They are not just for tax reasons. They are not just to keep the accountant happy. There is time critical reason too.
A remittance advice confirms the values that have been paid in respect of invoices submitted by the medical practitioner. It is a mistake to assume that the invoice will always be paid completely. It may not be.
For example and taking one remittance received by an MHM client.
Of the ten invoices paid on the remittance, four of them detailed deductions made. Deductions were made against the value of the invoice originally submitted. 40% in other words.
This is why remittances should be checked. And before they are stored for tax reasons or to keep your accountant happy.
In the above example, each invoice detailed on the remittance was reconciled against the appropriate entry on the consultant surgeons debtors ledger. Only then was the payment made recorded appropriately. It was then the number of deductions was immediately identified. In this example, the total came to some £350.
The next step is to identify why the deductions have been made.
Whilst all four deductions were correct and were in respect of excess amounts it is surprisingly common for a deduction to have been made in error.
In the recent past, one MHM client had an invoice for surgery deducted in full because the patient’s policy had expired and had not been renewed. At least according to the patient’s insurance company it had expired. It had done so after the date of the surgery. In this case at the precise date of the surgery, the policy as “live” and consequently the insurance company was wrong to decline the invoice for payment.
A call to the insurance company concerned quickly identified and confirmed the insurance company were in error and the invoice immediately cleared for payment. Insurance companies do make mistakes. Not many thankfully but they do happen.
If the deduction is correct, however, then immediate action should be taken to contact the patient and a request made for payment – by the patient – be made.
So the number and reasons why deductions have been made by a private medical insurance company can easily be identified and subsequently actioned on behalf of the consultant surgeon.