Chapter 45: managing practice finances

What is accounts receivable?

Money owed to the practice

What is accounts payable?

Money the practice owes

Who specifies the charges and which level of service for charges of a patient's visit?

The physician

In order to bill the insurance company, each service requires what type of codes?

Procedure and diagnosis codes

What is a patient account ledger?

A cumulative record of charges and payments

What are the four ways a patient makes payments for services performed?

1. At the time of service, in full or in part

2. Through the mail in response to a bill

3. Online payment through the medical practice website or the online patient portal

4. Insurance company may make a payment either by mail or, usually, by electronic transfer.

What is a credit?

A posting that is subtracted from an account balance.

What are some examples of a credit adjustment?

• discounts for payment at the time of service

• professional courtesy discounts

• discounts given to insurance companies

At the end of the day, the day is "closed". What does this mean?

No further transactions are allowed for that day

Insurance usually does not cover what type of procedure?

Elective cosmetic surgery

What might a money market account be used to pay for?

• To hold money for regular but infrequent expenses, such as quarterly, semiannual, or annual payments for malpractice insurance

• Licenses for physicians and other licensed professionals on the staff

• Dues to the state, county, or local medical association or chamber of commerce.

What is a cashier's check?

A check drawn on the bank itself rather than on an individual account

What is a reason an office might use this?

A cashier's check is considered more reliable than the check of an individual or business

e.g: This might be the case if the office were purchasing a large piece of equipment for which the seller is unwilling to accept a simple business check.

What is the MICR line and where is it located on a check?

A line of numbers containing the American Bankers Association transit routing number and it is across the bottom of checks

What is the ABA routing number?

The unique number of the bank

What should the MA beware of before accepting a check for payment from a patient in the office?

• Look at check carefully and avoid accepting a phony check

• Make sure that the date and amount of the check are correct

• Never accept third party check

When accepting a credit card payment from a patient in the office, what should the MA verify?

Patients name and signature

What is the cash drawer and what is it used for?

Drawer with compartments for bills of different denominations and is used to give change for cash payments

When preparing for a bank deposit, this type of endorsement can be entered on a check using what?

A stamp approved by the bank that includes:

• The words deposit only

• Physicians name or practice name

• Bank account number

What is reconciling a bank statement?

Making sure that the balance in the checkbook and the balance on the bank statement equal each other