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Lesson12: Off-site payment, refunds and outstanding payment (Various…
Lesson12: Off-site payment, refunds and outstanding payment
Account types
Accounts receivable
What?
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after service is rendered to patient: bill is sent to respective 3rd party payor or patient requesting payment
if outstanding bills are not paid within a specific period, they will be termed as bad debts
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Working on AR
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Report should be stratified by: payer (patient balance vs insurance balance), age (patient balances over 90 days), balance amount (within a category, list accounts in descending order of balance owed)
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Finally: whatever system use to work on the AR, ensure that it covers each and every account
If healthcare institution unable to work on every other account even after prioritising the accounts, either:
- increase manpower to work on every account
- raise the write off limit (reduce number of accounts to collect)
Avoiding
most effective: collect charges at the time of service (all payment should be collected at the time of registration, before physician sees the patient)
Accounts payable: debts that must be paid off to another entity within a given period of time in order to avoid default. At corporate level, AP refers to short-term debt payments to suppliers and banks
General ledger: complete record of financial transactions over the life of a company. The ledger holds account information that is needed to prepare financial statements, and includes accounts for assets, liabilities, owners' equity, revenues and expenses
Profit and loss: financial statement summarising revenues, costs, and expenses incurred during a specific period of time - usually a fiscal quarter or year. These records provide information that shows the ability of a company to generate profit by increasing revenue and reducing costs
Various payment modes
Other payment modes:
- AXS
- SAM
- Singpost Payment Counter
- Cheers Payment Counter
- Online
- Internet payment
Cash
benefits:
- quick and easy
- transactions are completed immediately
- cash used for next transactions
constraints:
- physical counting and tallying needed
- stolen if improper security in safe guarding the cash
NETS/NETS CDA
benefits:
- transaction made electronically
- secured payment
constraints:
- unable to revert transactions once approved
- only can refund via cash or cheque
- processing fee applicable
Credit cards
benefits:
- guarantee payment
- allow instalment plans
- able to rectify if have error
constraints:
- possibility of fraud (payment by stolen credit card)
- processing fee applicable
Cheque
benefits:
- payee need not be present to make payment
constraints:
- takes time to process
- payment may be rejected if have errors or insufficient fund in payer acocunt
Issues with payment:
- reconciliation issue (payment amount may not tally with outstanding amount)
- delay in reflecting correct payment status (payment from other payment modes may take longer time to clear and the billing system may not reflect the correct payment status)
Card charging
Credit card: simple transaction process
- present credit card to merchant payment
- merchant accepts card and sends transaction details to payment processor
- processor forwards transaction details to credit card company's network
- card company routes transaction details to card issuer for authorisation
- issuer approves transaction back through the same channel
NETS
types of NETS:
- NETS EFTPOS (electronic funds transfer at point-of-sale) catapulted Singapore into the age of electronic payment --> enable bank customers to make purchases through point-of-sales payment using ATM cards
- CashCard: stored-value smart card (used in motoring market in Singapore)
- FlashPay Card: used for public transport payments and NETS acceptance points in Singapore
- eNETS: online payment through online and mobile merchants
Impact of company
- charges on the company
- delay in receiving money (reconciliation has to be performed for each payment method)
Refund
What?
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Various scenarios:
- return of medications (some institutions do not allow)
- service paid but not performed
- lapse in service provided (wrong diagnosis or wrong result)
- over charge of service rendered
- deposit balance from surgery
- duplicate payments (patient paid twice or 3rd party and patient paid for same service)
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Process
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Refund voucher (state reason for refund --> duplicate charges, using patient bill as supporting documents)
Medication refund note from pharmacy
Approval from supervisors and finance department
Issues
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Monitoring required: staff need to monitor different stages of refund (refund approved, cheque issued, system updated, cheque cleared)
Potential fraud: cheque being issued to the correct payee, patient may claim that they did not receive the refund
Reconciliation
Handover Reports
Business Office Assistant need to tally Handover Confirmation Report to the Vendor Trust Receipt and the amount credited to the bank account on a daily basis for cash payments
Also need to tally the Handover Confirmation Report to the bank statements of credit cards and NETS transactions
Discrepancy in Handover Confirmation Report: Assistant verifies discrepancy against the Close Counter Statement. Once verified: adjustments posted in the SAP system to clear it off
Record shortage: Business Office Assistant approach Cashier to top-up amount and some institutions need top-up for shortages more than a specific amount
Bank
Amount in Handover Confirmation Report tally with amount credited in bank, Business Office Assistant will perform clearing to the Main Bank account on a regular basis
Business Office Assistant will prepare the Bank Reconciliation monthly to be reviewed by the Supervisor & Executive
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Outsourcing
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Public healthcare like NHG and SIngHealth: certain functions are consolidated to Finance Shared Services (FSS) which processes for institutions under the same cluster
Eg. bank reconciliation (depends on institution), refund can be processed directly from the bank, payment posting outsourced to other financing companies, debt recovery, 3rd party billing
Issues:
- external parties may not have proper understandings of the business process of the institution
- any rectification required by the institution may take longer time
- decision to outsource may come from cluster and not necessary cost effective for all the institutions involved (NHG and SingHealth cluster consolidate some of the financial and human resource services)