The slower summer months are a great time to catch up on your aging reports and get some clean-up done. For a lot of practices, working the aging is an impossible task because there is so much that was never written off and is sitting on the aging report... making it very difficult to find the more current outstanding charges that you can actually do something with.
Tackling this is a two-part problem - Part 1: Getting the owner of the practice to agree to the write offs and Part 2: Getting everything written off.
Part 1: Getting Permission
The first questions for the owner should be: is there a reason you want to keep all of these old balances on the books? In most situations doctors think thy are still collectible, but the reality is once the timely filing deadline has passed, there isn't anything you can do. Most commercial carriers have a timely filing between 2 and 6 months and most government carriers have a timely filing of 12 months. Unless you have an appeal in progress, anything older than that is uncollectible and, therefore, should be written off.
The other common scenario is that the doctor just doesn't realize all of these old balances are still being carried on the books. We took on a new billing client a few months ago that had open charges dating back to 2004 and the doctor had no idea.
Old insurance balances serve no real purpose, other than making the majority of your reports useless and preventing you from effectively working the aging going forward. Seeing a million-dollar AR doesn't mean you have a million dollars coming in if it dates back several years. Write it off and get a real number.
The patient balance question can be a bit trickier. I can see an argument around carrying those balances for a bit longer, particularly if you are still seeing the patient. But if you have sent three statements and the patient still has not paid, at this point they probably won't unless you do something else. In most cases it's time to turn the patient over to collections or write the balance off. Think about it, if the patient comes back several years later, are you going to refuse to see them and get the full office visit over an outstanding copay?
Part 2: Writing It Off
When I was in support and I would talk to a client trying to work aging for the first time and they would want to make all the old stuff go away, my answer was always the same, "I don't have a magic wand." Good news: as of Medisoft 21, I do!
- Inside Medisoft, click on Tools - Services - Write Off Utility (make sure you have a backup before you run this in case anything goes wrong)
- For the Cut Off Date, list the date you want to use to write-off everything prior to. I recommend 18 months, but talk it over with the doctor and decide what they are comfortable with.
- If you decide there is a maximum balance you would want to write-off, fill that in the box next to "Transaction balance not to exceed," and if you do not want to write-off credit, put a 0 in the transaction credit box beneath it (otherwise credit lines will be zeroed out as well)
- In the Write Off Code box, select the code you want to write this off with, some practices like to make a special Bad Debt code so they can track it separate from everything else. If you are writing off credits, select the credit reversal code in the box above it.
- Click Refresh - it will take a few minutes, but it will load everything to the screen that meets your criteria to be written off.
- From there you can uncheck the box in the Post column for anything you do not want to write off. You can sort be several of the columns of you want took at it in remainder order, by procedure code, etc...
- When you are ready, click the Write Off button and watch the magic happen!
Part 3: Working Aging in Your New, Clean Reports
Now when you are running your aging reports you won't have them clogged up with years of ancient balances. We recommend that you work your Primary Insurance Aging report at least once a month and your Secondary Insurance Aging report once a quarter. The first time you do it, it will take the longest, but stick with it. After a couple of passes it will get cleaner (remember you only told the utility to write off 18 months plus, the first time there will still be some charges to write off).
And once you get this all cleaned up, you can start using the AR tracker in Medisoft 22 - which is even better than the report!