If your office receives insurance payments by capitation instead of fee-for-service, you may have to take additional steps to enter this information in MacPractice. Capitation is a system of payment to medical service providers determined by the number of patients seen. Under a capitation system, healthcare service providers are paid a set amount for each enrolled person assigned to that physician or group of physicians, whether or not that person seeks care, per period of time. Please contact your insurance carriers if you need additional information about capitation plans. Since a capitation check is one large sum paid to the provider or office, it should not be applied to a single patient's account. You will need to create a system in your office for entering checks, applying payments as needed and tracking capitation payments as it is being used in your office. This document will walk you through one possible method for managing these capitation payments.
Capitation - Setting Up Capitation: References
Before you can begin to enter capitation payments in your patients' ledgers, there are a number of items that must be configured in References.
- Create a new Payment Type called "Capitation" or "Capitation Check"
- Create new Adjustment types called "Capitation Monthly Total", "Capitation Loss" and "Capitation Write-off"
- Create two zero dollar fees, either under your existing fee schedule, or under a special "Capitation Administrative Codes" schedule:
- Capitation Monthly Total
- Capitation Profit
- There are some additional optional items you can add in order to help you track your capitation accounts:
First, you will need to create a new account called "Capitation", or something similar. This is the account where you will post your capitation payments when they are received.
If you created a Capitation fee schedule, associate your capitation patients to this fee schedule. If you also created a Capitation Financial Status, you will need to set this under the Account tab of the patient's record.
You can also track patients in the Capitation Plan by using other classifications, such as account alerts, patient alerts, or color labels. For more information on setting up these classifications, click the below links:
Capitation - Billing the Patient Account
When a patient come into the office and you participate with a capitation plan, you will need to enter all procedures that have been performed as you would with any other patient you have seen in the office. This ensures you will be able to create claims and track your providers' production properly. After the procedures have been entered you will need to write-off this amount per the Capitation Plan process. Go to the Other menu and select New Negative Adjustment.
In the negative adjustment window enter the full amount of the procedure(s), then select the Capitation Write-Off in the Adjustment Type pop-up menu (or whatever adjustment type you created for this process). Apply the amount to the procedures to zero out the balance.
Once you save the negative adjustment, a new line item will appear on the patient's ledger.
With the capitation information entered and written off, you need wait for the payment from the capitation plan to arrive if it has not already. If the payment has been received proceed to the capitation account to continue the process.
Enter the check number and amount, then save your payment. This will create an unapplied amount on the ledger.
When the patients that are enrolled with your capitation payer come in for treatment, you will need to get a total of all procedures that have been performed and written off from their ledger. This can be obtained by running your Negative Adjustment report located under the Accounting/Financial node of the Reports ability.
In the capitation account, select New Charge from the Charge menu, and make sure to select the Fee Schedule that contains the capitation fees you created. Enter your capitation code. In this example we are using 999 - Monthly Capitation Total. Leave the unit fee at 0.00 and save your procedure. Select the capitation fee in your ledger, go to the Other menu and select New Positive Adjustment. Enter the total you obtained from the Negative Adjustment report as the adjustment amount, select the Adjustment Type and save the positive adjustment.
After saving the adjustment, double click on the unapplied amount line item in the ledger. This will open the payment window, allowing you to apply the payment. When you save your payment, the unapplied amount will be reduced.
An Unapplied Balance = Profit
If after you have entered your positive adjustment and applied the unapplied amount, the capitation account still has an unapplied amount, this amount equals a net gain for your office. For accounting purposes, you will still likely want to address this unapplied credit. In order to apply the remaining unapplied amount, you will need to create a new charge.
After saving the positive adjustment, double click on the unapplied payment line item and apply the remaining balance to the positive adjustment. This process will zero out the Capitation account balance and show a Capitation Monthly Total-Profit line item in the ledger.