Beaverlog Tips: Volume 26 - June 14, 2005

Zero a Patient Account

This article topic was suggested by customers, Dr. Bert Kae-Je and Micki Turner. Thank you!

It is an unfortunate fact of life that some patients will leave your care with an outstanding balance on their account. After all insurance payments and whatever patient payments have been received, the patient or responsible party still owes you some money. Sure, you make an effort to collect but your statements are ignored or the patient is too destitute to make payments. Unfortunately, in a situation like this your options are few. You can send the account to a collection agency and perhaps collect a portion of what is owed or you can write the whole thing off, grumble about the unfairness of life, take a deep breath, and move on.

While The THERAPIST cannot get your money for you, at least it can make the process a little easier. On the Transaction list screen is a button labeled "Zero Account." When you click this button, you will get a message that the program will add bad-debt write-offs to all open services and starting balances in order to bring the patient's account balance to zero. When you click Yes, it does just that and the account balance will be zero and you can change the patient status to inactive.

Simple, right? Well, it is simple unless there are prepayments waiting to be applied. If it finds these, you will be alerted that the prepayments must be applied before you can zero the account. That's not too bad, prepayments are relatively easy to apply unless the amounts still owed on your services are not from the payer of the prepayment. Even then, it is a straightforward process to move the debt to the desired payer as you apply the prepayment. Once all of the prepayments are applied, you can clear the account with the Zero Account button.

If you are sending the account to a collections agency, one of two things will happen. Either the agency will pay you up front a fixed percent of the amount owed or will pay you a percentage of what they actually collect. The cleanest way to handle it in The THERAPIST is to keep the patient's account open until you receive payment from the collections agency. Then you enter a patient payment listing the agency as the payer name and apply the payment to the outstanding services in whatever manner makes the most sense.

If you need to zero an account with a credit balance, it requires a different process. When the account has a credit balance, it means that you have been paid more than what you have charged. You have two options: either refund the credit to the payer (we'll call this the ethical option) or add adjustments increasing the debt to offset the credit followed by applying the overpayment to the adjusted debt.

For the first option, double click a payment with a credit balance and press the Refund Prepayment button to add a refund adjustment to the payment. The second options is more complicated. First edit a service -- you may need to check the Show Inactives check box to see them if they have zero balances -- and click the Adjustments button on the Money tab. On the adjustments list add a positive adjustment to increase the effective amount of the service. For the statement comments you might enter something like "IRS auditor, please ignore." After entering the adjustment, you will have to edit the individual payer amounts to account for the adjustment or the service will no longer balance internally. Finally apply the overpayment to a service with a balance due.

If you live cleanly and call your mother regularly, lady luck may smile on you and you will never need to use the information in this article. I'll keep my fingers crossed.


National Provider ID Update

As of May 23, 2005, providers can apply for their National Provider Identifier. All HIPAA covered entities (providers and health plans) except small health plans must begin using the NPI on May 23, 2007; small health plans have until May 23, 2008. Go to for more information or to apply for you NPI.

Just because you get an NPI does not mean you can start using it. Few payers are set up to receive them so be sure to check with your payers and/or claim receivers to learn whether you can begin using your NPI.