Enabling the Service Tax

PracticeWorks provides a service tax feature that is disabled by default. You can enable it for your practice if your state implements an additional tax on services.

To enable the service tax and enter or change the percentage of the tax:

Select File > Preferences > Other office information. The Other Information window is displayed.
Click Service Tax Settings. The Service Tax window is displayed.
Select the Enable Service Tax option and type the applicable Tax Percentage. The percentage must be at least 0.009.
Click OK.

Security

The Security Access level for enabling the service tax is 10, but can be changed by the administrator. This event is always recorded in the Audit Log.

Transaction codes

The following system-defined transaction codes support the service tax:

Service Tax - InsuranceService Tax - InsuranceAuto-adjustment code for procedures submitted to insurance. The tax percentage entered by the user is saved into this code. To display this code in the Transaction Code List window, select Automatic under Ledger codes to display.
Service Tax - PatientService Tax - PatientAuto-adjustment code for procedures not submitted to insurance. The tax percentage entered by the user is saved into this code as well. To display this code in the Transaction Code List window, select Automatic under Ledger codes to display.
Service Tax - Dental InsService Tax - Dental InsService tax code that is submitted to dental insurance. To display this code in the Transaction Code List window, select Dental codes under Ledger codes to display, and select Other from the ADA Dental codes displayed drop-down list.
Service Tax - Medical InsService Tax - Medical InsService tax that is submitted to medical insurance. To display this code in the Transaction Code List window, select Medical codes under Ledger codes to display.

Because these codes are system-defined, you can only edit certain aspects of a service tax code, such as abbreviation, description, comments, posting AutoLinks, and auto-adjustment on/off.

Beginning with the 2014 CDT code set, the CDT sales tax code D9985 will be used to post this tax on the patient ledger. For more information, see Using the Sales Tax CDT Code.

Employer/Plans

The Employer/Plan Definition window contains an Exempt from service tax option. This option is unchecked by default, but you can select it for an Employer/Plan that does not accept service tax charges.

Ledger interaction

The service tax is added as an automatic adjustment code, and it cannot be manually added to a patient's ledger; it is automatically calculated based on the procedures in the checkout ledger. As a new procedure is added to the ledger, the service is recalculated by first removing any previous service tax entry, and then calculating the tax for all procedures to which the service tax applies. After all the posted procedures have been processed, the running total is rounded to the nearest cent and added to the ledger as a service tax.

Three categories of service tax (ST) can be displayed on the patient’s ledger:

ST not submitted to insurance
ST submitted to dental insurance
ST submitted to medical insurance

All service tax codes submittable to insurance are displayed in the patient’s ledger marked as “Waiting to submit for primary insurance.” Service tax codes that go directly to the patient's account are displayed in the ledger as “Account” and are not marked as submitting to insurance.

Insurance claims: Paper and eClaims

Beginning with the implementation of the 2014 CDT codes, the service tax is printed as a line item on all claim forms, using the CDT code D9985.

There is no guarantee that insurance companies will accept the service tax claim amount.

Insurance claims: Service tax support

This feature is not available for all payors. Contact electronic services support for more information.

Reports

The service tax is reflected in the following reports:

Daily ReportDaily ReportEnsure that the A/R recap and Production details options are selected. The total service taxes are reported on the Daily Recap Sheet as the line item Taxes.
Periodic ReportPeriodic ReportEnsure that the A/R recap and Production summary options are selected. The total service taxes are reported on the Periodic Recap Sheet as the line item Taxes.
Daily Account ActivityDaily Account ActivityEnsure that the Show transaction details and Show production totals options are selected. The service tax charges are reported in the Taxes column.
Adjustment / Comment SummaryAdjustment / Comment SummaryFor the selected date range, the adjustment summary shows a breakdown of each service tax type (such as patient, dental insurance, medical insurance) in the Taxes section.

Patient’s printed ledger

Service tax charges on the ledger printout are displayed in the Net Adj column at the bottom of the printout.

When the Show all transactions option is selected, or when the Show transactions for the patient option is selected, all service tax transactions are included on the ledger printout.

When the ledger is filtered for a specific patient, and the Include procedures only option is selected, no service tax transactions are included.

Statements

The service tax is itemized on the patient’s walk-out and billing statements.