Write-offs are a common and necessary part of the EMS billing and reimbursement cycle. As an accounting practice, they adjust the accounts receivable balance for a multitude of reasons. This blog will define several of the most common write-offs in the EMS revenue cycle.
A contractual allowance indicates that a payer has a contract in effect stating the amount they will pay for a service. Governmental payers such as Medicare and Medicaid establish the reimbursement rates they will pay. In almost all cases, the EMS agency charges more than the contracted rates these payers have in place. The difference between what the EMS agency charges, and the payment amount stated in the contract must be adjusted through a “contractual allowance” write-off.
Billing rates and discount practices are mainly at the discretion of the EMS provider. That includes whether residents of the city are given special consideration. City-based or municipal EMS agencies with resident-specific policies may use a resident write-off to adjust the accounts receivable balance for their residents’ runs.
EMS subscription or membership programs are also at the EMS provider’s discretion. These programs allow households and businesses to pay an up-front, established fee to offset any future emergency medical transport expenses. EMS agencies that offer subscription programs must use a membership write-off to adjust the accounts receivable balance for members’ runs. Read here about the pros and cons of EMS subscription programs.
Bad Debt Write-off
Bad debt allowance represents an estimated amount a patient can’t or won’t pay from his portion of the bill. These write-offs exist to adjust the difference between the entire patient portion of the bill and the actual amount the patient paid. EMERGICON uses a Bad Debt Write-off once a balance is considered uncollectable. The EMS provider sets the timeline to consider the balance uncollectable.
Charity Care Write-off
Government programs – like the TASPP – allow EMS providers to implement a charity care policy within their service area. These policies define their charity care service and enable them to annul charges associated with providing care to individuals who reasonably cannot pay EMS bills. When applying for these government programs, charity care write-offs are part of the information that is submitted in pursuit of the reimbursement funding the EMS agency may receive from the program.
Patient Negotiated Discount
EMS providers can allow billing companies to offer a specific percentage discount for patients, whether they are responsible for the entire bill or not. In these cases, Patient Accounts enter the scene to negotiate payment options with patients. The patient-negotiated discount results in a fully paid bill that satisfies the account receivables balance on the run.
EMERGICON’s teams are experts in managing write-offs during the billing process. If you have questions, contact our EMS & Client Hotline: 866-839-3671 | email@example.com.