted fees” that are billed to those who do not have insurance. That it did not matter if we were contracted or non contracted, Extra discounts and waivers to patients would be non compliant.
    Could you clarify?

    Thanks,

    S

  23. Mary Pat Whaley February 26, 2013

    Hi Sindy,

    It is correct that everyone must be charged the same fee, however, you may discount your fees to uninsured cash patients to reflect the fact that you do not have the labor and overhead associated with filing insurance, AND you may also discount your fees below Medicare rates for documented financial need.

    So, let’s look at an example. All patients in your practice are charged the same base rate for a service, let’s say $75 and let’s suppose Medicare pays you $30 for the service.

    A payer with whom you are contracted may allow $50 for the service (of which the patient pays a $25 co-pay and payer pays $25 and you write off $25.)

    A payer with whom you are not contracted will be charged the same $75 and may pay their portion and may decline to pay the full amount stating that it is not “usual and customary” for the service in your area. Because you are not contracted with them, the patient pays any amount that the payer does not. I am not sure why you would waive anything for a patient with a non-contracted payer. If any of your patients cannot afford to pay their portion of the service, you can extend them a payment plan option.

    An uninsured patient will be charged $75, but may be given an uninsured discount and a prompt pay discount and pay $40.

    An uninsured patient who completed financial paperwork showing that he needs financial assistance to pay his medical bills may be given a discount and pay $25. In this case, it is allowable for him to pay less than Medicare pays for the same service.

    Best wishes,

    Mary Pat

  24. Sarah February 27, 2013

    Same question as the previous posrt-the reason to waive the fees for a non contracted payer is that our fees are higher than what most insurance payers consider usual and customary (sicne they are still stuck in 1995). Then patients come and complain about why they have to pay for services if the insurance pays X%. In the past discount or write off of a portion of the fees are applied. Despite wanting to bill the insurnace payers for the full amount of fees, it seems impossible- even if payment plan options are given. ( the only resort was to sign up with these insurance ppo plans) Can these discounts be given? Or discounts for employees and family? We usually disclose discounts to the insurance, contracted and non contracted, except for when applied AFTER services rendered. And do the rules apply if the office does not take medicare? What was your response for Jeff (previous post)

  25. Mary Pat Whaley February 27, 2013

    Hi Sarah,

    If you do not have a contract with a payer, then you are not bound by any contract agreements. The exception to this is Medicare Replacement Plans that are Private Fee For Service (PFFS) plans. By seeing the patient under these plans, your acceptance of the patient means you will abide by their/Medicare’s rules.

    I would advise you to take a careful look at developing a policy for writing off any balances for patients with non-contracted insurances and do it fairly and uniformly. If you just write something off because a patient complains and don’t write it off for any patienst who don’t complain, you might be setting yourself up for a problem.

    In the situation where a patient complains about having to pay a bill because they have a complaint about their care, or the wait time, or something else, a practice is justified in considering taking a write-off. However, if the complaint is “I don’t want to pay what my insurance plan doesn’t”, what is the basis for the write-off? A good policy would be to say that you will always write-off all monies not paid for charges above “usual and customary.” That is treating all patients with non-contracted insurance plans uniformly and fairly. But if your policy is that you will always write-off all monies not paid for charges above “usual and customary” only IF the patient complains, then your policy is flawed.

    Don’t forget that that word will get around that you do write off monies denied for charges above usual and customary! Patients talk and patients will demand the same discount you gave their neighbor or hairdresser or friend.

    Yes, you can definitely have a discount program for employees and employee families.

    Best wishes,

    Mary Pat

  26. Dawn March 8, 2013

    For small balance write-offs (say $5.00) less than the amount estimated to send a bill (say $12.00), is this legal in the state of Calif, to automatically do a small balance write-off, or is some collection effort mandatory and does it matter what type? Do you have any legal references?

    Thank you, Dawn

  27. Mary Pat Whaley March 10, 2013

    Hi Dawn,

    It is my understanding that there is no prohibition in any state of writing off a small balance, however, readers should jump in and tell me if they have any additional information.

    We advise our clients to write the balance off, but flag the account so that balance can be collected if the patient returns. Depending on your specialty, this is appropriate so patients who return regularly do not believe they do not have to pay small balances. Our practices who use the credit card on file program do not have to write off any small balances as they use the patient’s credit card on file to pay the small balance.

    Best wishes,

    Mary Pat

  28. Jeremy March 25, 2013

    If I bill say Medicare $1000.00 and their allowable is only $800.00. Can I write off the $200.00 difference if we are contracted with Medicare. My CPA says yes, but if this were the case I could increase my Billable amount and never have to pay taxes because my write offs would be so large. And for insurances that we are not contracted with, is there any difference there? Thanks

  29. Mary Pat Whaley March 25, 2013

    Hi Jeremy,

    Medical practices typically use a cash accounting method which does not account for write-offs in any way. Revenue is accounted for when received, and expenses are accounted for when paid. There is no accrual or write-off for bad debt, and write-offs do not affect your taxes in any way.

    Keeping that in mind, it does not matter where you set your fees for contracted payers such as Medicare; the only thing that matters is what fees/allowables you have agreed to accept. That is why I call physician practice fee schedules “Funny Money.”

    Best wishes,

    Mary Pat

  30. Missy June 25, 2013

    Hi! I was curious about small credit balance write-offs, I have a multitude of credit balances $5.00 and under, can we write these off?

    Thanks

  31. Mary Pat Whaley July 6, 2013

    Hi Missy,

    You need to check your state law and see if you are required to refund small credit balances.

    If your practice is primary care or the type of practice where the patients come back regularly, you should be able to apply the credit balance to a future service. If you prefer, to keep your A/R cleaner, you can write-off the credit balance to a penny and when the patient returns, adjust the credit balance back on and apply it.

    If your practice does not see patients regularly, you may want to refund the amount. This is why I really love the credit card on file program – it is very easy to refund any overpayment via the patient’s credit card. If you do not want to go through the process of writing a refund check, you can all the patient and ask them for their credit card to refund the amount.

    Unless you let patients know that you will not refund anything under $5.00, I suggest you should always refund it. Many people are really struggling these days, and $5.00 might really make a difference to a patient.

    Best wishes,

    Mary Pat

  32. Alyssa July 11, 2013

    I have a couple claims that I have been fighting to get paid for almost 2 years and have just been going in circles with the insurance company. We are going to write them off to Timely Filing now since it is costing more in time to continue reworking them. The patients have paid their copays. Do we need to refund the patient their copays? These claims would have gotten paid had the insurance company processed them correctly the first time around.

  33. Mary Pat Whaley July 12, 2013

    Hi Alyssa,

    This is an interesting question!

    If you elect not to continue to try to get the claim paid due to time spent, and the claim not being paid is the fault of the payer, I believe you are justified in keeping the co-pay. However, if the patient got an EOB from the payer saying that they did not owe the co-pay, I can see where they would expect the co-pay to be refunded. I think it comes down to a risk management question – is not refunding the copay(s) going to cause a bigger customer service problem, maybe you should make the refund.

    Best wishes,

    Mary Pat

  34. Elizabeth August 7, 2013

    Hi, I was wanting to find more information regarding write-offs and discounts due to patient complaints. I would like to have a policy in place to stay compliant and also be able to give our customer service department a little guidance on when to offer a write-off to keep patient happy. Thanks

  35. Mary Pat Whaley August 13, 2013

    Hi Elizabeth,

    This is a tricky question because a practice isn’t really able to have a “policy” for this type of thing. What it comes down to is understanding what the patient wants and working through the situation. I teach managers to listen carefully to the patient, apologize for the problem, investigate the complaint, and let the patient know what you found out, usually apologizing again. If the patient is not satisfied with the apology (and I have to tell you that most will be satisfied at this point), then it is time to find out what would resolve the situation for them, for instance “Mrs. Jones, what would help you to feel that we have addressed this problem for you?” Once the patient says they want money refunded, I suggest you have the customer service person come to the manager for an approval, as opposed to being able to refund money at that level. If the manager approves, then the transaction can take place.

    If word gets around that you will easily refund money to anyone who complains, you will have patients test you on this.

    I would rather give patients a gift card to thank them for their patience in dealing with a problem, then actually refund any money – it makes accounting so much cleaner.

    It the situation is more than a relatively simple customer service problem and it an issue of dissatisfaction with care, then you are dealing with something altogether different and you will need to get the care provider involved.

    I know this answer is probably not what you were looking for, but I hope it helps.

    Best wishes,

    Mary Pat

  36. Tammie August 22, 2013

    Hello Pat, I have just started at a small chiropractors office which the accounting was not managed well AT ALL!!!!!!!! I have claims written off w.o any documentation and claims never filed in 18+ months but copays or adjustment fees were collected at visit but remaining balances are high. Most patients have never received statement some I have found is in the thousands since 09 and 10 and 2011. What is the proper way to clean this up with out breaking any rules and regulation? Can I do write offs of bad debt if physician does not want the patients billed for obviously our billing errors? Please help!!!

  37. Mary Pat Whaley August 26, 2013

    Hi Tammie,

    I would first separate the accounts with claims that can still be filed from those that can’t. Every payer is different, so check with each one to see what their timely filing limit is. Also, if any claims were filed and denied, there is an additional filing limit for resubmitting or appealing a denial. Anything that is past its timely filing limit should be written off.

    You can definitely write off balances when patients were never told that they have a balance. Balances that were created because of an error or problem on the part of the practice and balances that are from previous years should be written off. I would decide with the doctor what age of patient balances should be pursued (maybe only balances from 2013) and of course start fresh educating patients what their financial responsibilities are going forward.

    It will be painful to see all that money being written off, but hopefully you will get them on the right road.

    Best wishes,

    Mary Pat

  38. sharon September 13, 2013

    can you charge 4800.00 Write off 4800.00 then file for ins or charge 4800.00 file ins and then write off bal example:4800.00-1000.00ins write off 3800.00 not in network with any ins

  39. Mary Pat Whaley September 18, 2013

    Hi Sharon,

    If you are out-of-network with a payer (you have no contract with the insurance company), then you may handle the balance in whatever way you wish. You may file the insurance for the full retail rate, then accept what they pay (they’ll typically send the check to the patient) and write off the balance.

    Many practices will file for the full amount, but will hold the patient to the same terms as if you were in-network for their portion.

    Here’s an example: The service costs $4,800. The insurance company would have allowed an in-network provider $3,000. The patient would have had to pay an $600 (20% of the allowable of $3,000) and the insurance company would have paid you $2,400. You can accept what the insurance company paid the patient and write off the balance, or agree to take what the insurance company paid and have the patient pay the difference between the payment and $3,000, writing the rest off. If the insurance pays $3,000 or more, the patient could owe you nothing.

    Here’s the same example with different circumstances: The service costs $4,800. The insurance company would have allowed an in-network provider $3,000. The patient would have had to pay an $600 (20% of the allowable of $3,000) and the insurance company would have paid you $2,400. Unfortunately, the patient had a $2,000 deductible, so the insurance company only paid the patient $400. You can accept what the insurance company paid the patient and write off the balance, or agree to take what the insurance company paid and have the patient pay the difference between the payment and $3,000, writing the rest off. In this case the patient owes you the $400 paid by the company, as well as $2,600 that they would have paid if in network.

    You do have to be careful setting up these arrangements because it is not always crystal clear what the insurance company is going to pay the out-of-network provider. You must avoid saying “We’ll accept whatever the insurance company pays you,” because that may be zero!

    I hope this answers your question.

    Best wishes,

    Mary Pat

  40. Montana September 28, 2013

    Mary Pat,

    Currently we are out of network with United Healthcare, my question is once the claim has been filed with the insurance (the allowable amount is applied to the patient deductible for around $160) Can we adjust off $60 and bill the patient just $100 or is this considered insurance fraud, since the patient has the $60 already credited to their deductible?

    Thanks,

    Montana

  41. Mary Pat Whaley October 1, 2013

    Hi Montana,

    If you are out-of-network with UHC, you do not have to adhere to any specific rules. You may charge the patient whatever you want and it is not considered fraud. As long as you are not charging UHC more than you are charging any other payer to take advantage of the fact that you are out of network, you are fine.

    Best wishes,

    Mary Pat

  42. Carol R October 20, 2013

    My question is about dual Insurances.
    If the patient has dual coverage, and the provider is in network for both plans, after they both pay on the claim, do you have to consider the lowest allowable amount from both plans or do you make any adjustment required based only on the primary’s allowable amount ? Dual insurances are confusing to me. Thank you for any advise you can offer me.

  43. Mary Pat Whaley October 22, 2013

    Hi Carol,

    Coordination of Benefit (COB) rules are designed to ensure that when two separate payers cover a particular service, no more than 100 percent of the costs of that service are to be reimbursed to the subscriber or to the medical practice if the practice receives direct payment from the payers. The primary payer will pay its full, normal benefits. The other plan will pay what is remaining of the total medical bill, up to the maximum amount it would have paid if it were the only insurance company involved.

    Different plans work in different ways – there is not a standard, straightforward set of rules that all payers follow as far as allowables. It depends on the contract you signed with each of the payers that you are in network with. Check the COB rules for each of these payers to see what their rules are. Here’s some good information on COB from the AMA: http://www.ama-assn.org/resources/doc/psa/ib6-coordination-of-benefits.pdf

    Best wishes,

    Mary Pat

  44. Kathy December 23, 2013

    Pat,
    When I am not contracted with a payer, can I write off the difference between the amount allowed and the amount billed, as long as it is not less than the Medicare allowable, and only charge the patient their copay, and or deductible.
    We were looking at doing this for all of our patients, or do we have to do a financial application on each patient. Just want to make sure that we are doing this correct.

  45. Mary Pat Whaley December 30, 2013

    Hi Kathy,

    You are correct. When you are not contracted with an insurance, you may charge a patient any amount you wish. You can set this as a policy for all patients and you will not need any kind of financial application.

    Best wishes,

    Mary Pat

  46. Mary January 2, 2014

    Hi Mary,

    I was wondering what you would do when a patient has complained about a service rendered 9 months after the date of service. We have already sent this account to collections but after research we are going to adjust the patients balance. I am not sure if we are suppose to write it off or file a corrected claim? Thank you for any advise you can offer me.

  47. Mary Pat Whaley January 4, 2014

    Hi Mary,

    I would write it off.

    You do not need to submit a corrected claim since you did not tell the patient before the service that you would write it off.

    The only time you need to submit a corrected claim is when you have a contract with the payer and agree to write off what insurance does not pay in advance of the service, and the write-off is not due to documented financial need. You may, however, have a policy for employees (and their families if you want), where you will not collect what insurance does not pay, and this is permissable.

    Best wishes,

    Mary Pat

  48. NIcole March 31, 2014

    Mary,

    If you are 100% Fee for Service but do file for patients for assignment of benefits as a courtesy and receive payment for restorative work are you required to collect their co payment ? Can you legally write off the balance not paid by the insurance company?

    If we also provide a discount for health care providers and at times may write off an entire fee for the procedure is that ok as a professional courtesy? Or could we file insurance and then write off the balance they do not pay?

    Thank you.

  49. Mary Pat Whaley April 12, 2014

    Hi Nicole,

    If you do not have a contract with an insurance plan, you may collect whatever you want to collect, and likewise, write-off whatever you want to write off.

    Best wishes,

    Mary Pat

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