Category: Billing

How to Move a Payment from One of a Payer’s Patients to Another

Posted on | by SOS Blog

Both insurance payers and non-insurance payers may be shared among two or more patient accounts. In fact, when it comes to insurance payers, that is the typical situation. The same large insurance payer, such as Medicare or United Healthcare, may well appear on the payer lists of many of your patients. Likewise, you might create a non-insurance payer for one of the parents in a family in which several family members, each with their own SOS account, are receiving treatment. Yet another example would be a forensic practice that receives payment from a law firm for several different client accounts.

When payments are received from one of these multi-patient payers, the payment can be attributed to one or more of the patient accounts that list that payer. There are several reasons why you might want to move a payment, or part of a payment, that was credited to one account to a different account:

  • There might have been a clerical error in which an amount was credited to the wrong account.
  • An insurance payer might issue a “take back”, in which an amount paid originally is reduced, and you are instructed to apply the difference to a service rendered to a different account.
  • A prepaid amount will not be needed on one account and the payer has requested that it be applied to a different account.

If you want to understand the procedure for moving payments from one patient account to another, you must first understand the difference between undistributed payments, unapplied payments, and applied payments. If you are fuzzy on the distinction, please review the article entitled What is the Difference Between Unapplied and Undistributed Payments? In general, moving the payment requires that you convert an applied or unapplied payment on the first patient’s credit back to an undistributed payment for the payer. Once the payment status is reverted to undistributed, it can be used as a credit for any other patient linked to the payer.  Remember that in each of these scenarios, it is essential that both patient accounts share the same payer.

If the amount to be moved is unapplied…

If the amount to be moved is available as an unapplied payment in a credit entry for Patient One, then:

  1. Open a Patient One credit that has an unapplied amount. That is, the credit amount is more than the total of what has been applied to charges in the credit splits.
  2. Confirm that the unapplied amount matches or is greater than the amount you want to move to Patient Two.
  3. Reduce the amount of the credit entry by the amount you want to move, but the new Credit Amount must be the same or more than the amount applied in the credit splits. If you make the credit amount too low, the Amount Unapplied will show a negative amount and you won’t be able to save the modified credit entry.
  4. Note the description of the voucher, for example, the check number of the payment.
  5. Save the credit. As the credit with its new, lower amount is saved, the unapplied payment amount on the Patient One credit will be reduced or eliminated and the undistributed amount of the payer’s voucher will increase by the same amount.
  6. Now create a new credit entry for Patient Two.
  7. Select the voucher noted in step 4 above as the payment source and adjust the amount of the credit as desired. It can be any amount up to the available undistributed amount available on the voucher.
  8. Apply the payment to Patient Two services or simply save the amount as an unapplied payment for Patient Two.

If the amount to be moved is already applied…

If the amount you want to move is more than the unapplied amount of the credit, or there isn’t any unapplied amount, then you must reduce the amounts of one or more credit splits you have already applied to services in order to proceed:

  1. Double-click one of the Credit Splits appearing in the list box at the bottom of the Credit Entry form. This list sits BELOW the Charge Splits list.
  2. Double-click a credit split you would like to reduce, change the amount, and save. Do the same for other credit splits if appropriate.
  3. As you save the change to each credit split and return to the Credit window, you will notice that the Amount Unapplied will increase by the same amount.
  4. Now decrease the Credit Amount by that amount. When you save changes you have made to the credit, the payer’s payment voucher (in this example, the voucher for check number 54325432543) will reflect that the amount is now undistributed.
  5. You can now enter a new credit for Patient Two, selecting the payer’s check number 54325432543 as the payment source.

Managing Patient Insurance Payers (Policies)

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To add a new patient insurance policy, or to view the details of an existing policy:

  1. Find the desired patient in the Patient List.
  2. Double-click the row to open the Patient detail view.
  3. Click the Payers tab.
  4. If the Insurance Policies tab is not currently selected, click that tab to see the list.
  5. To add a new policy, you can do any of the following:
    • Press <CTRL><N> on the keyboard.
    • Click the first icon in the toolbar for this tab.
    • Right-click the list and select New from the pop-up menu.
  6. To view the details of an existing policy, just double-click the desired policy row in the list.

PatientPoliciesList.png

The Patient Insurance Policy detail view looks like this:

Policy DV.png

Notice that there are several tabs on this form:

  • Main has fields for the basics, such as the Insurance Plan, coverage dates, type of services being billed, type of policy, and over-rides for co-pay settings inherited from the policy’s Insurance Plan. On this tab you also can see current aging and balance data.
  • Managed Care Auths lists any authorizations. You can add new authorizations here, and view or edit the details of previously defined authorizations. For more information about Managed Care Authorizations see Adding and Changing Managed Care Authorizations.
  • Claim Form contains fields that are needed to submit a claim, ranging from the Insured’s ID Number (Subscriber Number) to “Accept Assignment”. These are fields that you will probably recognize immediately from the CMS 1500 form.
  • Patient Insurance Policy Attachments is a list of other documents associated with this policy. The most commonly attached document is a scanned copy of the patient’s insurance card, but there is no restriction or limit to the documents you can attach from this screen.
  • User Defined Fields
  • Change Log

See also: Understanding Insurance Carriers, Plans, and Policies

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).

 

 

 

Entering Advance Payments

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An advance payment is entered in SOS as an undistributed payment or as an unapplied payment. Either way, you record the payment in the system so that it will be available in the future when eligible service charges are created.

As an example, let’s say that you receive a referral for a forensic evaluation from an attorney agree on a retainer of $1.000 and make an appointment for the client’s evaluation on a date two weeks in the future. A few days go by and the attorney’s check for $1,000 arrives in the mail.

  1. If the attorney or law firm does not already exist in your payer list, the first step is to add it.
  2. Because the payment is meant to be used for a specific client, we should also create a patient account for that person, if we have not already done so.
  3. Add the payer created in step one as a non-insurance payer on the client’s account.
  4. Open a new payment transaction, selecting the client as the Patient.
  5. Select the appropriate attorney or law firm as the Payer.
  6. Select the Credit Type as Check and create and select the new check.
  7. At this point, no services have been rendered yet so there are no charges to which we can apply the payment. To save the unapplied $1,000 on this specific patient account, check the Keep unapplied amount on this credit box to the right of the Amount Unapplied field and save the credit entry. This $1,000 check payment is now available to be applied to any future charges on this specific account.

    On the other hand, if you save the credit without checking the Keep unapplied option, the credit payment amount will revert to zero, but the payer’s check will recorded as undistributed. That undistributed $1,000 will be available to apply to any patient account for which this payer is responsible. The effect is exactly the same as if you had followed the alternate procedure described just below.

Recording a payment for future use without entering a zero dollar credit

There is a more direct way to record an advance payment from a payer for future use on any of a payer’s accounts. Perhaps your organization receives an annual grant from a charitable foundation to provide mental health services for eligible needy patients of some sort. In that case we would just record the check or electronic transfer. To do so:

  1. Create a new non-insurance payer (Billing Lookups > Private Payers) or open the payer if it already exists.
  2. The payer’s detail form includes Voucher tabs for all types of payments. If the payment is a check, for example, you would select the payer’s Check Vouchers tab.
  3. Create a new voucher for the grant check.
  4. Save the voucher.
  5. When an eligible patient is identified, add the charity to the patient’s list of non-insurance payers and save the patient. You will now be able to select and pay future charges using the undistributed voucher you previously saved as a voucher (step 3) when it arrived.

See also:

Handling Deductibles and Insurance Denials

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Deductibles

It is, at best, difficult to predict whether a patient will have met their deductible by the time a claim is processed. For this reason, most providers assume that payment will be forthcoming from the insurance payer. For this reason, healthcare providers routinely assign payment responsibility and submit claims as if any relevant deductible has already been met. If it turns out that the deductible has not been met, the insurer’s EOB will reflect that status, denying payment and handing responsibility for payment to the next insurance payer, or back to the patient if there is no other insurance to bill.

Recording the Insurance Denial

In order to record the denial and transfer payment responsiblity, you would use a Credit entry as follows, taking information from the insurer’s EOB:

  1. Open a new Credit entry from the Daysheet list.
  2. Select the appropriate patient account and Payer.
  3. Choose “DEN: Denial” as the Credit Type, and an appropriate Denial Code such as “DED: Deductible not met”. (If an appropriately descriptive code is not already in the pick list, simply add one using the New button at the bottom of the lookup list.)
  4. Leave the Credit Amount as “$0.00”.
  5. Highlight the Charge entry that was denied and click the Apply Credit button.
  6. The Credit Split window will open, showing the zero amount in the Apply A Credit Amount panel. To transfer responsiblity to the next payer, enter the amount to be transferred in the Optional – Transfer all or remaining charge split balance panel. SOS automatically determines and displays the next payer, which will be the next available insurance payer or, if no other insurance payers, the non-insurance payer, in that order.