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Allowed Amounts & Invoicing At The Time Of Service

If you are in-network with an insurance company or you are just aware of what an insurance company allows for a particular billing code, then you can use Allowed Amounts to calculate patient responsibility as well as make your Accounts Receivable more realistic the time of service!

What Is An Allowed Amount?

An Allowed Amount refers to the predetermined price an insurance company allows for a particular procedural (CPT) code. Sometimes insurer Allowed Amounts are referred to as insurer ‘Contract Rates’ or ‘Fee Schedules’.

Every time you add a billing code to a purchase, Jane adds a billing code Allowed Amount within the appointment claim panel.

If you know what the insurer is going to allow, simply enter that amount as the billing code Allowed Amount! Note that each billing code (as well as billing code multiples) will have its own Allowed Amount box.

Why Use Allowed Amounts At The Time of Service?

If entered at the time of service, Allowed Amounts can be used to help calculate patient Coinsurance.

Patient Coinsurance % - as well as the entire visit’s invoicing - is calculated using billing code Allowed Amounts instead of billing code Billed Amounts (the rate your clinic bills insurance) since a patient’s coinsurance should be a percentage of what is allowed rather than what is billed to insurance.

Important Note: Entering Allowed Amounts at the time of service won’t affect your claim submissions!

Although Allowed Amounts do affect the invoicing in Jane, they are not considered in your claim submissions. Only your clinic billing code fees - Billed Amounts - will be used when generating claim submissions (Electronic EDI files or PDF CMS1500s).

What If A Patient Doesn’t Have Coinsurance?

Even if a patient doesn’t have a Coinsurance, entering Allowed Amounts at the time of service can help make your Accounts Receivable more accurate, and save you some time down the road when recording EOBs.

As mentioned above, Allowed Amounts affect visit invoicing. So, if you are billing an amount to insurance, but you expect to receive a lesser amount, you can alter the visit invoicing with Allowed Amounts at the time of service to reflect what you expect to collect.

Likewise, Allowed Amounts can save you a bit of time and manual entry once you’ve received a response from insurance. Allowed Amounts entered at the time of service automatically translate to the EOB screen.

Lastly, you can save more time by configuring default insurer Allowed Amounts when setting up your billing codes. Learn more about setting those defaults here.

Walking Through an Example

Please note this is the same example covered in the video at the top of this guide 👆

Let’s say we’re billing out two billing codes - $150 and $50 - to our UHC insurer. We know that UHC will allow $100 for our first code and $40 for our second code. We also know that our client has a 20% Coinsurance.

Before entering Allowed Amounts and Coinsurance, this is what this visit invoicing looks like:

Insurer Invoice: $200 (full amount billed to insurance)

Patient Invoice: $0

If you’d like to update the visit invoicing to reflect what you are actually going to collect (what the insurer allows for) oppose to the full amount you are billing insurance, then you can enter in the individual billing code Allowed Amounts - $100 and $40. Likewise, you can enter the patient’s 20% Coinsurance to calculate the patient responsibility.

Here’s what the visit invoicing looks like after you’ve entered Allowed Amounts and Coinsurance:

Insurer Invoice: $140 (Total Allowed Amount)

Patient Invoice: $28 (20% of $140)

The remaining $32 - the Unallowed Amount - is adjusted off in the background. This adjustment isn’t permanent, so if you end up getting paid more than you expected you can always adjust the Allowed Amounts when recording the EOB.For more information on recording EOBs, please have a look at this guide.

Lastly, note that the full $200 will be billed to insurance in your claim submission!

That’s it! All that’s left to do is bill the claim. 🙂

If you have any questions about these retired fields or anything else related to our refreshed insurance workflows we’d love to hear from you! Use the Help button from within your Jane account or email us at [email protected].

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