The Income Reduction payment type, also called 'Provider Payback' within CareStack, is a crucial feature to manage financial adjustments within your practice accurately.
Scenario: A patient had a crown done the previous month by one provider, but it now needs to be redone by another provider. Since the practice has been migrated from a different PMS to CareStack, the transactions will be migrated but will not be displayed in the patient ledger. The total payment for the redo treatment must be deducted from the previous provider, as the payment has already been collected.
Example: Let’s say the previous provider collected $1,500 for performing the crown procedure. To redo the procedure with the current provider, the fee is $1,000. Since the payment has already been collected, the $1,000 must be deducted from the previous provider. For this, a receipt must be created to reflect an income reduction of $1,000 for the previous provider, and another receipt of $1,000 should be created for the new provider.
Solution: To efficiently remedy this situation, practices can use the income reduction payment type to deduct a portion of the total amount from the initial provider and pay the rest to the current provider, if any.
|
Note:
|
Let's see how to create an income reduction payment type and apply it to payments.
Topics Covered
- Make an Income Reduction Payment
- Create a New Income Reduction Payment Type
- Results on the Patient's Ledger
Make an Income Reduction Payment
- Select the patient using the Global Search Bar.
- Hover over Billing > select Payments.
From the Add New Payment/Adj. (Add New Payment/Adjustment) tab on the Payments slide out:
- Select Regular Payment.
- Enter the required Payment Amount.
- For Payment Type, choose an 'Income Reduction' Payment Type.
- Choose the Provider for Income Reduction: Who performed the original procedure.
- This is because the payment is being taken from the previous provider.
- Select Add Receipt at the bottom right.
- The payment amount will be deducted from the previous provider as the amount was already collected from the patient. A new receipt has to be made for the new provider as well.
Create a New Income Reduction Payment Type
Here's how to create a new Income Reduction payment type:
- Navigate to the System Menu > select Practice Settings > Payments & Billing > General.
- Select the Payment Types tab.
- Click + Add Payment Type.
- In the Add Payment Type section, enter the Payment Type Name.
- Select Income Reduction as the Category.
Note: By default, the income reduction payment type will be listed in Patient Payments and it cannot be included in patient refunds. |
- Click Save to save your changes.
When you do another payment for income reduction, you will see the Income Reduction Payment Type that you have just created.
Results on the Patient's Ledger
Upon reviewing the patient's Ledger, you will observe a patient payment recorded as an Income Reduction. This indicates that it is not a real patient payment as illustrated in the current example.
Note: The following ledger entry effectively settles the remaining balance for the crown, meaning the patient is not liable for any payment for the redo. This also explains why the Income Allocation Report reflected a negative $1000, thereby deducting income from the provider who performed the initial crown. |
Practices can utilise this guide to learn how to apply the Income Reduction payment type to handle complex financial adjustments, ensure accurate provider payroll, and maintain financial integrity.