Best Practice Guidelines: Healthcare Practice Management

11. Receipting

Responsible Roles

Check the cash and card reconciliations every day. Make sure the correct personnel are responsible to bank the cash. Allocate the correct cash to the petty cash if the cash is used for day-to-day expenses. When a reconciliation is not complete or does not reconcile, the discrepancy must be investigated. Ensure that all ERAs were posted and are balancing with the bank account.

Receive all Patient payments: card and cash. The Cashier must allocate the payments to the correct accounts and print receipts for the patients where required. All cash and card payments must be reconciled every day. Bank the cash that was received for a certain period. When cash is used for day-to-day expenses, the cash must be given to the Practice Manager and allocated to the Petty Cash cash book before it is used for day-to-day expenses.

Allocate EFT payments to the correct patient accounts. ERAs must be posted on a daily basis but only when the amount is visible on the practice’s bank statements. ERAs that have not yet been received into the bank account of the practice, should not be posted, otherwise, there is no reminder to follow up on payments with Medical Aids that have not paid.

Purpose of Receipting

Receipting is the function used to allocate payments made by Patients and/or Medical Aids.

There are three types of receipts, namely Patient Receipts (private payments), Medical Aid Receipts (remittance advice to be captured by hand) and Electronic Remittance Advices (ERAs) (remittance advice received electronically from Medical Aids and imported into the software). A patient’s account can reflect both Patient Outstanding and Medical Aid Outstanding amounts.

The function to be used in the software to capture receipts will depend on whether the patient or the Medical Aid makes the payment.

Critical Steps of Receipting

Preliminary remarks

Cashflow = Receipts - Receipts written back - Refunds.

Receipting will increase the cash flow figures on the debtor transaction drill-down report (daybook report) and will increase the amounts in the relevant cash books (eg EFT cash book, card transaction cash book and cash cash book). These cash books should be reconciled daily with the cash register/tin, the card summary slip and the bank statements to make sure all money has been received in the bank account.

Receipting will also decrease the patient's outstanding account, leaving only the balance, if any, to be collected via the age analysis or other debt collection process.

After a patient’s invoice has been sent to the Medical Aid, the Medical Aid will respond with an indication whether the full claim amount is accepted or rejected or whether only specific codes are accepted or rejected.

If a whole claim or some specific code(s) of a claim were rejected by the Medical Aid, the patient will be liable for the outstanding amount. The Cashier will collect payment as soon as possible from the patient and allocate it correctly to the patient’s account. Due to the real-time switching capability to most Medical Aids, the Cashier is able to see what the patient should pay before he or she leaves the practice to fully settle the outstanding account.

Item Level and Invoice Level Allocations

Receipts can be posted on an Invoice Level or Item Level, depending on the practice’s needs.

Invoice Level allocation will allocate the total receipt amount on the invoice as a total. This function allocates the amount to the entire outstanding invoice. This is only advisable if it is a cash practice and the patient always pays before leaving.

Item Level allocation will allocate the items on the receipt to each invoice item/invoice line by matching the procedure and stock codes. This function thus allows the practice to allocate each amount to the specific outstanding items, so that rejected items/codes can be communicated to patients for collection. If patients want to follow up rejections with their Medical Aids, they have the necessary information available.

Cash Books

Receipts allocate payments to cash books. Cash books can be configured to indicate the methods by which patients and Medical Aids have paid and allow the practice to reconcile the different types of payment methods to the card machine, cash or bank statements. 

All patient receipts will be allocated to one of the cash books depending on the method the patient used to pay their account, eg cash, EFT or by card payment.

For more information on the cash books and reconciliation of the cash books, please refer to the Healthcare Management Internal Controls book and Accounting course in GoodX.

Patient Receipt

A Patient Receipt will allocate the amount to the Private Outstanding side of the account. This will confirm that the payment was made by the patient. The cash book will indicate the payment method and the receipt can be done on Item Level or Invoice Level.

Medical Aid Receipt (Desktop App) and Remittance Advice (RA) (Web App)

A Medical Aid Receipt will allocate the amount to the Medical Aid Outstanding side of the account for invoices that were submitted to the Medical Aid. This will confirm that the payment was made by the Medical Aid. A Medical Aid Receipt will be used for Medical Aids that don’t have the ERA functionality and practices that are not using the ERA function. The cash book will indicate the payment method and the receipt can be done on Item Level or Invoice Level.

The Remittance Advice (RA) function in the Web App will be used to build a remittance advice in the software that will reflect the hard copy that was received from the medical aid.

Cash Register

Patient Receipts can also be done from the Cash Register module, which allows the practice to have more control over cash in the practice. The Cash Register module works with sessions and after each session, a cash-up must be done and the Practice Manager should do a reconciliation of the money before it is sent to the bank or moved to the petty cash. The Cash Register is a function that can be used to control cash and card payments.

Electronic Remittance Advice (ERAs)

ERAs save a lot of time and leave less room for human error in the capturing and allocation of payments received from medical aids. Manual interventions are few and the time saved with the ERAs can be better used to do debt management or other necessary tasks.

ERAs are electronic documents that are received from Medical Aids and imported into the system to indicate which accounts and line items were paid and which accounts and line items were rejected. ERAs are used to allocate payments from Medical Aids to patient accounts per line items.

Take note: ERAs must only be imported and posted when the payments have been confirmed by checking the practice’s bank account and not upon receipt of the ERAs.

Refunds (Desktop App)

Refunds are done when a patient has overpaid their account, or if both the patient and Medical Aid has paid for the same invoice.

Take note: Before making refunds to Medical Aids, check first whether the Medical Aid will deduct the overpayment from the next remittance payment that the practice will receive. 

Refunds will create a positive amount in the patient’s account. Make sure that the bank details are correct before effecting the refund. When a refund must be done, the payment must be marked as a cash payment or an electronic payment, depending on the method used. Remember to use the Payment to Patient function in GoodX to indicate that there was a refund.