Understanding Write-Offs In Medical Billing

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Understanding Write-Offs In Medical
Billing
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Understanding Write-Offs In Medical Billing
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. A write-off is an amount that cannot be
collected from the patient due to several issues.
Collecting accurate reimbursements from insurance
and patient is really important for any practice
for their financial suitability. Any practice
will try their best to collect accurate
reimbursements from patients and payers, but
still, why any practice has to provide a
write-off, some of the reasons are listed
below. Mandatory/Approved/ Necessary
Write-Offs These write-offs are provided as part
of your practices financial rules or as per the
terms of the contract. Contractual write-offs As
per your contract with the payer, every procedure
code is assigned a dollar amount called an
allowable fee. While submitting claims it doesnt
matter, how much you charge for the services, the
insurance carrier will pay only an allowable fee.
In such a case, you have mentioned the rest
amount as a contractual write-off.
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Understanding Write-Offs In Medical Billing
Charity write-off There are again related to your
practices overall philosophy. Some practice
mentions it as financial assistance towards
community or financial assistance program. You
need to be clear about what falls in the category
of charity so that your billing team can account
for them accurately without any confusion. Small
balance write-offs As the name suggests, small
balance write-offs are provided when the balance
is not much even to raise an invoice. If the
balance is 12 then, sending mailing invoices,
calling to remind them would be a lot of effort,
in such case provider write-offs such an amount.
Normally practices add that amount to patients
next visit and collect it at the office when they
visit the next time. Promotional write-offs To
encourage 100 payment at the time of visit, some
practices also offer promotional write-offs. In
the case of self-pay patients with no active
insurance coverage, such write-offs are provided
to reduce recovery efforts. Other
Write-offs Write-offs mentioned above are either
part of your financial philosophy or contractual
obligation towards the payer. While following
mentioned write-offs represent inefficiencies in
your medical billing operations. Such amounts
should have been collected but due to some
inefficiencies, your practice has to mark it as a
write-off and let go of the amount.
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Understanding Write-Offs In Medical Billing
Uncredentialed write-offs These are quite common
write-offs for any practice. Provide may not be
credentialed with payer so payer wont be paying
any amount. You have to let go of this amount as
the patient has active insurance coverage and due
to lack of credentialing, you have to write off
this amount. Most practices take insurance
details in advance and in the case of new payers,
they inform patients about non-coverage and
self-pay situations. Timely filling
write-offs Every payer has a deadline for
submitting charges, sometimes your billing team
misses some charges. Submitting a claim after the
timely filing limit will result in claim denial
and you have to write off this amount. 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. Admin
write-offs This write-off may be provided in case
of an unsatisfactory patient experience. These
write-offs are situational and are approved by
the practice manager or providers as per the
situation.
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Understanding Write-Offs In Medical Billing
Differentiating Between Write Off and
Adjustment Medical billers while posting the
payments gets confused between a write-off and
contractual adjustment. As discussed above, a
write-off refers to an amount deducted by the
provider from a medical bill and does not expect
to collect payment owned by patients or payers.
On the other hand, an adjustment or a contractual
adjustment is a discounted insurance rate or
allowable payment based on the contract with the
insurance company. For example, if the charge for
a procedure is 90 and the insurer pays 80, the
remaining 10 will be a contractual adjustment
from the final payment, provided the patient has
an active insurance plan. Write-offs are part of
medical billing but need to keep them under check
all the time. You need a well-structured
financial policy mentioning write-offs
situations. You cant do much about mandatory
write-offs but keep a constant check on other
write-offs. Make sure your other write-offs
should not exceed more than 5 percent of your
expected practice collections. Review your
write-off amounts on a quarterly basis and make
changes if required. Medisys Data Solutions is a
leading medical billing company providing
specialty-wise billing and coding services. We
can assist you in reducing your other write-offs
like uncredentialed and timely filling
write-offs. We assist you in every step of
providing credentialing and submit every claim
within the standard time limit. To know more
about our medical billing and coding services,
contact us info_at_medisysdata.com/ 302-261-9187
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