Which type of payment by the insurance company to the provider is made in advance?
Show How many times have patients come to your office, received quality medical care, including an armload of free medication samples, and left without paying a dime? Probably more times than you’d like to recall. Getting patients to pay at the time of service is vital in an industry where the cost of doing business practically doubles each year, but putting a price on caring makes almost everyone uncomfortable. Our primary job is to take care of people’s medical and emotional needs and somehow we have to work in asking for payment for those services without appearing unsympathetic. How do you handle this delicate situation without offending patients or giving away the farm? Start by developing a written payment policy. Payment policy essentialsA payment policy lets your patients know what you expect of them and what they can expect of you. A well-crafted policy will prevent patients from being surprised about their financial obligation when they receive your services. It will also give your practice some legal protection should a patient fail to pay what you are entitled to collect. A payment policy similar to the one we use in our practice appears on page 18. You should tailor your policy to your practice, making sure to address the following elements:
If your practice charges patients for missing appointments, don’t forget to include that information in your payment policy. (Putting it on your appointment cards isn’t a bad idea either.) In my opinion, patients should only be charged for missed appointments if they know about the potential for it in advance. You can also use your payment policy (or a separate policy) to explain discounts for self-pay patients, if you offer any. Our practice offers a discount equal to what Medicare allows if self-pay patients pay at the time of service. If they don’t pay then, they don’t receive the discount. In our opinion, $42.50 in the bank is worth much more than $50 sitting in accounts receivable for 90 days. You’d be amazed at how grateful patients are for the discount and how much it can help your practice’s cash flow. Once you’ve written your payment policy, have each patient read, sign and date it. Then add it to the patient’s chart. If a patient says, “I didn’t know I had to pay my co-pay, or deductible” or whatever, simply refer to his or her chart. There is something about patients seeing their own signature on a document that seems to make them more willing to comply. Why patients don’t paySome patients are hesitant to pay anything up-front simply because they don’t understand how their insurance works or what services are covered. You may have had patients ask: “Why does the doctor need my $10 or $20 co-payment in addition to what he’s already getting from the insurance company?” These patients usually aren’t trying to be difficult or game the system, they simply need to be educated about co-payments, deductibles and covered and noncovered services. Most insurance companies now have automated fax systems that can supply you with this information, usually within minutes. With one phone call, the system will fax to your office a description of your patient’s benefits including deductibles, co-payments, covered services and out-of-pocket limits. This extremely valuable service can make things much easier when approaching your patient about his or her financial responsibility. Our office keeps these fax sheets in the patient chart so they can readily be referred to when a question about coverage or responsibility arises. If you practice long enough, you will unfortunately encounter a few people who have no intention of paying you. These people will try to dominate, manipulate and dump guilt on anyone they think they can intimidate. They have one goal in mind: to get away with as much as they can. What they can get away with depends on how you handle the situation. The key in dealing with patients who don’t want to pay is to stand your ground. Be calm, be polite and keep referring to the payment policy. It will inform your nonpaying patients what they can expect if they refuse to pay. Of course some patients have genuine difficulty when it comes to making ends meet. An astute physician or practice administrator can ascertain when this is truly the case. People lose jobs, get divorced or face catastrophic illness. These people need our help and they will be truly grateful when you are able to give them a break. A SAMPLE PAYMENT POLICYThe payment policy below is similar to one used in the practice where the author works and can be used as a guideline to help you develop your own (click below to download the policy). Patients are asked to read and sign a copy of the policy, which is then attached to their chart for later reference. Payment PolicyThank you for choosing us as your primary care provider. We are committed to providing you with quality and affordable health care. Because some of our patients have had questions regarding patient and insurance responsibility for services rendered, we have been advised to develop this payment policy. Please read it, ask us any questions you may have, and sign in the space provided. A copy will be provided to you upon request.
Our practice is committed to providing the best treatment to our patients. Our prices are representative of the usual and customary charges for our area. Thank you for understanding our payment policy. Please let us know if you have any questions or concerns. I have read and understand the payment policy and agree to abide by its guidelines: ____________________________________________ ______________________ Signature of patient or responsible party/Date The physician’s roleWhen discussing payment policies, there is one rule I feel is crucial, albeit difficult to follow: As much as possible, physicians should try to distance themselves from the actual collection process. A well-meaning physician who tells a patient he or she can wait and pay what’s owed next time undermines the staff person’s authority and credibility and also sets up a silent payment arrangement: “If I complain loudly enough, the doctor will let me get my way.” Of course, there will be special circumstances when a staff member may want to confer with a physician (e.g., when a patient has confided he or she has just lost a job or is experiencing some other financial hardship); however, this should not be done in front of the patient. Once the payment policy is in place, it should be effective enough to handle most situations without having to take the physician away from practicing medicine. Every dollar countsUnfortunately, keeping medical practices up and viable gets tougher every day. We struggle to survive in an industry where outside sources tell us how much we’ll get paid, when we’ll get paid or even whether we’ll get paid at all. This makes it more important than ever not to let the money you’re entitled to slip through your fingers. That money may be the difference between keeping your practice doors open or having to close them. Which type of payment is made in advance?Advance payment is a type of payment made ahead of its normal schedule such as paying for a good or service before you actually receive it. Advance payments are sometimes required by sellers as protection against nonpayment, or to cover the seller's out-of-pocket costs for supplying the service or product.
Is it advance payment or advanced payment?Advance payment is exactly what it sounds like: a payment made ahead of schedule. Paying for goods before you have received them, for instance, is an example of an advanced payment, as is paying for a service before it's carried out.
What is advance payment entry?Payment done by the Customer/Supplier before the invoice is sent is an Advance Payment. Generally, advance payment is done in the case of high value deals.
How is payment treated in advance in accounting?Whenever an advance payment is made, the accounting entry is expressed as a debit to the asset Cash for the amount received. A credit also needs to be made to the liability account – something along the lines of Advance Payments, Unearned Revenue, or Customer Advances.
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