Insurance Take-Backs
- Dylan Nigh
This document will explain how to transfer an insurance payment from one account to another, when an insurance company requests a take-back (sometimes called a negative payment). MacPractice has two suggested processes for handling this situation: Refund/Insurance Payment method, and the Positive/Negative Adjustment method.
Insurance Take-Backs - Refund/Payment Method
This is the preferred method of handling insurance take-backs. If you use the adjustment method, secondary claims associated to the affected charges will not be accurate.
This method does require posting a new insurance payment for an amount that is, in reality, only being moved from one patient to another, which can cause confusion on the Deposit Slip. MacPractice recommends creating a new insurance payment type for these take-back payments, so you can more easily distinguish new insurance payments from take-backs on your Deposit Slip. Click here for instructions on creating a payment type. Name the payment type something that makes sense to you, such as Take-Back. Select Insurance from the Payment Classification menu, and check Show in Menu.
Go to the ledger of the patient who is having money taken away. We will call this account Patient A. Open the insurance payment in question, and change the information in the Payment column to reflect the take-back being made. For example, if you have a $80.00 insurance payment, and the insurance company is taking back $30.00, you will need to reduce the amounts in the Payment column by a total of $30.00. The Remaining Amount of the payment is listed at the top of the payment window, next to the Check Amount field. Click Save to close the payment window. You will now have an unapplied insurance payment on the ledger. Unapplied payments are displayed in red text.
Now that you have the unapplied amount on the ledger, you are ready to create a refund. Click on the Insurance Payment, then go to the Other pop-up menu and select Refund.
NOTE: No refund check actually will be created. This only is being used to move a balance from one account to another.
The refund needs to have a Refund Reference # entered, which can be anything you wish to insert in this area, such as the check #, the Patient Account # you are transferring to, and so on. Leave the "Refund credit to" checkboxes unchecked. After you tab out of the Reference field, you will be able to click OK.
This will add a line item to the ledger to show the refund. MacPractice recommends going to the Other pop-up menu and selecting New Comment to create a comment explaining why the refund was created.
Then go to the account the payment is being moved to. Highlight the insurance claim and go to the Payment pop-up menu; select New Insurance Payment (or your custom take-back type, if you created one) and enter the same Reference #, payment amount and apply the payment to the appropriate charges.
You may also find it useful to mark this payment as an Electronic Funds Transfer, as illustrated below. Payments marked as Electronic Funds Transfers can be excluded from your deposit slip. This will help ensure your deposit slip accurately reflects the funds you have to take to the bank.
To exclude Electronic Funds Transfer payments from your deposit slip, check Exclude EFT at the bottom of the Deposit Slip window, as shown below:
Insurance Take-Backs - Positive/Negative Adjustment Method
The Positive and Negative adjustment method will not affect your deposit slips, but it will cause the "Primary Insurance Paid" amount to be incorrect on any secondary claims created for charges affected by the take-back.
Go to the ledger of the patient that is having money taken away. We will call this patient Patient A. Highlight one of the charges associated with the affected insurance company claim and payment. Go to the Other pop-up menu and select New Positive Adjustment in order to enter the amount the insurance company wishes to take back from Patient A's account.
Enter the amount the insurance is taking back, and enter an adjustment type that will make sense within your office, such as Insurance Take-Back. There is also a field for some additional notes, if you wish to enter the account number the payment is being transferred to, or other useful information about this transaction.
Since this amount is being added back to Patient A's account via the Positive Adjustment, theoretically it will show that the insurance company did not pay, allowing you to collect payment from Patient A again. If you still are expecting payment from the payer, you will need to change the claim status of the insurance claim to Outstanding to move the balance back to the Insurance Portion.
With the positive adjustment created in Patient A's account, you can go to Patient B's account (the patient the money is being moved to) and create a negative adjustment to reduce the amount from the ledger, showing the insurance company has paid the amount to Patient B's account.
Enter the amount of the credit being added to this patient's account, and again select the Insurance Take-Back adjustment type. Apply the adjustment to the relevant charges.
If the Negative Adjustment is the only payment you expect to receive from the payer, you will need to change the status of the insurance company's claim. Highlight the associated claim and go to the Other pop-up menu and select Set Claim Status Paid/Closed to move what was once Insurance portion over to Patient portion.
If expecting other payment, then leave the insurance company's claim open so you can apply payment to this claim in the future.