Medical Administrative Assistant: Module 6: Patient Accounts and Payment Processing

trial balance

(1) bookkeeping strategy to confirm accuracy in debits and credits in ledger (Ch 29); (2) a balance sheet reports the assets, liabilities, and stockholders' equity of a business enterprise at a specific date (Figure 33-9) (Ch 33).

e-statements

a paperless bank statement.

Credit

a payment subtracted from existing balance.

Payee

a person to whom money is paid.

deposit record

a record of a financial deposit that is given by the bank to the customer at the time of the deposit.

ledger

a record of all charges or services rendered, any payments made by the patient or the insurance carrier, and any adjustments, included with the specific dates of these entries.

bank statement

a record of an account sent to the account holder, usually on a monthly basis, showing the beginning balance, all deposits made, all checks drawn, all bank service charges and interest earned, and the closing balance.

deposit slip

a slip accompanying a bank deposit and containing an itemized list of checks or cash deposited, the date, and the depositor's signature.

A bookkeeper is one who records the financial transactions of a business, keeping a record of

accounts receivable A/R and accounts payable A/P

accounts receivable (A/R)

all the outstanding accounts (amounts due to the office); a reporting system to see who has not paid on his or her account.

Day sheet

form used for recording all daily financial transactions of charges made and payments received; also called a daily journal. All patient charges and receipts are recorded on the day sheet each day (primarily with manual bookkeeping systems).

When an entry is made on the manual daysheet, it is called:

journalizing.

payments

money paid by the patient or the insurance carrier.

When preparing a deposit slip you should:

stack in order from highest to lowest denomination.

endorser

signature on the back of the check of the payee.

The _____________method of bookkeeping records all increases and decreases in the assets of the practice.

single-entry

The two commonly used kinds of endorsement are blank endorsement and restrictive endorsement.

A blank endorsement is a signature only. It should not be used until the check is to be cashed because if it is stolen with such an endorsement, someone else could endorse the check below your name and cash it. A restrictive endorsement is used to endorse checks when they are received. It is a stamp or written information that states, "PAY TO THE ORDER OF (name of bank where check is to be deposited)" followed by the name of the provider. If such a check is stolen, it could not be used in any way.

Checks

A check is an order for a bank to pay money to the person or company named on the check from the account holder. There are many types of checks besides a personal check, and you should be familiar with them when dealing with practice finances, even though many are rare in the office setting: Cashier's check: The purchaser pays the bank the full amount of the check. The bank then writes a check on its own account payable to the party specified. This type of check guarantees the recipient that the full amount of money indicated on the check will be paid on processing (rare in the office setting). Certified check: The bank stamps the customer's own check certified and then holds the certified amount in reserve in the customer's account until the check is cashed. This is a guaranteed check and so is always acceptable when a personal check is not (rare in the office setting). Electronic check: A check paid directly from a checking account through the Internet. The account owner establishes a list of recurring payees, their corresponding account numbers, and the electronic or actual addresses. To pay a bill, the list is called up, the payee identified, the amount of payment entered, and the payment command given. The bank electronically completes the transaction within a day or two without the need for a paper check, envelope, or stamp (becoming more common practice for making payments). Limited check: A check that will be marked void if written over a certain amount. These checks are often used for payroll or for insurance payments. A check can also list a time limit by which it must be cashed. It must be cashed within the time limit, or it is not negotiable (rare in the office setting). Money order: Negotiable instrument often used by individuals who do not have checking accounts or to meet the requirement for purchasing an item or service. Money orders may be purchased for a fee from banks, credit unions, post offices, and many other money order service locations (rare in the office setting). Postdated check: A check made out with a future date. You might have patients who wish to pay while they are in the office but will not have the money in their account until next payday, which is the date they will put on the check. It is best practice never to accept a postdated check. The practice of writing a postdated check is illegal in some states; be sure you know the law in your state. Stale check: A check presented too long after it was written to be honored by the bank. Some checks specify that they must be cashed within 90 days, and if presented after that date, the bank will not honor payment. A period of six months is generally considered enough time for a check to be presented for payments. Do not accept a check with a stale date. Traveler's check: A special check used by individuals who are traveling and do not wish to carry a large amount of cash. Personal checks are often not accepted outside of the area of the bank on which they are drawn. Therefore, in exchange for cash, banks will issue traveler's checks. These must be signed individually at the time of purchase at the bank and again when they are used for payment on goods and services. They are usually considered the same as cash, but some merchants still require some identification before they accept a traveler's check. Lost traveler's checks can usually be replaced if you can produce a list of their serial numbers. Traveler's checks are listed as checks on a deposit slip (rare in the office setting). Voucher check: A check with a detachable voucher form that shows the reason for which the check was drawn. This kind of check is often used by insurance companies. The voucher form is removed before the check is endorsed and deposited. Cryptocurrency: As virtual banking evolves, so has currency as traditionally known. Cryptocurrency is a digital or virtual currency that uses cryptography for security, making it difficult to counterfeit. The first cryptocurrency was created by Bitcoin in 2009, a software-based online payment system (rare in the office setting).

Other Types of Deposits

A form of this method is known as an electronic fund transfer (EFT), which credits or debits accounts by computer without the involvement of checks or deposit slips. Payments from insurance companies are almost always made via EFT. Today's practice management software has the capability to send claims and receive payments electronically, streamlining the workflows and improving the efficiency of the revenue cycle and financial health of the practice. Another example includes offering employees the option of using direct deposit to receive their paychecks. The IRS also allows taxpayers to pay and receive refunds by EFT and direct deposit. Money can be transferred electronically by a wire transfer from the payer's account to another account overnight if the name and number of the receiving account and the name and identification number of the receiving bank are given. A fee is charged for the service, which varies by bank and location. Wire transfers are less common today with the enhanced electronic features available such as EFT. Although rare, checks may also be deposited by mail. You should avoid sending cash or currency by mail; however, if you must, send it by registered mail (which is quite costly). With the many features of electronic banking now available (including the mobile deposit feature), sending deposits through the mail should be rare and avoided whenever possible. To prepare for a deposit, you will complete a deposit slip. All checks should be endorsed by restrictive endorsement only. If no stamp is available, the handwritten notation "for deposit only to the account of (name of your employer)" or "to the account number" will suffice. Always obtain the receipt for deposit from the bank because this record is necessary to prove that a deposit was made in the event of a dispute or missing deposit. It is extremely important to have an accurate record of all checks deposited with the check number, whom the check is from, and the amount of the check so that you can follow up if necessary. If you must mail checks for deposit, it is a good idea to photocopy all checks. If checks become lost in the mail, it will be necessary to notify all payees to stop payment and issue you new checks.

professional discount

A professional discount is one that is authorized by the provider to discount fees to another medical professional, such as a nurse, medical assistant, another provider, or other health care providers.

Additional security features include:

A warning band in the border of the check indicating the document contains security features. The "MP" logo (MicroPrinting) in the signature line of laser checks and in the border on manual checks repeats the words "original document." A padlock icon inside the border that indicates at least two security features are included on the check. A security screen printed on the back of each check that reads "original document" with a list of the security features and will not photocopy clearly. Other "high security" features can include the following: Toner adhesion: Ensures that toner from your printer cannot be removed from the paper without damage. Chemical reactive paper: A uniquely treated paper that will show visible signs of chemical tampering. Prismatic multicolored background: Includes subtle gradations that makes copying and reproduction difficult. A secure document check face: makes replication difficult. Colored pantograph: If the unique colored background is not present, the check is not authentic. Foil hologram: A three-dimensional graphic foil embedded in the check to provide additional protection against duplication. Visible or invisible fibers: Visible fibers of various lengths and color complicate copying, and invisible fibers can be viewed from either side of the paper using black (UV) light. Thermochromic heat-sensitive icon: The ink cannot be applied by conventional photocopiers, ensuring authenticity of the document.

As outlined in the Medicare Desk Reference for Physicians (2005), the routine waiver of Medicare deductibles and copayments is unlawful for the following reason:

A: All of the above a. It results in excessive utilization of Medicare items and services. b. It results in false claims. c. It violates the anti-kickback statute.

Bookkeeping and Accounting Systems

An accounts receivable record should be kept daily. This record represents the total amount owed to the provider for services rendered. The total should be the same as the total of balances on all the active patient ledger records. The process of running such a total is called a trial balance. The accounts receivable balance is carried forward from month to month and added to the daily charges. The payments made by patients and any adjustments are subtracted to determine the true accounts receivable each day. Make sure you double-check your entries by proofreading for errors. Note that it is easy to transpose numbers as well as letters. The Batch feature in the EHR will streamline many of these workflows. Running a Journal to verify entries before posting will assist in identifying data entry errors.

Reconciling a Bank Statement

An important part of banking is the reconciliation each month of the bank statement with the office records. When a bank statement is received, you should verify that the amounts on the bank statement are consistent or compatible with the amounts contained in the office's check register. The statement will show all banking transactions concerning the account along with the checks the bank has received and processed. If bank statements are received in the mail as hard copies, reconciliation may be done with use of a standard form sent with the statement. If the office uses online banking, usually this electronic option offers a simple click to reconcile each check on the e-statement against checks as documented in the office check register. Look at the statement and put a check mark on each stub or register entry that matches a bank statement entry. A check stub or registry entry not checked indicates an outstanding check. The total of the outstanding checks is entered on the worksheet. Items withdrawn from the account by the bank for charges, automatic payments, purchases, and such that appear on the statement but are not in your checkbook must be totaled and entered on the appropriate line on the worksheet. Check the statement for deposits and compare the statement with your checkbook record. If you made a deposit since the statement was printed, it will not appear. Be certain an earlier deposit was not omitted from the statement. Finally, the account might have earned interest that you have not recorded in the checkbook. Enter that on the form. When you have all the amounts and do the math, the corrected checkbook amount should reconcile (be consistent with) the bank statement. With the convenience of online banking, some recurring expenses might be paid by electronic check. Unless a record is made in the traditional checkbook, there will be a difference in the balance. Be certain to check for these expenditures when you are reconciling the monthly statement. The statement will list the transaction as a bill pay and identify the payee. Other funds could be added or withdrawn by electronic transfer to and from other accounts or as automatic deposits or withdrawals.

Even with columns that easily identify the revenues and expenses, single-entry bookkeeping has disadvantages:

Asset and liability accounts (inventory, accounts receivable, or accounts payable) are not tracked. These must be tracked separately in another system. There is no direct linkage between income and the balance sheet. Undetected errors can occur and might be discovered only through bank statement reconciliation.

Communicating Fees to Patients

Assisting the patient in planning a reasonable payment schedule for these expenses helps the patient be more at ease and worry less about financial matters. The patient can concentrate on getting well. If the patient does not have current resources to pay the full amount in one payment, the medical assistant might offer the option of a fixed sum as a down payment and regular payments of a fixed amount on specified dates. Remember, this all depends on office policy. If a patient is unhappy about medical costs, it is important to listen and try to explain why the charges are as stated. Always demonstrate professionalism when discussing the patient's billing record and display sensitivity when requesting payment for services rendered. The provider should be told when a patient is unhappy with the cost of treatment. While it is best to advise the provider, do not place her in the middle of a financial discussion with the patient.

Disadvantages of Computerized Systems

Computer system problems: Power failure, computer viruses, and hackers are possible problems when using computerized systems. Garbage in, garbage out: After data has been entered in the system, the output is automatically obtained; hence, the data being entered must be validated for accuracy and completeness. Proper accounting system: The accounting program must be properly set up to meet the requirements of the business; poorly programmed or inappropriate software or hardware or personnel problems can cause more problems. Computer fraud: Proper levels of control and security, both internal and external, must be instituted to prevent dangerous instances of HIPAA violations.

Practice Management Software Systems

Computerized practice management (PM) software systems are most commonly used today in clinics and medical offices to record financial transactions. This software decreases errors and increases efficiency and speedy posting of procedures to patient accounts. It also enables minute-to-minute and up-to-date financial information related to patient accounts and procedures rendered. Electronic health records (EHRs) software programs link directly to the financial records of the PM software. This software allows providers to enter precoded encounter data directly in the practice management software while working in the patient's electronic medical record in the exam room, by a simple point and click on each procedure and diagnosis. In offices with PM systems without integrated electronic medical records (EMR) software, encounter forms are still used (see Figure 29-1). The checked-off procedures on the form are entered in the PM software, which is built to perform all necessary calculations. Note that the coding of these procedures can occur at this time or at a later date; however, the sooner the coding, the quicker the turnaround time for billing and payment to the provider or medical facility. Overall, there are far fewer steps, calculations, and paperwork involved in using computerized methods when compared to the pegboard system.

You must include five essential factors when writing a check:

Date: The month can be written or numerical. Payee: The person to whom a check is written. The name of the payee is listed on the check after the words "Pay to the order of." Numeric amount: The amount of the check in numbers. Keep the numbers close to the dollar sign so other numbers cannot be inserted to increase the amount of the check. Written amount: The amount of the check written in terms of dollars and fractions of dollars. For example, a check for $25.89 is written, "Twenty-five and 89/100." Fill in the remainder of the space with a line to prevent insertion of words to increase the amount. Payer signature: Signature of the person owning the account or other designated individuals. The payer is the person who signs the check or the corporation that pays it. The payer is also known as the maker.

Check Components

Date: Watch for a postdate (a future date), a stale date (six months or older), or a preprinted date requirement such as void after 60 days. A check with these features is not valid before or after a specific period of time. Words of negotiability: Negotiable refers to something that can be transferred or exchanged. On a check, the words "Pay to the order of" are considered to make the check negotiable. In other words, the amount written can be transferred from the account of the payer to the payee. A check must say "Pay to the order of" or "Pay to the bearer" to be negotiable. Payee: The check must identify to whom the check is written. In the office, this will be the provider or the medical clinic that receives checks as payment for care provided. A payee can also be a person or company that has provided services to the practice, for which a check is written out by the office. Numeric amount: This is the amount of the check written in numbers. Written amount: This is the amount written in words. It must agree with the numeric amount. Drawee financial institution: This identifies where the check is payable. Checks issued by the government, traveler's checks, corporate checks, and money orders do not have a drawee institution printed on them because they are the drawee. Signature: The signature is usually handwritten but can also be a reproduced facsimile. A reproduced type of signature is commonly seen on paychecks of large companies that employ and generate checks for a great number of employees.

Balance

Difference between debit and credit.

Discounts

Discounts are not as prevalent as in the past and in fact are illegal in some circumstances. However, discounts or waivers still exist primarily for professional and significant financial hardship reasons or for patients that are not covered by insurance. In all instances, the provider will notify you about these discounts for a particular patient. Also, when patients might have significant financial hardships, the provider can consider a discount as long as policies and regulations are complied with. These discounts will vary in amounts, if offered at all. Do not take it into your own hands to provide discounts to a patient without the authorization of the provider or authorized financial management personnel.

For each debit, there is an equal and opposite credit, and the total of all debits must equal the total of all credits.

Double-entry bookkeeping holds the following advantages over single-entry bookkeeping: Accurate calculation of profit and loss in complex businesses Inclusion of assets and liabilities in bookkeeping accounts Ability to prepare financial statements directly from the accounts Detection of errors and fraud are more visible Assets = Liabilities = Owner's Equity The double-entry method of bookkeeping is what most financial accounting is based on and is the bookkeeping system most often used in the large and busy medical setting.

This system has two notable characteristics:

Each transaction is recorded in two accounts. Each account has two columns.

For patients who do not have insurance, there are often alternative funding and payment plan options offered, such as government funding programs (e.g., Medicaid, Medicare, Social Security Disability, Victims of a Violent Crime Fund)

For hospitalization, many health care organizations will offer "Charity Care" for patients who do not have the means to pay for hospital expenses and do not qualify for any government program. An example of such a financial policy would be where a patient may qualify for financial assistance if her household income is below 350 percent of the federal poverty limit or if annual out-of-pocket medical costs exceed 10 percent of household income in the past twelve months.

Completing the Check Register

It is a record showing the check number, person to whom the check is paid, amount of the check, date, and balance. It is kept by the person writing the check as a record of the transaction. When using computer software, the check is recorded electronically and the register updated automatically. This supplies a record of the expenditure as well as a running balance of the account. In a traditional checkbook, it is a good practice to complete the stub or register before writing the check to avoid accidental overdraft or forgetting and then mailing the check without remembering the payee or the amount to deduct from the balance. Some traditional checkbooks have a duplicate feature that imprints a copy of each check when it is written, thereby preventing this situation. When the check is finished, it is attached to the billing statement and given to the provider for signature prior to mailing. Providers might give check-signature power to the medical assistant or office manager dealing with the finances to eliminate the need for their personal signature. A signature authorization card obtained from the bank must be completed to allow someone other than the recorded owner of the account to execute checks. Some offices, as a means of monitoring expenditures and preventing illegal employee activity, require two signatures on a check or have a policy requiring the individual writing the check (e.g., bookkeeper) to have another authorized person (often the office manager) sign the check. This also provides an opportunity to question expenditures and maintain a sense of cash flow. This authorized office member is considered the agent, or the person authorized to act for another person. You are the agent for your employer, the provider, in the office. Bank officials are agents for the bank. If a mistake is made in writing a check, it is necessary to write " VOID" across the check and stub and write a new one. File this voided check with your canceled checks because it must be available for auditing purposes. Do not erase, cross out, use correction fluid, or change parts of a check because this type of check can be refused by the bank. Practice preparing checks by following Procedure 32-1 and using the workbook samples.

Posting Procedures to Patient Accounts

It is essential to post accurately the actual procedures performed on the patient on the given medical visit day so the bookkeeper can maintain close track of services rendered and payments due to the physician or medical facility. Several methods can be used to post patient procedures to their respective patient accounts, including both manual and computerized methods. In the past, the pegboard system was exclusively used to record financial transactions. Today, most offices and clinics use computerized systems to perform the bookkeeping process. To properly charge or credit a patient account, patient account numbers are usually assigned. The patient's account number is an identifier for the patient/beneficiary chosen by the provider and may consist of numbers, letters, or a combination of both. Patient account numbers are most often not the same as the chart number assigned by the practice.

Preparing Checks

It is very important to perform this task with complete accuracy. The office will receive invoices or statements from utility companies, medical suppliers, periodical publishers, perhaps a rental agency or mortgage company, and various other businesses. Each invoice or statement must be checked to be certain it is for services or materials you receive. Most practices will issue a purchase order (P.O.) for products it needs. When the shipment arrives, it will contain a packing list. Check off each item on the packing list as unpacked to verify receipts of all items. The P.O. and packing list should be reconciled, missing items noted, and then stapled together and attached to the invoice/statement when received. Checks will be issued reconciling the P.O., packing list, and invoice/statement. Checks may also be written for employee salaries, tax payments, provider's expenses, the office petty cash fund, and other needs If your practice issues payments directly using a computer program, you must learn how to use the particular software program. Many programs allow you to bring up the check form on the screen and complete the entries. With software, your balance is automatically adjusted for you each time you add a deposit or write a check. Whether using either a traditional or computerized method, the same entries are required.

As outlined in the Medicare Desk Reference for Physicians, the routine waiver of Medicare deductibles and co-payment is unlawful for the following reasons:

It results in false claims. It violates the anti-kickback statute. It results in excessive utilization of Medicare items and services. For example, according to CMS, the provider or supplier who routinely waives Medicare deductibles and co-payments is misrepresenting the actual charge of that service or supply. It is best practice to avoid waiver of fees, although there are certain exemptions for consideration of financial hardship.

stop payment

a method by which the maker of a check may stop payment of a check(s) written.

Banks have instituted a number of features to guard against fraud, but they are not necessary for validity. If they are missing, it is best to scrutinize the check very carefully.

Name and address of the maker: This is usually preprinted by the check printer. Chronologic check number: This is printed at the right upper corner of the check. Check routing symbol or ABA number: A code number found in the right upper corner of a printed check. It might be above the check number on a business check or below the check number on a personal check. It is in fractional form and identifies the institution involved in the clearing process. This number was originated by the American Bankers Association (ABA). The purpose is to have a method of identifying the area where the bank on which the check is written is located and to identify the bank within the area. It may be written as a fraction (44/119) on a business check or hyphenated (25-61) on a personal check. Magnetic ink character recognition (MICR) numbers: These are numbers and symbols that aid in the check clearing process. The MICR numbers contain the nine-digit routing numbers issued to financial institutions, also known as the ABA numbers. The ABA number represents the name and specific location of the banking institute. The same line contains the information of a specific checking/savings account number.

Pegboard System

Patient financial account information used to be recorded in what was known as the pegboard system. The pegboard system uses an actual board as a base with pegs that attach the day sheet, the ledger, and the encounter form. The day sheet would hold all the daily entries, listing patients seen as well as a complete financial record of charges made and payments received. All amounts are calculated at the end of the day by adding each column and posting totals in the spaces provided. If a practice were still using a manual method (e.g., the pegboard system), the charges or no-charge visits for each patient would be recorded on the day sheet. A receipt must be given to the patient after each payment (e.g., cash, check, credit or debit card). Patients should be informed never to mail cash for payments on account. If by chance a patient does mail in cash, immediately get a coworker and count and record the cash received and generate a receipt. At the end of each shift (end of day, morning, evening, etc.), balance cash receipts and have a coworker count the cash and record both of your initials on the cash receipt/payment journal. The day sheet (or payment receipt journal) will reflect the names of all patients treated in the office each day as well as record any payments received in the mail or from patients who come to the office just to pay the bill. Unassigned columns on the day sheet may be used to distribute charges or receipts among providers or to distribute charges by departments (such as laboratory, X-ray, or physical therapy) or by medication type (in cases such as chemotherapy). With the prevalent use of EHRs today, most of the transactions will be recorded in your Batch. The payments will be recorded in the Payment on Account application of the Financial module. Statements will generate electronically that can be printed and given to the patient. The entries should be kept in chronologic order. The total amount of cash and checks, including credit and debit card payments, should be manually recorded on a cash control sheet. The cash control sheet can be a daily record sheet or a monthly record showing an entire month with a line for each day to show income in cash and checks, any deposits made, and any amounts not deposited and therefore carried over to the next day. When the balance is carried forward, it is important to record it under "previous balance" for the next day, where it will be added to the total received to calculate total on hand. This kind of record is also helpful in double-checking your bank deposit slips. The cash and checks should equal the amount shown on the cash control sheet. This amount should also equal the amount of the bank deposit for the day.

Which of the following would be considered a disadvantage of computerized accounting systems?

Power failure, computer viruses, and hackers are possible problems when using computerized systems.

Pros and Cons of Accepting Credit and Debit Cards

Pros of Accepting Credit Cards Easy to use and makes paying bills or making store purchases hassle free for customers. A business that accepts credit cards gives customers another payment option. Cons of Accepting Credit Cards Businesses see small processing fees for each credit card transaction. Credit card transactions add another layer of detail to your business's bookkeeping practices. Pros of Accepting Debit Cards Compared to credit cards, debit card payments generally have a faster approval time, which means faster access to revenue. Accepting debit cards gives your business access to consumers who do not have credit cards. Because the debit process is similar to a cash transaction, the fees that a business pays on debit transaction are smaller than credit card or check fees. Cons of Accepting Credit Cards Choosing to accept debit cards requires the minor, but additional, step of adding a pin pad to a credit card terminal. As with credit card transactions, debit card use adds another layer of detail to your business's bookkeeping practices.

Perform Accounts Receivable Procedures to Patient Accounts, Including Posting Charges, Payments, and Adjustments

Purpose: Accurately record charges, payments, and adjustments on a patient ledger or computer accounting program. Equipment: Practice management or computerized bookkeeping system; or pegboard system with ledger cards, day sheet, and black and red ink pens. Skill: Perform accounts receivable procedures to patient accounts including posting charges, payments, and adjustments 1.Pull patient ledger card or pull up patient account on the computerized program. If PM or pegboard is not available, you can download a "ledger" from Microsoft Word templates for use. 2.Post charges with descriptions. Add charges for a new total. Charges are posted in the debit column. If a balance is shown on the patient ledger, add the new debit to get a new balance. A computerized system will automatically calculate the totals. 3.Post insurance payments with descriptions. Add payments for a new total. If the credit is greater than the balance due, the difference is a credit balance and is shown in red. 4.Post insurance adjustments with descriptions. Add adjustments for a new total. 5.Post patient payments with descriptions. Add payments for a new total. 6.Post and calculate total charges. 7.Post and calculate total payments. 8.Post and calculate amount due. The balance column should always reflect the current status of the account. 9.Check off each posted item on the encounter form.

Inform a Patient of Financial Obligations for Services Rendered

Purpose: Explain patient financial obligations for services rendered in a professional manner and displaying sensitivity. Equipment: Procedure cost estimate form, pen, telephone, patient chart (paper or electronic). Skill: Inform a patient of financial obligations for services rendered 1.Access patient chart. Refer to procedure/services. 2.Identify charge for procedure/services on the encounter or referral form. 3.Complete a procedure/service cost estimate 4.Review the cost estimate with the patient (in person or by telephone). Provide a copy of the cost estimate to the patient (in person or via mail). Demonstrate professionalism when discussing patient's billing record. Display sensitivity when requesting payment for services rendered. Discuss the amount of the cost estimate for each procedure/service. Itemize each procedure/service and give patient time to ask questions. Practice role-playing various scenarios so that you are comfortable discussing costs and requesting payments. Refer to Clinical Pearl for suggested phrases. 5.Confirm that patient understands the financial obligation. Document the discussion in the patient's chart. Have patient sign any appropriate documents reflecting financial policy. Avoids misunderstandings after the fact. Allows patient opportunity to discuss treatment and payment options that fit within his or her budget.

Prepare a Deposit Slip

Purpose: Prepare a bank deposit slip. All cash, checks, and coin must be entered without error and the deposit accurately totaled. Equipment: Deposit slip, pen with black or blue ink, calculator, cash, currency, checks, and coin wraps to be deposited. Skill: Accurately prepare a bank deposit 1.Assemble equipment and supplies. 2.Separate money to be deposited by coin, bills, and checks. 3.Arrange dollar currency by denomination, portrait, and direction. Total the currency and record it on the deposit slip. 4.Count the coins; wrap large amounts. Enter the amount of coins on the deposit slip. 5.Check to ensure that all checks are endorsed. Arrange checks face up from greatest to least. Enter checks by number, maker, and amount on the deposit slip. 6.Total all checks listed on the back of the deposit slip and enter the total in the appropriate space on the back of the deposit slip; bring the total to the front of the deposit slip, writing in the appropriate space. 7.Total the currency, coin, and checks and enter it on the deposit slip. 8.Make a copy of the deposit slip for your office files. 9.Enter the deposit total on the check stub in the checkbook. 10.Deposit at the bank and obtain a receipt for records.

Prepare a Check

Purpose: Prepare a check and stub without error. Equipment: Checkbook, pen with black or blue ink, computer and computer checks Skill: Accurately prepare a check 1.Assemble equipment and supplies. 2.Correctly complete the check stub with all appropriate components and then calculate the new balance. Enter the check number if it is not preprinted. Enter the date. Enter the payee name. Bring forward the balance. Add any deposits. List the amount of the check. Compute the new balance. 3.Correctly complete the check with all appropriate components. Enter the date. Enter the payee. Enter the correct numeric amount. Enter the correct written amount. 4.Obtain authorized signature on check.

Reconcile a Bank Statement

Purpose: Reconcile a bank statement so that the checkbook balance equals the bank statement balance. Equipment: Bank statement and canceled checks or photocopies, reconciliation worksheet, pen or pencil, and calculator or adding machine. Skill: Accurately reconcile a bank statement 1.Assemble equipment and supplies. 2.Compare the opening balance on the new statement with the closing balance on the previous statement. List the bank balance in the appropriate space on the reconciliation worksheet. If the statement balances do not agree, contact the bank. 3.In the checkbook, check off all deposits credited to the account. Add to the bank statement balance any deposits not shown on the bank statement. Such as, amounts deposited since the statement was prepared. 4.Put checks in numeric order and compare the check entries on the statement with the returned checks. Check off all returned checks in the checkbook. Determine whether you have any outstanding checks and, if so, list them on the reconciliation worksheet and total them. Mark stub or entry on register if check was returned. List those not checked on reconciliation worksheet. Total outstanding checks. 5.Subtract from your checkbook balance items such as withdrawals, automatic payments, or service charges that appear on the statement but not in the checkbook. These items are indicated by a code such as AP for automatic payment or SC for service charge. 6.Add to your checkbook balance any interest earned as indicated on your statement. Some banks pay interest if a specified minimum amount is maintained in the account. 7.Make sure the balance in your checkbook and the balance on the bank statement agree. If they do not agree, subtract the smaller figure from the greater for a possible clue to the error and recheck all figures.

Currency should be sorted as follows:

Put all bills of the same denomination together. Face bills the same direction, portrait side up. Stack in order from highest to lowest denomination (e.g., 50s, 20s, 10s, and 5s, with 1s at the top of the stack).

Accepting Checks from Patients

Remember to examine checks and other banking documents closely before accepting and submitting them. Checks are much more likely to be processed quickly by the bank if they have been completed correctly. Before accepting a check from a patient, be certain to check the following most common check writing errors: The written amount does not match the numeric amount. For example, a person might write a check with the written amount as one hundred dollars, but the numeric amount is only $10.00. The bank receiving this check will likely not accept it and will return it to the practice. A check that is not dated or that has a wrong date, usually the year. Some patients simply neglect to date their checks. Others enter the wrong date (post- or stale-dated) both intentionally and unintentionally. Again, the bank will return checks with no date, future dates, or those dated a certain number of days in the past. A check not signed by the payer. These types of checks are returned instantly by the bank to the office. The signature of the payer does not match the one on file. Signatures generally change with age. Other events can also alter the way a person signs documents. If the signature on a check differs noticeably from the initial sample provided, it will be returned by the bank to the office. Many times, the office has no control over this situation. Modified or altered checks. Checks that appear to have been altered with scratch-outs, write-overs, use of correction fluid, different colored inks, or multiple handwriting styles are considered altered. Even if the cause is a simple mistake, these changes look suspicious to the bank and can cause the check to be returned to the office. If a mistake absolutely must be corrected, ask the payer of the check to use one line to cross out the error and initial the changes. This does not guarantee that the check remains valid, but it can lower the level of suspicion.

It is important for the patient to understand that the anticipated costs provided on the estimate are just that—an estimate. In the event of unforeseen complications or additional problems, expenses are likely to be higher than the estimate. Covering this topic thoroughly prior to the care being provided allows the patient to understand financial responsibility and aids the medical assistant in future collection efforts. For many patients and staff members, discussing the subject of money owed is touchy and uncomfortable. You must always address the topic in a calm and nonjudgmental way and comply with office policy, even if a patient requests special payment arrangements. Special requests should be documented and forwarded to the appropriate person or department, often the office manager, billing department, or managing provider. When asking for payment, use positive expressions. Practice your professionalism by role-playing with coworkers various scenarios regarding patient finances. Adjust the wording to your comfort level and to that of a service provider professional.

Some examples: "Co-payment is expected at the time of service" or "Your office visit will be approximately $____. For your convenience we accept cash, checks, and credit card." For the patient checking in at the front desk: "Your co-payment today will be $____." For patients checking out: "Your charges for today's office visit are $____. Would you like to pay by cash, check, or credit card?" or "I see your deductible has been met and/or insurance pays 80 percent. Your portion of the bill comes to $_____. Would you like to pay by cash, check, or credit card?" For a patient procedure: "I have an estimate of your costs for your procedure scheduled next week. Co-payment is expected at the time of service. May I help in making payment arrangements?"

Advantages of Computerized Systems

Speed: Formatted screens and built-in databases of patient accounts and vendors allow actions to be performed faster. Efficiency: Better use is made of resources and time; cash flow should improve through better debt collection and inventory control. Automation: Fast and accurate generation of accounting documents such as invoices, credit notes, statements of accounts, purchase orders, and even payroll documents can all be done automatically. Calculations: Account calculations are performed automatically for greater accuracy. Accuracy: Less room for errors exists because only one accounting entry is needed for each transaction rather than two or three with a manual system. System integration: Programs come with a computerized ledger system, which is fully integrated, so when a business transaction is entered, it is recorded or linked to a number of accounting records at the same time. Concurrent information: As information is entered in the system, the accounting records are automatically updated; therefore, account balances of patient or vendor accounts remain up-to-date. Availability of information: Information may be accessed almost instantly and made available to different users in different locations at the same time. Management information: Many types of useful reports can be produced, which helps management monitor and control the business by making wise decisions based on financial gains and losses. For example, the aging accounts will show which customer accounts are overdue. Legibility: The data input on a screen displays legible printed data and prevents errors that might be caused by poorly written numbers and documentation. Staff motivation: These systems require staff to be trained to use new skills, which can make them feel more motivated with their office abilities. Reduction of frustration: Management and providers can be on top of their accounts and thereby reducing stress levels associated with the financial unknowns. Cost savings: These programs reduce staff time in preparing accounts and audit expenses because records are neat, accurate, and up-to-date. Also, because there are so many programs to choose from, the cost to purchase a system has decreased over the years and has become more affordable for medical facilities, both large and small.

Stop Payment on Checks

Stop payment is a method by which the maker of a check may stop payment. The bank charges a sizable fee for this service. Some banks will accept a stop order by phone if it is promptly followed by completion of a form, which the bank furnishes. Stop payments can also be generated via online features. The payer must furnish the number of the check, date issued, name of payee, amount of check, and the reason for stopping payment. The bank will then refuse to honor the check. A stop payment order is used when a check is discovered as missing or thought to be stolen or lost or if there is a disagreement regarding a product or service received. As a precautionary measure, the bank can consider placing a warning message on the account, which advises bank representatives to check signatures carefully to detect any attempt at a forged signature. Remember, when stop payment is placed on a check, the amount of the check should be added back to the checking account balance, and the stop payment cannot be reversed. A replacement check must be issued.

Bank Statements

The account holder's canceled checks are reported monthly with your bank statement and may be viewed online as a check image (a front-side picture of the check). If needed, a copy of a canceled check may be ordered from the bank. With the increased use of online banking, e-statements and images of canceled checks are available online or sent by email to the account. In addition, banks offer the ability to request a bank statement through an ATM, which usually contains the last 10 transactions made on an account.

Check Endorsement

The endorsement of a check transfers all rights in the check to another party. Endorsements should always be made in ink with a pen or rubber stamp. The end of the check to be endorsed can be identified by holding the check on the right end as you look at it, turning it over, and endorsing the opposite or left end. All checks received in the office, whether in person or through the mail, should be protected by endorsement immediately at the time received.

In health care finances, what is the record of all charges or services rendered, any payments made by the patient or the insurance carrier, and any adjustments, included with the specific dates of these entries referred to as?

The patient ledger.

Bank Deposits

This is usually a daily task, or it can be as infrequent as once a week for a provider with a limited practice. Recall that a deposit is an amount of money (cash or checks) placed in a bank account. Deposits should be prepared in a secure place out of people's view. A deposit slip is an itemized list of cash and checks deposited in a checking account. It is important to keep a copy of all deposit slips to verify deposits. Count and enter the total amount of the bills on the currency line of the deposit slip. Next, count and enter the total amount in coin on the coin line. If there is a large amount of coin, it should be placed in wrappers. There are specific amounts to be rolled for each type of coin: $.50 for pennies, $2.00 for nickels, $5.00 for dimes, and $10.00 for quarters. Most banks also want bills in bill bands or grouped for ease of handling if in larger quantities. Ensure that all the checks have been endorsed. Arrange them facing up from the largest amount to the least. List checks by number, last name of maker, and amount on deposit slip. A computer-generated list or an additional sheet of check listings is acceptable if a deposit slip is attached. If a money order (MO) is received, identify it as MO and the payee's name. If there are more checks than can be listed on the front of the deposit slip, use the back, total the amount, and bring it forward to the correct line. Total the amount of the checks and enter it on the slip. To avoid errors, total the actual checks and compare with the total listed amount. Total the deposits and enter the amount on the deposit slip. Make a copy of both sides of a deposit slip in case any question about the deposit should arise. When the deposit slip is finished, enter the amount in the checkbook and add it to the existing balance, enter it on the daily log sheet, or post it on the appropriate computer screen. Deposit slips are imprinted with the account number in MICR numbers that match those on the checks. These numbers make it possible for checks and deposit slips to be sorted and recorded by computer. Banks will accept a list of deposited items on something other than the bank-provided deposit slip as long as the bank deposit slip is attached. It is important to perform a quality check by having a second reliable office staff member count the checks and cash being deposited and verified by their signature along with yours. You will need to make a copy of each deposit slip for your financial records and then match it up with the deposit record received by the bank. This deposit record is a record of a deposit that is given by the bank to the customer at the time of the deposit. It is important to keep the deposit record as proof of the deposit in case the bank fails to list it on the monthly bank statement. Bear in mind, the deposit record from the bank should match the copied deposit slip filed behind before you left the office. Deposits are usually placed in a locked, zippered bank bag to be taken to the bank. They can be taken inside and given to a merchant teller (for more immediate service) or deposited in the night depository. Care should always be taken when transporting money. Be aware of your surroundings and do not put yourself in a questionable situation. If there is any chance you are being watched, do not leave your car. It probably is a good idea to vary the deposit day and time if possible so you do not become predictable.

Debit and Credit Cards

Today, debit cards are the preferred alternative to cash and checks by most customers. Debit cards let a customer make payments to a business by withdrawing funds directly from her personal checking account. It is much easier and quicker to swipe a card than it is to fill out a check. Credit cards allow customers to make payments or purchases by drawing from a reserved line of approved credit. Another reason to favor debit and credit cards as a form of payment over checks is for security reasons. Other precautions to be observed when accepting checks include the following: Be sure the check has the seven components that make a check valid and that no corrections have been made. It is best practice NOT to accept a third-party. Most banks no longer accept any form of third-party check. A third-party check example is a check made out to the patient by someone unknown to you. You might have patients who want to write a check for more than the amount due so they can have some cash in hand. This is generally not a good policy and not best practice. It would be advisable to refuse such a check. Do not accept a check marked "paid in full" or "payment in full" unless it does pay the account in full, including charges incurred on the day the check is written. If there is still a balance, you will be unable to collect if you accept and deposit such a check. People often write "paid in full" or "payment in full" on the memo line on the front of a check. It would be appropriate to ask the patient to change the memo to note the Date of Service (DOS) instead of a "paid in full" notation. Be sure to check this line because it is easy to overlook. When you receive a check, stamp it with the deposit endorsement (see the next section) to protect against theft. Do not accept a postal money order with more than one endorsement. A money order with more than one endorsement is invalid, except if it was issued to more than one payee using the conjunction "and."

To complete the stub or register properly:

Use black or blue ink. Enter the check number if it is not preprinted. Enter the date. Identify the payee. Bring forward the balance from the previous stub. List any deposits. Enter the amount of the check being written. Enter the new balance.

The record of an account sent to the account holder, usually on a monthly basis, showing the beginning balance, all deposits made, all checks drawn, all bank service charges and interest earned, and the closing balance is called:

a bank statement.

denomination

a category or classification of currency.

outstanding check

a check you have written that does not appear on your bank statement because the payee has not yet cashed the check.

A charge added to an existing balance is referred to as:

a debit.

register or check stub

a formal or official recording of items, names, or actions; a record of money that has been spent; a record showing the check number, person to whom the check is paid, amount of the check, date, and balance.

single-entry bookkeeping system

an accounting method in which each financial transaction is recorded only once in account books; similar to a checkbook register; the journal for each transaction is recorded in one column, or on a single line, to account for either a positive or negative amount to demonstrate the receipt or disbursement of cash. its most basic form is similar to a checkbook register.

business associate agreement (BAA)

an agreement with a company that ensures the company understands the person's expectations as to what the company will do with the privileged information they will have access to and the consequences of an inappropriate disclosure; establishes guidelines regarding what will occur if an inappropriate disclosure of protected health information (PHI) occurs.

assets

anything owned that has exchange value; all the entries on a balance sheet that show the property or resources of a person or business; the money and items of value in a business. Examples of assets are accounts receivable, equipment, the building itself, and the land on which the building stands. In addition, accounts receivable and bank accounts are considered assets to a practice.

double-entry bookkeeping system

bookkeeping system that has two notable characteristics: each transaction is recorded in two accounts and each account has two columns. In this system, two entries are made for each transaction: one entry as a debit in an account and one entry as a credit in another account (refer to Figure 29-10).

negotiable

capable of being discussed and terms arranged; a check is a negotiable instrument drawn against deposited funds to pay a specified amount to a person or business upon demand.

Adjustment

credit entry made on an account to decrease a balance owed to the medical office; may be due to insurance, professional discounts, write-offs, or to correct bookkeeping errors.

There are many types of checks besides a personal check, and you should be familiar with them when dealing with practice finances. A(n) _______________ is a check paid directly from a checking account through the Internet

electronic check

journalizing

entries on the daily log; when an entry is made on the manual day sheet.

charges

fee for services rendered.

Credit balance

occurs when the amount paid is greater than was due or the account is being paid in advance of service provided.

Debit balance

occurs when the amount paid is less than the total due.

accountant

one who keeps, audits, and inspects the financial records of individuals or businesses; one who analyzes these transactions and prepares reports that not only tell the present status of accounts receivable and payable but compare current reports with other years or periods of time.

bookkeeper

one who records the accounts and transactions of a business.

agent,

or the person authorized to act for another person

The ________________________uses an actual board as a base with pegs that attach the daysheet, the ledger, and the encounter form.

pegboard system

reconciling

process to bring checkbook and bank statement into agreement.

Computerized practice management (PM) software systems are most commonly used today in clinics and medical offices to:

record financial transactions.

Account or ledger

record of all transactions made on an individual's financial record that lists debits, credits, and balance.

authorization

the giving of authority

endorsement

the payee's signature on the back of a check (Figure 32-2). It is a transfer of title on the check to the bank in exchange for the amount of money on the face of the check.

payer

the person who signs the check or the corporation that pays it. The payer is also known as the maker.

accounts payable (A/P)

the total amounts owed by the practice to suppliers and other service providers for regular business operating expenses, such as medical office supplies and equipment, office rental space, utilities (gas and electric, water, telephone and/or Internet services), and office staff salaries.

Posting

the transfer of information from one record to another. This might be an automated process, depending on the electronic system in place.

Debit

to deduct, to charge; a charge added to existing balance.

direct deposit

when an amount is sent electronically by the payer directly into a savings or checking account of the payee.