Accounting

Three types of write-offs:

SMALL BALANCE WRITE-OFFS: USED WHEN PATIENTS DO NOT PAY THEIR BILL. COLLECTION AGENCY WRITE OFFS: USED FOR ACCOUNTS TURNED OVER TO A COLLECTION AGENCY BAD DEBT WRITE OFFS: USED FOR ACCOUNTS THAT ARE UN-COLLECTABLE

When does this act apply?

THE PAYMENT PLAN IS SUBJECT TO A FINANCE CHARGE OF MORE THAN FOUR INSTALLMENTS

Why might an office divide patient billing into several cycles per month?

THE WORK OF BILLING & RECEIVING PAYMENTS WILL BE MORE EVENLY SPREAD THROUGHOUT THE MONTH. IT STABILIZES THE ASSISTANT'S WORKLOAD.

What is the Fair Debt Collection Practices Act?

THIS ACT ENSURES THAT PATIENTS ARE TREATED FAIRLY AND LEGALLY.

List a few of the daysheet columns that need to be completed:

TIME PATIENT NAME & ACCOUNT NUMBER RENDERED (description) BALANCE FORWARD FEE PAID- Enter the amount received ADJUSTMENTS NEW BALANCE

What are three banking tasks performed by the medical office assistant?

TRACKING EXPENSES PREPARING & DELIVERING DEPOSITS RECONCILING MONTHLY BANK STATEMENTS

What is the name of the U.S. federal law that regulates credit to patients?

TRUTH IN LENDING ACT

What information should be documented?

TYPE OF COLLECTION ACTIVITY: ( EX: PHONE CALL ) DATE ACTIVITY WAS PERFORMED RECORD OF CONVERSATION OUTCOME OF COLLECTION ACTIVITY FOLLOW-UP NEEDED

What information must be completed on a patient's personal check?

Current date Payee name Amount written in text & numerically Payor signature

List a few of the patient ledger columns that need to be completed:

DATE REFERENCE SERVICE RENDERED FEE PAID ADJUSTMENTS NEW BALANCE

What are the components of the pegboard system?

DAYSHEET SUPERBILL PATIENT LEDGER

What are the two types of codes and their meanings?

DIAGNOSTIC CODING: PHYSICIAN'S DIAGNOSIS PROCEDURAL CODING:PROCEDURES PERFORMED IN RESPONSE TO THE PHYSICIAN'S DIAGNOSIS

What is considered professional courtesy and who determines if it is offered?

DISCOUNT FEES FOR HEALTH CARE WORKERS, LAWYERS, & MEMBERS OF THE CLERGY, DECIDED BY THE PHYSICIAN

Where should all collections attempts and their results be recorded?

DOCUMENTED ON THE PATIENT'S LEDGER.

Disadvantages of the single-entry system

DOES NOT INCLUDE A BUILT IN QUALITY CHECK. ALL DOUBLE CHECKING OF FIGURES MUST BE DONE BY HAND.

How should entries be made in the single-entry system?

EACH DOLLAR AMOUNT RECEIVED OR PAID OUT IS ENTERED ONLY ONCE ON THE DAYSHEET

How should entries be made in the double-entry system?

EACH ENTRY MUST BE RECORDED IN AT LEAST TWO ACCOUNTS.

When should a daysheet be updated?

EVERY TIME A PATIENT COMES INTO THE OFFICE, EVERY TIME A PAYMENT IS RECEIVED BY MAIL, & EVERY TIME A PAYMENT IS MADE BY THE OFFICE.

When must receipts be issued?

FOR EVERY PAYMENT

Medical Office Assistant's should remain what when collecting payments?

FRIENDLY AND RESPECTFUL

What is a billing cycle?

Routine for sending statements, which are mailed periodically, usually every 30 days.

What expenses does point-of-service collection avoid?

SENDING INVOICES TO PATIENTS FOR PAST DUE BALANCES MAKING COLLECTION CALLS FOR PAST DUE BALANCES COMPLETING ADDITIONAL BOOKKEEPING ACTIVITIES

When and where should cash payments be stored?

SHOULD BE STORED SECURELY AS SOON AS IT IS RECEIVED

Three manual bookkeeping methods:

SINGLE ENTRY SYSTEM DOUBLE ENTRY SYSTEM PEGBOARD SYSTEM

What is accounting?

planning, recording, analyzing, and interpreting financial information

What should be done with the Truth in Lending Act disclosure?

should be put in writing & signed by both the physician & the patient or guarantor

What are the two types of accounts receivable?

MONEY THAT PATIENTS OWE & MONEY THAT INSURANCE CARRIERS OWE

How must financial records be kept?

MUST BE KEPT NEAT SO THAT THEY ARE ACCURATE AND USEFUL

What is accounts payable?

Money a business owes for purchases

Should you accept third-party checks as payment?

No

Can a medical office charge a higher rate for someone paying with a card? Why?

No, the physician's fee for must remain the same. It is illegal to charge someone a higher rate for paying with a credit card.

Who should have access to patient accounts?

ONLY AUTHORIZED EMPLOYEES.

What is an expenditure?

(EXPENSES) THE COSTS ASSOCIATED WITH RUNNING THE OFFICE.

What is a ledger?

A BOOK WITH INFORMATION ON ALL THE OFFICE'S BUSINESS ACCOUNTS.

What is a third-party collection agency?

A COMPANY OF FULL TIME, TRAINED DEBT COLLECTORS NOT AFFILIATED WITH THE MEDICAL PRACTICE

What is a check ledger?

A RECORD OF ALL CHECKS WRITTEN AND DEPOSITS MADE ON BEHALF OF THE MEDICAL OFFICE

What are installments?

A SET NUMBER OF SMALLER PAYMENTS SET UP OVER A SPECIFIED TIME PERIOD. (A PAYMENT PLAN)

What is a daysheet?

A SUMMARY OF THE OFFICE'S DAILY FINANCIAL ACTIVITY

What is an accounts receivable ledger?

A book of amounts owed to the office

What is an adjustment?

A corrective procedure

What is a fee schedule?

A list of specified fees a physician charges for services

The guideline for error correction?

ALWAYS USE INK WHEN MAKING CORRECTIONS DRAW ONE LINE THROUGH THE ERROR & WRITE THE CORRECTED FIGURE JUST ABOVE THE LINE HANDWRITING MUST BE CLEAR & LEGIBLE. FORM NUMBERS THE SAME WAY EACH TIME. KEEP ALL COLUMNS OF FIGURES STRAIGHT & IN LINE WITH ONE ANOTHER.

The difference between an invoice and a superbill?

AN INVOICE GENERALLY INCLUDES A TALLY OF SERVICES & CHARGES FOR A SPECIFIC TIME PERIOD. A SUPERBILL FOCUSES ON ONE VISIT.

What is a billing statement?

AN ITEMIZATION, OR INVOICE, OF THE BALANCE THE PATIENT OWES FOR SPECIFIC SERVICES.

What is an invoice?

AN ITEMIZED STATEMENT SHOWING A PATIENT'S FEES

When should cash be deposited into the bank?

AS OFTEN AS POSSIBLE,

How is equity calculated?

ASSETS-LIABILITIES=OWNER'S EQUITY

When does the medical office assistant reconcile the cash and receipts?

AT THE END OF THE DAY OR BEFORE COLLECTING FOR DEPOSIT.

When discussing financial matters with a patient, the assistant should:

Act as a partner in helping the patient arrange a payment solution.

What is a patient ledger card?

An account summary of one individual or family.

What is delinquent account?

An account that has gone unpaid for a long period of time with no payments or contact from the patient

What is income?

Any money received on a regular basis from work or investments

What payments should be entered on a patient ledger card?

Any payments received from a patient after the time of service, or via mail.

What is an asset?

Anything of value that is owned

The double-entry system is based on what equation?

Assets=LIABILITIES + OWNER'S EQUITY(CAPITAL)

What type of language should be avoided in collection letters?

Avoid using antagonizing words or threatening phrases.

When should fees be discussed?

BEFORE THE PATIENT IS TREATED.

What are the three areas of accounting an assistant must be familiar with?

BILLING & COLLECTIONS BOOKKEEPING BANKING

What is the pegboard system?

CARBON PAPER THAT ALLOWS POSTING OF INFORMATION TO SEVERAL RECORDS AT ONCE.

What are an assistant's responsibilities regarding billing?

COLLECTING PAYMENTS. SETTING UP PAYMENT PLANS

type of bookkeeping system offices use

COMPUTERIZED BOOKKEEPING SYSTEMS.

Are accounts receivables assets or liabilities? Why?

CONSIDERED ASSETS BECAUSE THE COMPANY STILL HAS A LEGAL RIGHT TO THAT INCOME

What is aging accounts receivable?

Classifying each account receivable by the number of days it has been outstanding

What type of language and tone should be used in collection letters?

Collection letters must always be friendly

How are payments to a collection agency handled?

IF A PATIENT MAKES A PAYMENT TO THE COLLECTION AGENCY, A PORTION OF THAT PAYMENT WILL REMAIN WITH THAT AGENCY, THE REST WILL BE SENT TO THE OFFICE.

What are the advantages of the single-entry system?

IT IS EASY TO USE, REQUIRES LITTLE TRAINING, & CAN BE LEARNED QUICKLY. IT IS ALSO RELATIVELY INEXPENSIVE TO MAINTAIN.

What does it mean to extend a line of credit to a patient?

IT MEANS THAT THE PATIENT WON'T HAVE TO PAY THE ENTIRE BALANCE OWED AT THE TIME OF SERVICE

What does liquidate mean?

IT MEANS THEY CAN BE EXCHANGED FOR CASH.

Why is it helpful to use a check ledger?

IT WILL MAKE IT EASIER TO TELL WHICH CHECKS AND DEPOSITS HAVE BEEN PROCESSED AND WHICH HAVE NOT

How are collections agencies paid?

If a collection agency obtains a payment, a portion of it will be kept as a commission, or fee

What is an accounts payable ledger?

It tracks office expenses & remaining debts to be paid

What are an assistant's responsibilities regarding bookkeeping?

KEEPS BILLING, PAYMENT, & EXPENSE RECORDS CURRENT

What does the HIPAA Privacy Rule state?

PATIENTS ARE ENTITLED TO THE PRIVACY OF THEIR MEDICAL RECORDS

Three categories accounts payable are categorized in

PAYMENTS FOR SUPPLIES & EQUIPMENT PAYROLL TAXES OWED

What information must every invoice include?

PHYSICIAN NAME & CONTACT INFO PATIENT NAME & CONTACT INFO PREVIOUS BALANCE PAYMENTS RECEIVED FOR CURRENT BILLING CYCLE AN EXPLANATION OF ANY NUMERIC CODES USED LIST OF CURRENT BILLING CYCLE SERVICES & CHARGES TOTAL BALANCE REMAINING

What is a receipt?

Proof of purchase and payment.

What is point-of-service collection?

RECORD OF PAYMENT AT THE TIME OF SERVICE.

What does it mean to post?

REFERS TO ENTERING DATA ON THE DAYSHEET AND LEDGERS

What does a Point of Sale terminal do?

Reads the information on the card & electronically checks for sufficient funds to process the transaction.

What are collection options on delinquent accounts:

SUE THE PATIENT FOR PAYMENT IN SMALL CLAIMS COURT WRITE OFF THE ACCOUNT AS BAD DEBT TRANSFER THE ACCOUNT TO A THIRD-PARTY COLLECTION AGENCY

three ways to collect on overdue balances

TELEPHONE COLLECTION LETTERS PERSONAL MEETINGS

How should medical office assistants be prepared to help patients understand their bills?

THE ASSISTANT SHOULD BE ABLE TO EXPLAIN EACH CODE AND ABBREVIATION RELATED TO THE SERVICES PERFORMED FOR THAT PARTICULAR PATIENT

How may insurance carriers handle overpayment?

THE CARRIER WILL DECIDE WHETHER TO REQUEST A REFUND CHECK OR TO TREAT IT LIKE A CREDIT

Who should have records of the payment arrangements?

THE PATIENT/GUARANTOR AND THE PHYSICIAN OR OFFICE MANAGER

What is a guarantor?

The person is who responsible for the bill. In the case of a child patient, the parent is the guarantor.

What is a UCR fee?

Usual, customary, and reasonable fee schedule (defines allowable charges that will be accepted by insurance carriers. Rate may vary from one carrier to another, but the process is the same)

Character traits medical assistant has when dealing with patients and their bills?

WELL-INFORMED, SENSITIVE, & TACTFUL.

What is equity?

WHAT BELONGS TO THE BUSINESS OWNER WHAT IS LEFT OVER AFTER A COMPANY'S LIABILITIES HAVE BEEN SUBTRACTED FROM ITS ASSETS

List the techniques for time-of-service collection:

WHEN REQUESTING PAYMENT, OFFER ALL PAYMENT OPTIONS SO THE PATIENT WILL KNOW PAYMENT IS EXPECTED

When are insurance adjustments necessary?

WHEN THE MEDICAL OFFICE & THE INSURANCE CARRIER HAVE A CONTRACT FOR REDUCED CHARGES

What types of software might a medical office assistant need to know how to use?

WORD PROCESSING SOFTWARE SPREADSHEET SOFTWARE PRACTICE MANAGEMENT SOFTWARE

What is a debit card?

a card issued by a bank allowing the holder to transfer money electronically to another bank account when making a purchase.

What is a third-party check?

a check written by an unknown party to the payee and endorsed by the payor.

What is a credit card?

a small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit.

What is a superbill?

an itemized list of all services provided to a client.

When must accounting transactions be recorded?

as they happen

What is a write-off?

cancellation of an unpaid debt

What is a post-dated check?

dated for a future date

How is a physician's fee for service determined?

determined by the cost of providing the service, the amount of experience the physician has & the fees charged by other physicians in the same area or region

What are accounting transactions?

economic events that require recording in the financial statements

What is a Point of Sale terminal?

electronic device used to process debit/credit card payments

What is an aging report?

identifies the outstanding balances in each account. 30 day increments.

How should payment arrangements be recorded?

in writing

List at least two protective measures for electronic records:

limit who has access place monitors in areas where other can't see the screen

What could happen if patient privacy is breached?

may result in civil or criminal action

What are accounts receivable?

money owed to a company by its debtors

What does NSF stand for?

non-sufficient funds

How should an NSF be handled on a patient's account?

notify the patient about the returned check

What is a liability?

the legal obligation to pay debts

Who must record accounting transactions?

the medical office assistant

Who should initiate the conversation about fees?

the office assistant

What does UCR stand for?

usual, customary, and reasonable

If unable to contact a patient by telephone, what step should be taken next?

written communication