Merriam-Webster defines a “write-off” as follows: 1. To eliminate (an asset) from the books: enter as a loss or expense.
When an insurance company pays you less than you expected for a service, do you really believe that you should have incurred a loss? Do you believe the service your agency provided is any less of an asset? Of course not.
In order to help you understand that you can use “write-offs” as a measurement for increasing revenue instead of tracking losses, I’ve prepared for you the 4 reasons you should measure payment write-offs on a regularly scheduled basis. Never take NO for an answer. Here they are!
- New insurance plans may not be included in your contract with the insurance company
If the insurance companies are paying less than you are billing them, there may be a discrepancy between the contract you have with the insurance company and the patient’s plan. When insurance companies create new plans they are not typically added to your current contract.
If you are aware of partial payments from insurance companies, you may be able to have your contract updated to include the new plans. If this goes unchecked and you continue to write-off partial payments you will be missing out of revenue for all future visits, instead of claiming the full amounts for all future visits.
- Claims denied for “no authorization” can still get paid
A common claim denial reason is “no authorization,” and many agencies have practices for automatic write-offs that often include claim denials. I usually recommend against automatic write-offs (except for contracted insurances), but if you do have write-offs for “no authorization” rejections you want to catch them.
Obtaining a retroactive authorization for a patient is often granted by insurance companies, so you should not let write-offs stand for “no-authorization” without appealing them first. An example of this might be that a client changed insurances, but wasn’t updated in your office until after being seen, chances are you will be able to obtain a retroactive authorization.
Discover the financial outcomes dashboards that will help you measure and analyze data like Write-Offs by Reason here.
- You can still get paid for claims that miss “timely filing” deadlines
This is another common automatic write-off that should be monitored. If the claim goes unbilled for a year then, yes, it’s probably time to write it off. But if you find that a claim was denied for timely filing by a couple of days, investigate the circumstances surrounding the delay. “Timely filing” denials can be easily explained and can likely still be paid.
You will need to submit the claim knowing it will first be denied, then you can work an appeal. If you find yourself in this situation, there is no reason to wait for the insurance company to return a denial notification. If you have access to the insurance companies on line portal you can track the claims that you send in for “timely filing” denials within days of submission. With the claim number you can do an appeal right away instead of waiting for the paper or electronic denial.
- Avoiding artificially inflated Accounts Receivable
Finally, when manually and electronically posting payments, you may find yourself constantly writing off “contractual” amounts, you may want to consider putting your insurance companies’ fee schedules in the system to automatically take these adjustments at the time of claim creation.
Doing this will prevent your Accounts Receivable from reporting an inflated number that you’re relying on for budgeting.
Because of these four reasons I caution behavioral health agencies from instituting any automatic write-off procedures in practice or in technology. If you do maintain automatic write-off procedures you should consider reporting on them daily to ensure you are fighting for all the revenue your agency has earned.
When you’re billing for your services don’t let the insurance companies devalue the services you provide. There are many reasons that claim appeals can be one, and if you work them quickly and methodically your billing department can play a huge roll in boosting your agency’s bottom line.
