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QUESTION: I am a new back office dental staff member at an established practice where all I do is post insurance payments. The front office staff submits "new-patient" exam and x-ray claims for $40 and $50 each. I’ve been told that when insurance pays, I am to post the amounts that were paid and then adjust the original amounts submitted to match the payment amounts received so that the patient owes nothing. If insurance pays $0, I’m told to adjust the original amounts to $19, which is considered the "new-patient special" and that balance is owed by the patient. I would like to know if it’s a proper practice to alter the amount billed in patients’ account ledgers after it has been billed and paid by insurance?
ANSWER FROM PATTIE DiGANGI, coauthor of the “DentalCodeology" series of books:
Offices using the write-off system bill out the full fee for the procedure and then perform an adjustment (write-off) on the ledger to account for the difference between the office fee and the contracted fee with the insurance company. On their billing statements, patients see the full fee, and also an adjustment showing how much money their dentist is losing by being a member of their dental plan.
The problem with that explanation is the duel use of the word’s adjustment and write-off. Let’s look at some definitions:
Write-offs—This is the difference between the insurance fee the provider is contractually obliged to charge and the provider's usual, customary, and reasonable (UCR) fees. If patient insurance plans are set as PPO percentage plan types and use the carrier's fee schedule, several reports include write-off information.
Adjustments—These are reductions in charges to patients. These can be split adjustments into positive adjustments and negative adjustments for data entry purposes, but they are reported together or by type. For example, a positive adjustment type might be “missed appointment” or “late charge.” A negative adjustment might be “senior discount.”
It sounds as if, by the way your practice is adjusting fees, they are changing the fee charged. You are altering the dental records and creating potentially a question of fraud or false advertising, at a minimum.
When you adjust a fee, is the new patient special being documented? What is the audit trail for what is being done? Will the dentist be able to keep track and know the total of these write-offs when it’s tax time?
The ADA document, Protecting Your Dental Office From Fraud & Embezzlement, warns of the dangers and risks of write-offs and adjustments. I suggest you read that document. Though the intent may not be to cheat or do harm, fraud by accident or ignorance is still fraud.
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