Writing off money your practice should be collecting can be a tremendous problem if your office isn’t doing it correctly.
Administrative Write-offs – No Approval Required
There are legitimate reasons to write things off. These are some routine write-offs that occur frequently enough that your billing staff or billing company does not need permission on a case-by-case basis. Simply determine the criteria and let the billing team make these decisions.
Contractual. The difference between what you charge and what you receive from the insurance company is a routine contractual write-off.
Small Balances. It is expensive to send statements and follow up, so designate a dollar amount where all balances below that are written off. I see some practices do this with balances under $20 and some with balances under $15. Pick a number and go with it.
Self-Pay Patients. Patients without coverage may receive a cash discount from your office for paying at the time of the visit. Determine the prices and make sure your front desk collects this discounted rate as the patient leaves the office.
Unnecessary Write-offs – Approval Required
Any time you are writing off an office visit, approval should be required from the office manager, without exception. This may help identify problems in your office or process that can be corrected to minimize write-offs in the future.
Here are some reasons for write-offs. Each scenario should be extremely rare.
Timely Filing. This is something that should never happen. Ever. Your billing staff needs to have good routines in place to ensure they meet the filing deadline. Sometimes a claim is rejected for this because the insurance company needs information from the patient and did not receive it. In that case, it is not a write-off – it is patient responsibility.
Patient Service Concern. Sometimes an office manager may feel that a patient did not get good information and should not be responsible for the visit. This may include telling a patient that the office accepts their insurance when they do not or if the patient has a particularly terrible customer service interaction at the office.
Co-pays. Check your insurance contracts because this is not something you are allowed to write off. You may have instances of professional courtesy where you have determined that for a particular patient you will not collect a copay. This needs to be approved by the office manager, noted in the patient chart and must be the exception to most patients in your practice.
Bad Debt. Sometimes a patient simply won’t pay their bills. Each office needs to have a process for collecting from patients. If the office has gone through the process and they have not received payment, it is time to write this debt off. It will be up to your office policy to determine if you write it off to a collection agency or write it off in total. Just make sure you have a way to note this write-off so if the patient wants to come back to the office, they either need to pay it or have arrangements in place before being seen.