Medical Practice Accounting: Credit Policies, Billing Procedures and Making Collections

Topics: Money, Payment, Receipt Pages: 6 (1927 words) Published: July 4, 2011
Medical Practice Accounting:
Credit Policies, Billing Procedures and Making Collections

Darcy Sartor
MBC – Carrington College
Ms. Scott
May 2, 2011

Medical Practice Accounting:
Credit Policies, Billing Procedures and Making Collections

“About the time we can make the ends meet, somebody moves the ends.” Herbert Hoover

The main aim of any business is to earn profits and also to remain solvent, i.e., it should have enough resources to pay its employees, creditors and to carry on with the day-to-day activities of the business. The ultimate goal of any medical billing system is to bring the patients' account balances to zero as soon as possible after treatment has been rendered. It is important to set up a system designed to bill quickly and accurately while accomplishing this goal. This paper has been written on the basis that all patient information was received, entered and billed while following proper office protocol and the medical office is completely automated (paperless). In order to receive the highest percentage of payments back on the billing it is imperative to form and maintain a system and solid billing habits. When treatments are billed in a clear, professional manner the patients will be encouraged to promptly remit payment. Erratic and sloppy billing practices can cause patients to conclude that payments are unimportant. No matter what system is used it is easy to prevent a negative outcome if a sound credit policy and proper billing procedures are followed. Processing Payments

The act of processing payments is called “posting.” All payments received need to be credited against the patients account immediately. Once posted the system may show a balance due. This balance due is then billed to either the patient or a secondary insurance carrier, if there is one and is also known as balance billing (the act of billing another party for the remaining amount on a claim). Sartor 2

Insurance carriers will often be the first entity to make a payment on a claim and are usually received within 3 to 4 weeks after it was submitted. Once the claim has been processed, by the insurance carrier, they will send an EOB (Explanation of Benefits) with the check. The EOB lists the patients name, date of service, and the service performed. Also listed on the EOB is the amount allowed for the procedure, the percentage covered by insurance, and the amount paid. As you enter the payments make sure the procedure codes and dates match. If benefits are not assigned the EOB is sent to the patient with payment amount. If all or part of a claim is rejected by the insurance carrier, determine why prior to billing the patient. Many claims are rejected due to minor errors, fix these errors and resubmit. If rejected reason is not clear, you can find no errors or your disagree with the rejection call the claims adjuster and discuss the claim with him or her. If a mutual agreement is not formed, ask the adjuster what the appeals process is. The patient will need to be billed on legitimate rejections. You may receive a letter on some claims that they are “pending”, being held for further information. Complete the incomplete information and resubmit on a fresh form. Never correct and resubmit the corrected form. It is very important that you set a time lime in which to check on these claims. Following through/following-up is very important. If the patient is designated as the payee, the provider will not receive any contact from the insurance carrier, in these cases it is the biller's responsibility to collect the full amount due, for services rendered, from the patient. Patient payments are either received by mail or at the time of service. It is preferable to receive any payments prior to rendering services. Any payment received by the patient, in person, will need a patient receipt (a...

References: Pearson Prentice Hall (2007). Guide to Medical Coding and Billing, Second Edition, Chapter 7.
New Jersey: Pearson Education, Inc.
Schiff, M. (2005). Medical Billing Handbook, Chapter 7. New Jersey: Pearson Education, Inc.
Herbert Hoover, 31st President of the United States. Quote taken from:
Aastha Dogra, (1/6/2010). The Purpose of Accounting., Intelligent Life on the
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