Correcting Misapplied Payments
Sometimes upon receiving a payment you will discover that money was improperly
applied to a service when received from another payor. To correct this
you may need to unapply the previous payment then reapply a portion of
that payment before applying the new payment.
An example:
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Service |
Total Fee Charged |
$100 |
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Patient Fee Charged |
$100 |
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Patient Fee Paid |
$60 |
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Patient Fee Due |
$40 |
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Insurance Fee Charged |
$0 |
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Insurance balance due |
$0 |
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Payment |
Patient Payment |
$60 |
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Applied to this service |
$60 |
Now you receive an insurance check for this service for $56 representing
80% of their $70 allowable. When you attempt to apply the insurance check
to this service, you notice that the responsibility had not been entered
properly and the patient payment had not been applied correctly.
Tthe patient has a $20 copayment so this is the what the Patient Fee
Charged should have been and only $20 of the $60 payment should have been
applied. The rest should have been applied to other services or left as
a prepayment to apply to future services. The balance on the service after
a $20 copayment should have been the responsibility of the insurance payer.
Since you didn't know how much the insurance would actually pay, no Contract
Write-off would be entered.
Here's how is should have looked after the patient payment:
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Service |
Total Fee Charged |
$100 |
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Patient Fee Charged |
$20 |
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Patient Fee Paid |
$20 |
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Patient Fee Due |
$0 |
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Insurance Fee Charged |
$80 |
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Insurance balance due |
$80 |
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Payment |
Patient Payment |
$60 |
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Applied to this service |
$20 |
There are several ways to make the corrections. Use the one that makes
the most sense to you.
Correcting via the Service
- Edit the service in question. On the Money tab, click on the Payments
button in the lower left corner of the window. This will take you to
a list of payments applied to this service. In this example it would
show the single $60 payment.
- Delete the payment. You cannot change the amount applied, you can
only remove it and reapply it later. Close the empty payments list.
- On the patient payer tab (the tabs sticking out toward the right),
change the fee charged to $20.
- Select the insurance tab. Click in the insurance fee charged field
using the right mouse button. This tells the program to recalculate
the amount charged. The value should change from zero to $80. If it
does not, type $80 in this field. Press the Ok button to save the service.
- The patient payment of $60 is now shown on the transactions list with
a $60 prepayment balance. Highlight this payment and click on the Apply
Prepayment button. This takes you to the Apply Payment list showing
services with open balances. Select the previous service then click
the Apply Payment to Charge button. This opens the Applying Payment
to Service screen with $20 in the "Change To" column for the
patient fee charged. Click Ok to apply the payment.
- Back at the Apply Payment list, you will see that $20 has been applied
and $40 remains. Click the Apply to Patient Prepayment button and accept
the amount of $40 to leave as a prepayment. Click Ok to close the prepayment
screen and Ok again to complete applying the payment.
Once this has been accomplished, you can apply the new insurance payment
normally.
Correcting via the Payment
This method may seem more logical to some people.
- Edit the $60 patient payment. Since this payment has been fully applied
to a service, its balance is zero and will be inactive. You may have
to click on the Show Inactives check box to see the payment on the list.
When you are in the payment screen you will see a list of services to
which this payment has been applied. In this example it would show the
single $60 application to the service.
- Delete the payment application. You cannot change the amount applied,
you can only remove it and reapply it later. Click Ok to save the change.
- Edit the original service and go to the Money tab. Finish by following
steps 4, 5, and 6 above.
When you now enter the insurance payment of $56, enter $24 for the contract
write-off to clear the balance on the service. |
