In some cases, you might have an overlap between an insurance payment, a prior patient payment, and an office write off. This can happen when an out-of-network patient is required to pay in full and the practice submits a claim on the patient's behalf. When the insurance payment is received, the charge already has a credit applied. In these instances, PracticeWorks performs a Distribution Swap.
Joe Smith has an emergency while on vacation and visits the nearest clinic. When checking out, Joe is informed that he must pay the full $100 charge for the visit, and the office will submit a claim on Joe's behalf. The cash payment is distributed. When the $40 insurance payment is entered later, it is shown as an over-distribution, which PracticeWorks does not allow.
Because the insurance payment takes precedence, PracticeWorks allows you to record the insurance payment in the Amt to apply column. In the example, the Already paid amount ($100) plus the Amt to apply ($40) totals $40 more than the Submitted amount.
When you click OK, $40 of the Cash payment is undistributed while the $40 Insurance payment is applied to the procedure.
If you select View/Edit Distribution on the Cash payment, the Amt to apply is reduced from $100 to $60, and the Paid - other amount is $40, the amount of the insurance payment.
In some cases, multiple payment distributions are applied to a procedure distribution. When this happens, you are prompted to make a decision regarding what to swap.
After you click OK on the Receive Insurance Payment window, the Distribution swap for... window is displayed, and you are prompted to select what to undistribute.
Use the drop down list to select which Undistribution method to use:
Newest First - Reduces the newest credit Amt applied until the insurance payment Amt to apply and Amt to write-off are distributed. This is the recommended method.
Oldest First - Reduces the oldest credit Amt applied until the insurance payment Amt to apply and Amt to write-off are distributed.
Manual - The Amt applied is manually adjusted until the Overdistributed by value is $0.00.
When using the manual calculation, it is possible to underdistribute the original distributions. When this occurs, the Overdistributed by: value is negative and the message "Overdistributed by value must equal $0.00" is displayed. You must correct the Amt applied or click Cancel, which removes the previously applied swaps.
Write-off amounts in Line Item accounting are not posted during the check-out process, but displayed as Ins WO in the aging grid, and Est Ins WO in the Check Out ledger.