Kinn's Medical Assistant Ch. 22-26

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Last exam material

Account

a statement of transactions during a fiscal period and the resulting balance.

Account Balance

The amount owed on an account.

Account receivable ledger

A record of the charges and payments posted on an account.

Credit

An entry on an account constituting an addition to a revenue, net worth, or liability account; the balance in a person's favor

Credit Cards

Devices issued by a bank or other financial institution, retail stores, and other businesses that allow the card holder to make purchases prior to paying for them.

Debit cards

Cards that look like credit cards and by which money can be withdrawn, bills paid, or purchases made directly from the holder's bank account without the payment of interest.

Debit

An entry of an account representing an addition to a expense or asset account or a deduction from a revenue, a net worth, or a liability account.

Disbursements

Funds paid out.

Fee Profile

A compilation or average of physician fees over a given period.

Fee Schedule

A compilation of pre-established fee allowances for given services or procedures.

Fiscal Agent

An organization under contract to the government (as well as some private plans) to act as financial representatives in handling insurance claims for providers of healthcare; also referred to as a fiscal internship.

Instigate

To goad or urge forward; to provide

Medically indigent

Able to take care of ordinary living expenses but unable to afford medical care.

Payables

Balances due to a creditor on an account.

Pegboard System

An older method of tracking patient accounts that allows the figures to be proved accurate through mathematics formulas. Also known as write-it-once system.

Posting

Entering figures in an accounting system; transferring or carrying from a book of original entry ledger.

Preponderance

A superiority or excess in number or quantity; a majority.

Professional Courtesy

Reduction or absence of fees to professional associates.

Receipts

Amounts paid on patient accounts.

Receivables

Total monies received on accounts.

Secured

A loan or line of that is backed by a pledge of payment and usually obtained using collateral.

Transactions

An exchange or transfer of goods, services, or funds.

Trustee

A person to whom property s legally committed to be administered for the benefit a beneficiary or held by an administrator to be distributed to multiple individuals or businesses.

Unsecured

A debt that is not protected by collateral.

What is the primary concern of the medical profession?

Service of the patient

What is the medical assistants responsibilities in the medical profession as far as fees go?

Informing the patient about financial matters, billing insurance companies or other third-party payers, and sometimes making payment arrangements.

What are the physician's three commodities to sell?

Time, Judgement, and Services

Fee of Services

An estimate on the value of services

How are fees determined?

Length of time spent with the patient or by the treatment

What does a managed care contract mean for the physician?

It means that the physician has agreed to accept predetermined fees for specific services and procedures instead of the fee for service method.

How does the economic level of the community play a role in determining physician's fees?

Cost-of-living scales are considered when making set fee for an office.

What is a usual fee?

The physician's usual fee for a given service; the fee most frequently charged for the service.

What is a customary fee?

A range of the usual fees charged for the same service by physicians with similar training and experience who practice in the same geographic and socioeconomic area.

What is a reasonable fee?

The fee for an exceptionally difficult or complicated service or procedure that requires extraordinary time or effort by the physician.

Do third-party payers set fees for a physician?

Yes. They may provide a schedule of predetermined fees.

Name two types of third-party payers.

Medicare and Medicaid.

When is the physician's fee profile established?

When the fiscal agents for government-sponsored insurance programs and some private plans usual charges from each physician is complied and averaged over a given period, usually a year.

What is a fee profile used for?

In determining the amount of third-party liability for services under the program.

What may happen if a smaller fee is quoted and charged at a discount?

The lower fee can alter the physician's fee profile, Only the reduced fee can be recovered if it is necessary to bring litigation for payment, the insurance allowance may be reduced, the insurance company may take the position that the reduced fee is the physician's usual and customary fee and base its payment accordingly, and reducing fees and adjustments for professional courtesy may violate the physician's agreement with the third-party payer and could be considered fraudulent.

Insurance allowance

The amount amount of the reimbursement that the insurance company allows to be paid for a certain treatment or procedure.

When explaining costs to patient the physician or medical assistant must ____________.

Bring up the subject of payment and costs.

What is the purpose of advanced discussion of fees?

Helps the patient plan ahead for medical expenditures.

What is the guarantor's ultimate responsibility?

The entire bill, regardless whether insurance pays or not

Insurance Policies

Contracts between the patients and their insurance companies.

Why should the staff help the patient with insurance concerns?

The staff is almost always more knowledgeable about the insurance than the patient, by helping the patient collect from the insurance they are making sure the physician gets paid, the medical assistant will gain knowledge about the insurance industry by helping the patient at every opportunity.

Encounter Forms

Slips attached to the charts while patients are in the office.

What are encounter forms used for?

Billing purposes

What are some other names for encounter forms?

Superbills, Charge slips, Multipurpose billing forms

Business transaction

Occurrence of an event or of a condition that must be recorded.

What is an adjustment column used for?

Entering write-offs, disallowances by insurance companies, and other adjustments

What information should account cards contain?

Name and address of the guarantor, insurance identification, social security number, home and business telephone numbers, name of employers, and special instructions for billing.

Computer posting

Patient's name, date, diagnosis, and procedures are posted when the patient leaves the office. The database retrieves charges and posts them onto a computerized record and the accounts receivable ledger.

Manual posting

All charges and payments for professional services are posted to the ledger daily. A seperate card or page is prepared for each patient at the time of the first visit.

What are some examples of special bookkeeping entries?

Adjustments, credit balances, refunds, insufficient funds checks

Accounts receivable control

A daily summary of what remains unpaid on the accounts.

Name four ways that payment is accomplished.

Time of services, billing after making billing arrangements, insurance or other third-party billing, and billing and collection assistance.

Truth in Lending Act

Requires that individuals be given certain information when credit is extended

Fair Debt Collection Practices Act

Requires that debt collectors act fairly in their collection efforts; it also restricts how and when a person can be contacted about outstanding debt.

What is a computer-generated statement?

Patient accounts that are established and stored in the computer so they can be produced whenever needed. Provides information such as services rendered on each date, charges for each service, the date on which a claim was submitted to the insurance company, the date of payment, and balance due from the patient.

Cycle billing

Certain portions of the accounts receivable are billed at given times during the month, instead of preparation of all statements at the end of the month.

Why is professional courtesy less used today?

Because of the the managed care agreements.

Once-a-month billing

Billing that is paid at the first of the month

When is the only time a minor is responsible for their own bill?

If they are emancipated.

What are some persuasive collection procedures?

Telephone calls, collection reminders and letters, and personal interviews.

What are the common account aging categories?

0-30 days, 30-60 days, 60-90 days, and 90-120 days.

Between what times should you call to inquire about billing collections?

8am and 9pm

What are some special collection situations?

Skips, address change of service, claims against estates

Truth in lending statement

A statement that shows finance charges

Skip

A person that owes a balance and has moved or otherwise dropped contact without a forwarding address or phone number.

What are some advantages of small claims court?

Inexpensive, faster, no need for attorneys, no commission to collection agencies.

What percentage can collection agencies charge?

40 to 60%

What kind of balance results when an account is overpaid?

Credit balance

What is the term for the person responsible for a bill?

Guarantor

What does UCR stand for?

Usual, Customary, Reasonable

Disclaimer

A denial of responsibility; a denial of legal claim

Drawee

A bank or facility on which a check is drawn or written.

Drawer

The person who writes the check.

E-banking

Electronic banking via computer modem or over the Internet

Endorser

The person who signs his or her name on the back of the check for the purpose of transferring title to another person.

Holder

The person who presents a check for payment.

Maker

Any individual, corporation, or legal party who signs a check or any type of negotiable instrument.

M-banking

Banking through the use of a mobile device, such as cell phones or wireless internet services.

Negotiable

Legally transferable to another party

Payee

The person named on a draft or check as the recipient of the amount shown.

Payer

The person who writes the check in favor of the payee.

Power of attorney

A legal statement in which a person authorizes another to act as his or her attorney or agent.

Principal

A capital sum of money due a debt or used as fund for which interest is either charged or paid.

Reconciliation

The process of proving that a bank statement and checkbook balance are in agreement.

Uniform Commercial Code (UCC)

A unified set of rules covering many business transactions.

Online Banking

A means to perform banking services over the internet.

What are some other names for online banking?

Personal computer banking, home banking, electronic banking, e-banking, or internet banking.

What services does online banking include?

Checking account balances, transferring funds between accounts, paying bills electronically, determining if a check or transaction has cleared the bank, downloading account information, viewing images of transactions, applying for loans and trading stocks or mutual funds

What are some advantages of online banking?

Ability to bank at one's convenience, ability to bank anywhere in the world, saves time and expenses, comprehensive method of money management, and ease of use of online programs.

What are some disadvantages of online banking?

Learning software, less versatile than physical,service options are somewhat limited, possible slight risk in comparison to physical banking, some fees charged for various online services.

What is the number one reason for using online banking services?

Convenience

Check

A bank draft or to pay a certain sum of money payable on demand to a specified person or entity.

What makes a check negotiable?

Must be written and signed by a maker, contain a promise or order to pay a sum of money, be payable on demand or at fixed future date, and be payable to order or bearer.

Why are pin numbers assigned to debit cards?

For cash withdrawals and point of sale purchases

What are the different types of checks?

Bank draft, cashier's check, limited check, money order, traveler's check, and a voucher check

Bank draft

A check drawn by a bank against funds deposited to its account in another bank.

Cashier check

A bank's own check drawn on itself and signed by the bank cashier or other authorized official.

Certified check

The depositors own check that has been certified to be valid by an authorized official of the bank.

Limited Check

A check may be limited in the amount written on it and the time in which it may be presented for payment. Often used for payroll or insurance checks.

Money Order

A paper document that is purchased with cash and often used to mail money.

Voucher check

Contains a detachable voucher form that itemizes discounts, payable amounts, or other information

What year was the federal reserve created?

1913

What is the federal reserve?

Central bank of the US

Where does the ABA number appear on a check?

In the upper right hand corner

How many members are on the federal reserve?

7 Boards of governors

How many locations of the federal reserve are there?

12

What is a bank routing number?

A nine-digit code printed on the bottom left side of checks or other negotiable instruments.

What does the routing number identify?

Identifies the bank in which the check was drawn

What does the first two numbers of the routing number identify?

Federal reserve district where the bank is located

What does the third number of the routing number identify?

Particular district office

What does the rest of the number of the routing number identify?

The individual bank identification number.

What does the ABA number identify?

The area where the bank on which the check is drawn is located and the particular bank within that area.

Magnetic Ink Character Recognition

Common machine language that is printed at the bottom of checks

What are common types of accounts?

Checking, saving, interest-bearing, money market, individual

What are the three different types of checking accounts that a physician often requires?

An account for personal office expenses, an account for personal and family expenses, a high-yield interest-bearing account for funds reserved for paying insurance premiums, property taxes, and other seasonal expenses.

Interest

A change or payment in exchange for the use of money.

Overdrafts

A check that the bank covers and pays, whether or not a fee is charged

Overdraws

A check written for more than is on deposit in the account.

Stop payments

A depositor can rescind a check by placing a stop payment order on the check.

What are some reasons for stop payments?

Loss of check, Disagreement of a purchase, disagreement about a payment

What are four principal kinds of endorsements?

Blank endorsement, restrictive endorsement, special endorsement, qualified endorsement

Account payable

Debits incurred and not yet paid

Accounts receivables

Amounts owed to the physician

Accounts receivable trial balances

A method of accounting in which income is recorded when earned and expenses are recorded when incurred

Assets

The entire property of a person, association, corporation, or estate applicable or subject to the payment of debits.

Balance Sheet

A financial statement for a specific date that shows the total assets, liabilities, and capital of the business

Bookkeeping

The recording of business and accounting transactions

Cash basis of accounting

A method of accounting in which income is recorded when received and expenses are recorded when paid

Cash flow statement

A financial summary for specific period that shows the beginning balance on hand, the receipts and disbursements during the period, and the balance on hand at the end of the period.

Controls

A standard of comparison to make sure answers obtained are accurate.

Disbursements journal

A summary of accounts paid out.

Entry

A record or notation of an occurrence, transaction, or proceeding.

Equities

The monetary value of a property or of an interest in a property in excess of claims or liens against it.

In balance

The state in which the total ending balances of patient ledgers equals the total of accounts receivables

Invoice

A paper describing a purchase and the amount due

Liabilities

Things that are owed; debts

Petty cash Fund

A fund maintained to pay small, unpredictable cash expenditures.

Statement

A request for payment

Statement of income and expense

A summary of all income and expenses for a given period.

Subsidiary

Supporting other documents or records

Trial Balance

A method of checking the accuracy of accounts.

Accounting

A system of recording, classifying, summarizing financial transactions

What are the two general accounting bases?

Cash basis and Accrual basis

What is Cash basis?

Charges for services are entered as income when payment is received, and expenses are recorded when they are paid

What are Accrual basis?

Income is considered earned when services have been performed or goods have been sold, even though payment may not have been received.

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