Medical Billing Software Patient Billing & Account Management 2 — Questions and Answers
Question 1: When should a small balance write-off policy be applied in medical billing?
- When a patient requests any discount on their account
- When the cost of collecting an amount exceeds the value of the outstanding balance (Correct answer)
- When a patient has not paid within 30 days of statement receipt
- When an insurance claim has been denied once
Correct answer: When the cost of collecting an amount exceeds the value of the outstanding balance
Small balance write-off policies are applied when the administrative costs to pursue and collect a balance outweigh the actual amount owed.
Question 2: What information is typically included in a patient's account ledger?
- Only the primary diagnosis code for each visit
- All charges, payments, adjustments, and balances for the patient's account (Correct answer)
- Insurance contract fee schedules and allowable amounts only
- Only insurance payments received on the patient's behalf
Correct answer: All charges, payments, adjustments, and balances for the patient's account
A patient ledger is a complete chronological record of all financial transactions including charges, payments, and adjustments for a patient's account.
Question 3: What does 'balance after insurance' (BAI) mean on a patient account?
- The total amount originally billed to the insurance company
- The remaining patient responsibility after the insurance has paid its portion (Correct answer)
- The amount the provider writes off due to contractual obligations
- The insurance company's total cumulative payment for all claims
Correct answer: The remaining patient responsibility after the insurance has paid its portion
Balance after insurance is the remaining amount the patient owes after insurance payments and contractual adjustments have been applied to the account.
Question 4: A patient account has been unpaid for 120 days. The practice decides to send it to a collection agency. What typically happens to the patient's account in the billing software?
- The balance is written off entirely with no further action
- The account is flagged and the balance is transferred to the collections module (Correct answer)
- The account is automatically submitted to a secondary insurance carrier
- The patient is permanently removed from the practice management system
Correct answer: The account is flagged and the balance is transferred to the collections module
Accounts sent to collections are typically flagged in the billing software and transferred to a collections workflow while the balance remains outstanding.
Question 5: What is the purpose of sending patient statements at regular billing cycles?
- To satisfy insurance carrier reporting requirements
- To keep patients informed of their balances and prompt timely payment (Correct answer)
- To document medical necessity for services rendered to the patient
- To request insurance authorization for the patient's future visits
Correct answer: To keep patients informed of their balances and prompt timely payment
Regular patient statements keep patients aware of their financial responsibility and encourage timely payment of outstanding balances.
Question 6: Which of the following best describes a 'contractual adjustment' on a patient account?
- A penalty charged to the patient for late payment of a balance
- The difference between the billed amount and the insurance-allowed amount that is written off (Correct answer)
- A discount given to patients who choose to pay in cash at the time of service
- A charge added to the account for administrative processing fees
Correct answer: The difference between the billed amount and the insurance-allowed amount that is written off
Contractual adjustments represent the portion of a charge that the provider agreed to write off as part of their contract with the insurance company.
Question 7: How does a patient portal benefit the billing and collections process?
- It allows insurers to adjudicate claims faster without paper
- It enables patients to view statements, make payments, and update account information online (Correct answer)
- It eliminates the need for patient co-pays at the time of service
- It automatically submits claims to secondary insurance upon login
Correct answer: It enables patients to view statements, make payments, and update account information online
Patient portals give patients 24/7 access to their billing information and enable online payments, improving collection rates and patient satisfaction.
Medical Billing Software Patient Billing & Account Management 2
When should a small balance write-off policy be applied in medical billing?