managing financial functions

Managing Financial Functions

  1. Identify procedures for payment on accounts.

Patient Check-In and Insurance Verification

  • Verify Patient Insurance Coverage

  • Confirm any co-pay or deductible amounts due at time of service

  • Check with insurance providers

  • Confirm coverage details

Billion and Coding

  • After services, assign accurate medical billing codes based on treatment

  • Medical coders ensure services are coded correctly

  • For reimbursement purposes

  • Mistakes in coding lead to delays in payment or claim denials

Generate Patient Statements

  • If there is an outstanding balance after insurance processing, prepare statements

  • Send to patients

  • Includes detailed info on services, costs, insurance contributions, and any due balance

Manage Payment and Set Up Payment Plans

  • Collect payments directly from patients

  • Can be in-office or online

  • Offer payment plans to help patients manage larger balances

  • Record transaction meticulously

  • Keep accounts accurate and up-to-date

Follow-up on Outstanding Balances

  • Send follow-up notices at regular intervals

  • Send accounts to a collections agency, (LAST RESORT)

Reconciliation and Reporting

  • Ensure payments received match services billed

  • Review accounts to detect any discrepancies

  • Monthly reporting

  • Insights into account status, collection efficiency, and financial health

  1. Identify procedures for and complete a balance sheet.

Balance Sheet provides snapshot of a facility’s financial standing by listing assets, liability,s and equity

Gather Financial Data

  • Collect records on assets, liabilities, and owner’s or shareholders’ equity

  • Includes cash, accounts receivable, accounts payble, equipment, property, loans, and any retaiend earnings

List Assets

Current Assets: Assets that can be converted to cash within a year (cash on hand, accounts, inventory, short-term investments)

Non-Current Assets: Long-term investments, property, equipment, and any intangible assets

List Liabilities

Current Liabilities: Debts due within one year, (short-term loans, accrued expenses)

Long-Term Liabilities: Obligations due beyond one year, (mortgages, bonds payable, or other long-term loans)

Calculate the Owner’s Equity or Shareholder’s Equity

  • Residual interest in assets after liabilities are subtracted

  • Healthcare - retained earnings, owner’s contributions

Ogrganize Information

  • Balance sheet have assets on one side, liability and equity on other side

  • Assets equal the sum of liabilities and equity for a balanced sheet

Double-Check Entries and Totals

Prepare Financial Statement for Review

  1. List procedures to bill patient

Patient Registration

  • Collect and verify patient info

  • Personal details, Inusrance info, Contact Details

Insurance Verification and Eligibility

  • Confirm patient’s insurance coverage

  • Co-pays, deductibles, pre-authorization requireements

Medical Coding

  • Translate healthcare services, diagnoses, treatemnts into standard codes (ICD-1), CPT, and HCPCS codes)

Charge Entry

  • Enter specific codes and charges for each service

  • Charges reflect healthcare facility’s fee schedule & patient insurance plan

Claim Submission

  • Submit claims to insurance providers

  • Electronically or via paper

  • Claim must meet payer guidelines

Payment Posting

  • Once payment is received from the insurer, post to patient’s account

  • Adjust account for co-insurance, deductible, or patient responsibility amounts

Patient Billing

  • Send detailed bill for outstanding balance after insurance

  • Clear information about sergices provided

  • Insurance coverage and balance due

Follow-Up and Collections

Reconciliation and Auditing

  • Auditing helps detect and correct errors

Reporting and Analysis

  • Generate reports on billing metrics, (claim acceptance rates, collection rates, and outstanding balances)

  1. Define procedures for processing past-due account

Identify Past-Due Accounts

  • Run regular reports on patient accounts

  • Track those past due date

  • Categorize them into 30, 60, 90, and 120+ day categories

  • Review account to confirm account owed and payment due date

Send reminder Notices

  • First Notice (30 Days Pst Due) - Polite reminder

  • Second Notice (60 Days Past DUe) - Slightly firmer reminder

  • Third Notice (90 Days Past Due) - Escalate to final notice, inform patient account may be forwarded to collection if payment is not received

Make Follow-Up Calls

Offer Payment Arrangements

  • For patients that are expressing financial hardhsip

  • Offer options

Apply Late Fees or Interest (If Applicable)

  • Apply late fee or interest o balance

  • Follow state regulations and facility’s polciies

  • Notify patients about additional charges

Send Final Demand Letter

  • Should outline total amount due, deadline for payment, and potential consequences


Refer to Collections Agency

  • Refer account to professional collections agency

  • Notify patient about it

  • Update patient record to reflect this

Monitor Collections Activity

  • Maintain contact with collection agency

  • Monitor the status of outstanding accounts

  • Recieve any payments or updates from agency

  1. Identify procedures for and make a bank deposit.

Prepare the Deposit

  • Gather Payments: Collect checks, cash, and payment

  • Endorse Checks: Stamp or endorse checks to ensure they are for “Deposit Only”

  • Calculate Total Amount: Use cash receipts log or financial software

  • Total amount for each form of payment

Complete the Deposit Slip

  • Fill out the Deposit Slip: Complete deposit slip, List cash and checks separately

  • Verify Totals: Double-check totals on deposit slip, daily payment log or receipts log

Record Deposit in Accounting System

  • Log Deposit: Record total deposit, document deposit slip number, individual amounts for cash and checks

  • Reconcile with Daily Log: Match deposit with daily receipts, Identify any discrepancies immediately

Transport to Bank Securely

  • Use Secure Transport: Assign staff member to deposit, or use security service for safe transport (LARGE CASH)

  • Time for Deposits: Make daily deposits or regular intervals

File and Retain Documentation

  • Retain Bank Receipt: Keep bank-issued receipts, in financial records for audit and reconciliation

  • File Deposit Slip: File a copy of deposit slip w/ bank receipt, daily cash log, and other records

  1. Identify procedures to open a new patient account.

Patient Information Collection

  • PHI: Full name, Date of Birth, Address, Phone #, Emergency Contact

  • Insurance Information: Collect & Verify, Provider Name, Policy Number, and Group Number

  • Medical History: Obtain basic health history, consent to request medical records if necessary

  • HIPAA Acknowledgment: Ensure patient signs a HIPAA form to confirm understanding and consent

Consent Forms and Documentation

  • Consent to Treatment

  • Financial Responsibility Agreement: Acknowledgement of responsibility for uncovered expenses and co-pays

Data Entry in Practice Management System

  • Enter Patient Details: Input collected data into practice’s management or EHR system

  • Assign Patient ID: Unique patient identifier

Verify Insurance and Eligibility

  • Insurance Verification

  • Pre-Authorization: Specific treatments, If required by the insurer

Create Financial Account

  • Billing Information Setup

  • Document Payment Preferences: Record preferences, explain billing cycles, provide options for auto-payment

Review and Confirm Details with Patient

  • Final Review

  • Provide Patient Access to Portal

  1. Identify procedures for reconciling a bank statement.

Gather Required Documents

  • Obtain bank statement for the period being reconciled

  • Access organization’s internal records

  • Check register, or ledger for the same period

Compare Deposits

  • Match deposit with deposit’s record in organization’s records

  • Verify dates, amounts, etc.

  • Record missing deposits on the internal records

Review Withdrawal and Payments

  • Check each withdrawal, payment, or check against organization’s financial records

  • Note checks tht have not been cleared

  • Mark them as outstanding

Identify and Address Discrepancies

  • Investigate differences between bank statement and internal records

  • Includes bank fees, interest earnings, and errors

  • Write reasons for discrepancies

Adjust Internal Records

  • Add bank charges, interest, or error to organization’s records

Calculate Ending Balance

  • Adjust organization’s ending balance

  • Accounting for outstanding checks and deposits in transit

  • Adjusted internal balance should match ending balance on bank statement

Document and Sign Off

  • Document reconciliation process in detail

  • Note adjustments made and found discrepancies

  • Supervisor review and sign off

  1. Process an accounts payable invoice.

Receive and Review the Invoice

  • Verify invoice has essential info (vendor’s name, date, invoice number, and itemized lsit of goods or services)

  • Check for discrepancies between PO (purchase order) and invoice

  • Include quantities and prices

Match Supporting Documents

  • Match invoice to supporting documents, PO, or receiving report

  • Confirm accuracy of goods/services and prices

  • Known as three-way match process

  • Note discrepancies and resolve them with vendor pior

Enter Invoice Detials into the Accounting System

Route for Approval

  • Forward invoice to authorized personnel

Schedule Payment

  • Determine payment terms

  • Schedule payment in accordance with the due date

  • Early payment discounts - take advantage

Process Payment

  • Check, Electronic Funds Transfer (EFT), or automated clearing house (ACH) transfer

  • Ensure payment amount, payee, and account details are accurate before releasing funds

Record and Archive

  1. Identify procedures to maintain a petty cash fund

Establish a Petty Cash Policy

  • Set fixed amount for petty cash fund

  • Depends on office’s needs

  • Define permissible expenses (small office supplies, postage)

  • Designate individual as petty cash custodian

Document Each Transaction

  • Every time funds are drawn, record transaction with petty cash voucher

  • Detail amount, purpose, date, and person responsible

  • Require recept for transactions

Reconcile the Petty Cash Fund Reguarly

Replenish the Fund as Needed

  • When cash balance is low, replenish fund by writing a check or use another payment method

  • Enter replenishment amount and total expenses into accounting system

  • Assign expenses to the correct accounts

Review and Audit the Fund Periodically

  • Have manager review petty cash records

Secure the Fund

  • Store petty cash in a secure location

  • Locked drawer or safe

  • Accessible only by authorized personnel

  • Limit access

  1. Identify common financial forms used in healthcare.

  • Superbill: Lists services provided to patients, Associated billing codes, For submitting insurance claims

  • Patient Intake Form: Collects initial patient info, For billing and reimbursement

  • Explanation of Benefits (EOB): Issued by insurance companies, Lists what was billed, how much the insurer paid, and the remaining balance the patient owes

  • CMS-15000 Form - Healthcare providers to bill outpatient and professional services to insurers (Medicare etc.)

  • UB-04 (CMS-1450) Form - Hospitals to bill insurance for inpatient and outpatient services

  • Invoice and Statement of Account - Sent to patients a detailed List of charges, payments, adjustments, and remaining balance due

  • Financial Hardship Application - For patients unable to pay in full, the form helps determine eligibility for financial assistance or payment plans

  • Advance Beneficiary Notice (ABN) - Medicare patients sign form to acknowledge that they understand certain services may not be covered by insurance

  • Daily Cash and Payment Reconciliation Forms