Adjustment Definitions

As stated in the introduction, adjustment entry is closely related to payment entry. When applying an EOB from an insurance carrier, you will not only create and apply payments, but you will also create and apply various types of adjustments. We will examine the types of adjustments that can be posted, and when each type should be used.

Disallowed Amount Adjustment: Allowed amounts are defined as the amount insurance companies will base their compensation on. Disallowed amount adjustments are used to reduce the balance on charges that were billed at a rate higher than the allowed amount. If you are using Medisoft Advanced or Higher, this adjustment can be automatically calculated for you through the deposit list. If you are using Medisoft Original, or if you are applying your payments through Transaction Entry, you will need to manually calculate and enter this adjustment amount. The calculation used in determining the amount is (Billed Amount – Allowed Amount) x (-1). If your billed amount is lower than the allowed amount, it is definitely in your best interest to raise your prices.

Withhold Adjustment: Withhold adjustments are used to decrease the AR total on a patient’s account due to money being withheld by the insurance carrier on a previous EOB. Insurance carriers may withhold money due to prior overpayments. These overpayments do not necessarily need are not necessarily going to be for the same patient(s). For this reason, withhold adjustments are often combined with takeback adjustments.

Takeback Adjustment: Takeback adjustments are used to increase the AR total on a patient’s account due to money being withheld by the insurance carrier on a previous EOB. This type of adjustment is applied to the patient(s) who has charges that were overpaid by the insurance carrier. Takebacks are usually entered in conjunction with a withhold adjustment.

Deductible: Deductible entries are used to move the responsibility for a particular charge to the next responsible party without lowering the AR total. If a charge has been applied to a deductible, the patient is responsible to pay for the charge. For this reason you do not want to change the AR amount. You simply want to make sure the charge shows up on the remainder statement.


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One Response to “Medisoft Adjustment Definitions”

  1. Medisoft Adjustment Definitions | Medisoftvar's Blog on July 12th, 2013 1:35 pm

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