Category: Accounting

Selecting the Best Payroll Calculation Method for Your Organization

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Many organizations pay their providers based on production. SOS G5 includes calculation of production-based payroll using either of the following approaches:

  • Net Fees (total fees charged, less adjustments).
    Example: Provider renders a service with a fee of $100, but the fee is reduced by patient discounts and/or insurance contract amounting to $30. The payroll calculation will be based on $70. The amount paid has no effect on the payroll calculation when you use the Net Fees calculation method.
  • Payments applied to services rendered by the provider.
    Example: Provider renders a service with a fee of $100. At the time of the payroll calculation, a total of $50 has been received and applied to this service. The payroll calculation will be based on $50. Later payments against this service will be included in future payroll calculations. If another $30 is received before the next payroll run, that $30 will be included in the next payroll calculation.Note that only APPLIED payments are included in payroll calculations. If a payment has been received, but has not yet been applied to a specific service, it will NOT be included in the calculation! If it is later applied, it will be included in the next payroll.

Typically, the total of the net fees or the total of the payments will be multiplied by the Payroll Multiplier specified for the Provider Billing Profile on each service entry.  If a multiplier is not specified on the Provider Billing Profile, then the default Payroll Multiplier on the main Provider screen is used.

Using the Net Fees method example above, this provider would receive $42 ($70 multiplied by 60%).

Using the Payments method example above, this provider would receive $30 ($50 multiplied by 60%) in the first payroll, and another $18 ($30 multiplied by 60%) in the second payroll.

See also:
Running Provider Payroll

Printing a Deposit Reconciliation Report

Posted on | by SOS Blog | 1 Comment on Printing a Deposit Reconciliation Report

SOS recommends that you reconcile your actual cash and checks with the receipts entered in the system prior to creating your bank deposit slip and making your deposit. Doing so is a simple matter. The system keeps a running list of your payment vouchers as you enter them, whether or not they are actually applied to outstanding patient account balances. View them by navigating to Billing > Deposit.

Notice that the Deposit list shows only physical payments (cash and checks) that you would include on a bank deposit slip.

  • First, keep in mind that the Deposit screen is a list like most others in SOS, so you can easily filter the list by specifying values in one or more columns at the top of the list. For example, you can specify a particular Payer name at the top of the Payer column, a particular date or date range at the top of the Date column, or a particular payment type at the top of the Type column. Doing so will immediately hide all rows that do not match your filter conditions. You can then selectively highlight the desired payments using the following techniques.
  • If you want to print or post everything in the Deposit list, use the Tag All button (third button of the four shown in the image above).
    If you want to print or post a group of consecutive payments, click the first one to highlight that one, then hold down the <SHIFT> key and click the last one in the group to highlight everything in between.
    If you want to print or post more than half of the payments, first highlight the whole list using the Tag All icon, then hold down the <CTRL> key and click each of the rows you want to un-tag.
    If you want to print or post less than half the list, you can reverse the above technique. Start by using the Un-tag All button (button four) then hold down the <CTRL> key and click the payments you want to tag.

Preview and print the Deposit

Once you have the desired payments tagged, SOS suggests that you preview and optionally print a hard copy or generate a PDF of the Deposit before posting. Click the Print Deposit button (the second of the Deposit buttons on the toolbar).

(Replace with Screenshot)

Posting the Deposit

Once you have checked over your Deposit preview and printed a hard copy or saved a copy as a PDF to a secure location (remember that this report may contain HIPAA protected data), you are ready to post the Deposit, archiving the tagged payments and removing them from the list. You might even want to wait until you have confirmation that the bank deposit has actually been made.

To post, simply click the Post Deposit button on the toolbar. The tagged rows will disappear from the Deposit list. They then can be viewed and modified if necessary from the individual patient ledgers.



Handling Larger than Expected Payments: The Auto-Transfer Feature

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Imagine that you have a charge entry for patient account Jeff Dunn, and the fee of $75 has been allocated entirely to the patient. That is, the payers on the account are Jeff and Aetna insurance, but the splits show $75 as Jeff’s responsibility, and $0 as the Aetna responsibility.  The service rendered is insurance billable and a claim has been submitted.

Happily, a couple of weeks later, a $65 payment for this service is received from Aetna and you proceed to enter the payment and apply it to this service. Remember that the Aetna charge split was zero, so when we apply Aetna’s $65, we see that it will result in a negative balance of $65 for the Aetna split, which is not permitted. (An amount in parentheses is negative.) In spite of the apparent violation, SOS allows you to apply the payment and save the Credit entry.

If we go back to the original charge, we see that SOS automatically changed the original splits, moving $65 from Jeff’s chargesplit to Aetna’s chargesplit, and applied the payment to the new Aetna chargesplit balance after adjusting the payers’ responsibilities. As a result, there is no longer a negative balance for Aetna! This result represents SOS G5’s Auto-Transfer capability, and you are welcome to use it routinely, if you wish. You could, for example, configure every patient’s primary non-insurance payer as 100% responsible for all fees, and just let SOS do automatic transfers to move responsibility to insurance when insurance payments arrive, as with our example above. Be mindful, however, that the patient will receive bills for the full fee up until insurance payments arrive. Once insurance payments are applied, the patient responsibility will automatically diminish, even if no patient payment has been made.

There are certain conditions in which Auto-Transfer will not be able to help. For example, you cannot apply a payment that exceeds the entire fee of a charge entry, nor can Auto-Transfer make it possible to apply a payment if there is not enough transferable responsibility to increase the current payer’s responsibility to match the incoming payment. Transferable responsibility includes:

  1. Any remaining payer balance (chargesplit balance) on the charge.
  2. Any previous payments by other non-insurance payers.
  3. Any non-system adjustments applied to other payers.

Auto-Transfer will convert responsibility from other payers in the order shown above. For example, if other payers have remaining charge split balances, Auto-Transfer will first move those balances to the payer from whom we are processing the new payment. If Auto-Transfer still doesn’t have enough responsiblity to match the payment, it will next un-apply other non-insurance payers’ payments, and finally reduce other payers’ non-system adjustments if necessary. If none of these actions match the needed responsibility, Auto-Transfer fails and you won’t be able to save the credit. If feasible, you can try again, applying a lower payment. Ultimately, it may be necessary to cancel the credit entry, go back to the patient’s ledger, and manually manipulate the charge’s splits and previous credits until you have enough responsibility on the right payer to allow you to apply the new payment.

Note that system adjustments are NOT considered transferable responsibility. System adjustments include adjustments resulting from Insurance Plan Exception settings (Insurance Carriers > Insurance Plans tab > Plan details screen > Plan Exceptions tab) and from Patient Discount and Sliding Scale settings (Patient details screen > Care Episodes tab > Care Episodes detail screen –  Service Discounts panel).

 

 

 

How SOS Calculates Charge Splits

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Once you have selected a patient in the top of the Charge form, SOS will create a Charge Split for all available payers linked to the current patient. Charge Splits are created for all non-insurance payers as well as for any of the patient’s insurance policies that are active on the date of service that you specified.

Expected Charge Split does not appear

If an expected policy does not appear among the created charge splits, there are several likely reasons:

  • The date of service is after the date specified in the policy Coverage Ends field.
  • The date of service is before the date specified in the policy Coverage Begins field.
  • There is an Carrier Plan Exception for the current service, and the option which the option “Never bill this insurance .
Check the Coverage Begins and Coverage Ends dates.
Check for a relevant Plan Exception with the Do Not Bill This Service option checked.

If you make any changes on a payer screen to correct a missing split, be sure to fully save the changed Payer, Policy, or Carrier Plan Exception, then return to the charge and click the Recalculate Splits button in the toolbar above the Charge entry form.

Recalculate Splits button

Settings you should check if calculated split amounts are unexpected

Automatic Charge split calculations are based on your configuration of the following:

  • Carrier Plan Exception
    • Where: Common Lookups > Services. Open Service used in your Charge entry. Select Carrier Plan Exceptions tab in lower part of the Service screen. Double-click the insurance plan for patient’s primary coverage. (If not found, go on to Managed Care Authorization section.)
    • Setting:
    • Remarks: An Exception is used ONLY if the service is the one selected in the Charge and the insurance plan matches the patient’s primary insurance policy, and the Provider Type is blank or matches the provider type of the rendering provider in the Charge. If all those match, the setting indicated by the arrow in the figure above determines how SOS will continue with the calculation. If there is no matching Exception, the copay will be determined by other settings below.
  • Managed Care Authorization
    • Where: Patients > Patients – Billing OR Patients – All Data. Highlight desired Patient. Select Patient Insurance Policies from the Patient Lists shortcut in the top toolbar.

      Open the primary insurance policy. Click the Managed Care Auths tab. On the Auths list, find the active Auth that would be relevant for the service and provider on your Charge entry. Double click to see the details. If there is no relevant Managed Care Auth, then copay will be determined by other settings below.
    • Setting: The amount of the copay will be based on the Auth Copays entries at the bottom of the MC Auth screen.
    • Remarks: There can be different authorization amounts or percentages based on the visit number of the current Charge entry.
  • Insurance Policies
    • Where: Patients > Patients – Billing OR Patients – All Data. Highlight desired Patient. Select Patient Insurance Policies from the Patient Lists shortcut in the top toolbar.

      Open the primary insurance policy.
    • Setting: You can set a co-insurance percentage, with optional max session charge, or a fixed copay amount.
    • Remarks: If neither Carrier Plan Exception or MC Auth settings are applicable, these policy settings will be used.
  • Non-insurance Payers
    • Where: Patients > Patients – Billing OR Patients – All Data. Highlight desired Patient. Select Patient Payers (or Non-insurance Payers) from the Patient Lists shortcut in the top toolbar.
    • Setting: Check to see if the values in the Percent Pays column are all zero.
    • Remarks: Normally the values in this column should total to 100 percent, and the amount of the copay will be split appropriately. SOS permits you to set them all to zero, but if you do, then regardless of all the other settings above, no copay amount will be allocated to the non-insurance payers and the entire fee will be the responsibility of the insurance payers.

How copayment amounts are calculated

Warning! The following is a close-up tour of the Copay Sausage Factory, and therefore not for the faint-of-heart. Proceed at your own risk.

The diagram below shows graphically how OM determines the copay (patient portion) amount during the entry of new charges.

Decision tree used to determine the copay amount for a Charge entry.
  1. SOS starts by checking to see if the selected patient has any insurance policies that are currently active. “Currently active” means that the service date for the Charge entry falls between the start and end dates of the policy. The active policy that appears highest in the patient’s policy list is considered the primary coverage. The next active policy is considered the secondary, and so on.
  2. If there is insurance coverage, SOS checks for a Carrier Plan Exception (on the Carrier Plan Exceptions tab of the Service Form) that matches the service, provider type, and patient’s primary insurance.
  3. If there is a relevant Carrier Plan Exception (one that matches the service, patient’s insurance coverage and the provider type of the Charge entry), see if the copay calculation method on the Exception is set to option “Policy MCAuth copay settings”. If the MCAuth calculation method is selected, and the MCAuth contains copay information, then that information will determine the copay amount. To see if there is an applicable authorization, SOS must check the MC Auth details on the patient’s insurance policy to determine authorization status, covered dates, number of visits already used, total fees already used, and the services and providers covered. If there is an authorization that meets all these criteria, then SOS checks to see if you have set any copay limits. If so, it will set the copay amount to the appropriate value, based on the number of sessions that have already been linked to this authorization.
  4. On the other hand, if the Carrier Plan Exception specifies the “Policy copay settings” calculation method, that method will be used instead, unless there is no insurance policy copay information. In that event, the copay will be the Max allowable fee minus the Plan pays amount on the Carrier Plan Exception window, if these amounts are specified.
  5. If there is no relevant Carrier Plan Exception, SOS will check for an applicable MCAuth, as described above, and use it if one is found.
  6. If there is no Exception and no MCAuth, then the copay settings in the primary insurance policy will be used to determine the copay amount.

In the event that there is more than one non-insurance payer, this calculated amount will be divided among the non-insurance payer charge splits in accordance with the responsibility percentages you set for the various non-insurance payers assigned to this patient.

Non-insurance payers and percent responsibility

Note: If the selected service does not have the Include on claims option checked, or there are no currently active insurance policies, then the entire fee will be charged to the patient or other non-insurance payer(s).

How to Record a Bounced Check

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If a check you deposited is returned to you (bounced), you will have to flag the original check as “returned”. This action will increase the payer’s balance to the level it would have been if the payment had never been made. Follow this procedure to be sure that:

  • Your financial records properly reflect the “un-payment”.
  • The patient records include the reason for the payment reversal.
  • The provider payroll reflects that the check was returned and therefore the payment was reversed.

This procedure is quite simple, actually.

  1. Find the payer in the appropriate Payer List and open the Detail view (Edit).
  2. Select the Check Vouchers tab.

  3. Notice the Return Check buttons that appear on the toolbar for this tab.

  4. You have a choice to just mark the check as returned by clicking the button on the left or you can click the button on the right if your organization charges a returned check fee. If you use the button on the right, a window will appear in which you can specify the appropriate service code, the amount of the fee, and the provider to which this fee should be linked. That provider will see the charge in his or her Provider Activity Report and Payroll. For this reason, some organizations use a special administrative “provider” to be used in these circumstances. In the following example, the organization uses a provider they created with the name “Office Office”.


    When you click OK here, SOS will create a charge entry in the current daysheet with the returned check fee.

  5. If you go back in the patient ledgers to any credits that had been paid with the returned check, you will find that the amounts of those credit entries and credit splits on those entries have been changed to zero. As a result, the patient’s balance will also have increased by the amount that has now been reversed.