The concept here is what to do with any balance remaining AFTER the insurance payment has been posted. Is the remaining balance transferred to patient responsibility, that is, should the patient pay it? Or is the remaining balance to be written off? Or should there be a split where some portion is transferred and the rest is written off?
In many States, the patient MUST pay 100% of the money the insurance did not pay. If the practice writes it off, it may be considered fraud or a 2 tier billing scheme, both of which are illegal. If the practice is located in one of these States, make sure the Transfer% is set to 100 for all patients.
In other States, there is the option of, or possibly even the requirement, to write-off anything not paid by the insurance company. If the full amount of the remaining balance is always to be written-off, then set the Write-Off% to 100 for the patients it applies to.
And then there are Federal considerations. Medicare considers discounts and write-offs to be “gifts” and it is illegal or fraudulent, at least for Medicare patients, to give gifts in excess of $50.00 (yes, fifty dollars) per year.
Depending on your State’s law, and how the practice is run, there is the ability to set these boxes to automatically apply the transfer and write-off. Transfer% is the percentage that will be transferred into the patient’s responsibility. Write Off% is the percentage that will be written off. The combined amounts of these two fields must total 100%. As payments are posted in the Insurance Posting window, there will be prompts to apply these amounts after posting insurance payments to this carrier.