Insurance & Bad Debt Write-off Entry
Providers have the choice of credentialing with insurance carriers. If the insurance carrier accepts their credentials and wants to sign them up under their payment benefits they put this doctor on their In Network Provider list.
When a doctor is In-Network it means the doctor will accept the Insurance Carrier Allowable Fee Schedule. No two insurance carriers have the same allowable fee schedule. Because the allowables aren’t the same the doctor will charge more than any one health insurance carrier to make sure they collect on the full Allowable amount for each procedure code.
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To identify what the Contractual Adjustment is you will take the Charge amount for the procedure code minus the Allowable amount. The balance remaining is the Contractual Adjustment amount.
Example: Procedure code 99214 is billed (charge) at $125.00. Aetna's allowed amount is $75.00. The doctors Contractual Adjustment (write-off) is $50.00. This amount can not be billed to the patient nor collected on. |
Bad Debt Write-offs and Small Balance write-offs can also be completed through the Write-Off screen. Bad Debts are those that the medical billing office cannot collect for certain reasons. Small Balance write-offs is usually a small balance under $5.00 that a patient owes but the doctor would rather write off than send another statement.
At times a medical office will also negotiate the remaining balance with a patient. When this happens they will usually write-off the non-collectable money by indicating it with a Write-Off code like negotiated, self pay write off or bad debt.
To learn more about Insurance & Bad Debt Write-off Entry please Watch our FREE Medical training video series.
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