Practice Management Alert

You've offered discounts, payment plans, and more,but you still haven't received payment from a patient. You may be forced to do a write-off at this point, says Steve Verno, CMMC, CMMB, NREMT-P, a medical billing consultant and educator in Orlando, Fla. Your practice is justified in writing off a patient's balance in the following situations:

1. The cost of collecting a balance is more than what the patient owes. For example: A patient's balance due is $3 after all insurance payments. The administrative cost to bill and collect is at least $15 per statement. "You don't spend $15 to collect $3," Verno says.

2. The provider uses all available methods to try to collect, including submitting the account to a collection agency.

3. The patient files for bankruptcy. This does not automatically initiate a write-off, however. The court could discharge the debt or establish a payment plan based on available assets. If you do receive a discharge of debtor notice, you can then write off the debt.

4. If the patient has Medicare, but there is no signed Advanced Beneficiary Notice of Non-Coverage (ABN) form on file for the specific date of service, and thus there is no GA (Waiver of liability statement on file) modifier on the claim, you will not be allowed to balance bill. So if Medicare won't pay the claim due to medical necessity, you will be forced to write off the charges.

5. If the terms of your contract with the insurance company state that you cannot balance bill the patient if a claim is denied. The process may follow a similar outcome as in bullet point 4, resulting in a write-off.

6. The patient proves financial hardship, using the criteria mentioned in part one of "Don't Let Patients' Financial Hardship Become Yours" in the Vol. 10, No. 2 issue of Medical Office Billing & Collections Alert.