Patient Ledger

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Money Transfers and Refunds

Summary

This guide covers:

  • transferring money from one claim to another;
  • transferring money between claims with a different provider and/or location;
  • refunding money;
  • handling 'take backs' and payroll;

In a practice that uses a percentage of Payments as a basis to pay providers, additional consideration must be given to handling Refunds and Transfers of Payments between Providers.

Refunds
When payment is received and applied to a claim, the provider for the claim is immediately eligible to be paid a percentage of that amount.

A refund of that payment can occur only in one of two scenarios; 1) The provider has not yet been paid. 2) The provider has already been paid.

In scenario (1) the refunded money never gets paid to the provider. In scenario (2) the original money is paid to the provider and thus on the next payroll a negative amount will be applied to the providers payroll as a ‘take back’ to cover the refunded money.

Refunds should be posted using a specific Pay Code marked a refund.

Transfers
Generally speaking, handling transfer from claim to claim should always be done using a negative payment on the original claim and a positive payment on the claim that receives the money.

There is an important exception to this rule when paying providers based on Payments.

Scenario 1)
Manually transferring a payment between two claims for the same provider. Use a Pay Code that is exclusively used for this purpose. Post a negative payment on the original claim and then post a positive payment on the destination claim. Note the entry date and batch date for these two payments should be the same. This will cause both payments to appear, and offset each other, on the Reconciliation Daysheet and other reports. Errors in this process can be detected by seeing a non-zero amount for the unique Pay Code used for transfer on the Reconciliation Daysheet.

Scenario 2)
Manually transferring a payment between two claims for different providers. In this case, money is being taken from one provider and given to another. The original provider’s payroll shows a ‘take back’. In the same way they would a refunded amount. The destination provider shows a new payment.

Scenario 3)
Using pre-payment apply where the provider and location of the pre-payment and destination claim are the same. The mechanism uses the original entry date to avoid confusing Patient Statement.

Example:
Prepayment on 01/01/2017 of $50 is transferred to a claim on 02/01/2017. The system creates two payment, both with date of 01/01/2017 – negative on the transfer, positive on the destination. This mechanism avoid creation of what could be considered ‘new money’ on the date of transfer by leaving the money on the original date and simply moving it to a different claim. From a payroll perspective, the provider has already been paid no additional transfers need to show.

Providers get paid for unapplied as it comes in, not as it is transferred to a claim.

Scenario 4)
Using pre-payment apply where the provider and/or location of the pre-payment and destination are different. In this care a true transfer occurs where money is being taken from one entity to another. The pre-payment system will create two payments for the current date – negative on the original and positive on the destination. This shows on the Reconciliation Daysheet and other reports as money being moved today. It is the equivalent of a refund and a new payment, however both payments are marked as transfer. Now they are marked as transfer, for reconciliation purposes they can be displayed as transferred outside of the regular payment buckets allowing for balancing of cash independent of money transferred. In addition, the payroll report will show these payments in the current period. A “take back” occurs when money is moved from one provider to another.

Scenario 5)
The exception to the rule – when to use a Credit instead of a Payment to transfer between claims. In the event a “take back” is not possible, such as when a provider leaves the practice, the transfer needs to take place with a credit instead of a payment. As money has already been paid to the original provider, we use a credit in the system to balance the patients account and offset the original payment. To do this, use a unique credit type Pay Code just for this purpose. Both credits should have the same entry/batch date, and use the date of posting. A negative credit should be posted to the original claim and a positive credit should be posted to the destination claim. Reconciling these credits becomes as simple as making sure there is a zero (0) total for this pay code on the Reconciliation Daysheet. The payroll will now no longer attempt to take back from the original provider as the transfer was completed using a credit instead of a payment.

Posting Rules
1) Refunds are Payments using this Pay Code: 1. Payment Posted is Negative 2) Transfer from these providers (Unapplied or Non-unapplied): 1. .. list providers 2. Use Pay Code Credit Transfer : 3. Post negative credit to ‘from’ claim 4. Post positive credit to ‘to’ claim 3) Transfer between claims from all other providers: (Non-unapplied) 1. Use Pay Code Payment Transfer : 2. Post negative payment to ‘from’ claim. 3. Post positive payment to ‘to’ claim. 4) Transfer between claims (Unapplied) 1. Use Pre-Payment Apply function on Ledger.