When is it okay to write off a balance on a medical claim?

Question

Scenario 1: Medicare primary allowed $85 on a $260 charge, paying $70, leaving $15 balance for the secondary insurance to pay. The secondary insurance (United Healthcare) paid $11.50 of the $15 balance, is it okay to write off the $3.50 balance or do you leave the balance for patient?
Scenario 2: United Healthcare primary allowed $85 on a $260 charge, paying $70, leaving $15 balance for the secondary insurance to pay. The secondary insurance (Medicare) paid $11.50 of the $15 balance, is it okay to write off the $3.50 balance or do you leave the balance for patient?
Scenario 3: Cigna primary allowed $85 on a $260 charge, paying $70, leaving $15 balance for the secondary insurance to pay. The secondary insurance (Aetna) paid $11.50 of the $15 balance, is it okay to write off the $3.50 balance or do you leave the balance for patient?

Answer 1

Is your physician contracted with the insurance's listed above? If they are a contracted provider they MUST bill the patient for the balances. After 1 bill has been sent and no response the balances maybe discounted per your office policy, but an 'attempt' must be made. This is normally stated in the contract that your physician signed with the insurance companies to become participating.
Medicare has become increasingly strict on this in recent years. I have audited accounts regarding this and Medicare actually removed the doctors ability to bill them (participation revoked for a certain amount of time) for not abiding by the contracted terms. I always suggest that doctors include a section in their office policy's that state you will bill once and if no response with a balance under $XX.XX($5.00 or $10.00 your office picks) then the balance is written off to a specific account that you can track (ie:low balance write off-contracted vs non contracted write off) and if need be, you can run a report for various insurances if they request.

Answer 2

I haven't dealt with Medicare Billing directly since the fee for service days, so my information may be a little dated.

It costs an average of $7 to get a bill out the door, so clearly it isn't in your financial interest to go after a $3.50 balance.

If Medicare is not in the picture, write it off. Private carriers do not care.

Medicare did. They required 3 bills to go out, at which point you could write it off as bad debt. Whether they still do or not, I do not know. Where they get involved is that you need to be charging the same fee no matter who you are seeing - which is of course a crock since everybody but the private pay patient gets a contractual allowance.

If you take Medicare, you may well still have to get those three bills out the door before you can write it off, or you are dealing with a regulartory issue called 'fraud'.

Obviously I would consult the Medicare site for the current hoops one needs to jump through. There may be a provision for low balance accounts.

Answer 3

In all three senarios, the EOBs (Explanation of Benefits) from the secondary payer will tell you if the $3.50 is a provider discount (for contracted rate), or if it is patient responsibility. If it says provider discount or contracted rate, you must write it off, because the EOB is telling you to. If it tells you it's the patient's responsibility, then you bill the patient. In the rare event it's unclear, you call the insurance for verification.

Answer 4

Any time the provider wants to, they can write off the balance. The problem is, when they start doing it, everyone wants them to do it, then they can't stay in business.

Also, insurance companies don't like it when they do that, so if, for example, Cigna finds out they're doing it, they'll drop them as a provider.

Answer 5

In each case, you bill the patient. If you do not collect after a certain period of time, and used every resource you have, you can write it off. That is up to your practice as to what time frame. We have and do bill for everything that is due to us. It is worth the effort for us.