15.3 Patient Account Bookkeeping: Day Sheets, Posting & Reconciliation
Key Takeaways
- A charge is a debit that increases the account balance; a payment or an adjustment is a credit that decreases it — the fundamental rule behind every posting question.
- The day sheet (daily journal) records every charge, payment, and adjustment for the day, and the proof of posting must balance before the day is closed.
- A contractual adjustment writes off the difference between the provider's fee and the payer's allowed amount; it is never billed to the patient when the provider is participating with that plan.
- Patient responsibility is calculated as the allowed amount minus payer payment, consisting of any unmet deductible, copayment, and coinsurance — never the provider's full billed charge.
- Accounts receivable aging buckets claims and balances at 0–30, 31–60, 61–90, and over 90 days; a growing over-90 bucket is the earliest warning sign of a broken billing process.
Debits, Credits, and the Three Postings
Every entry on a patient account is one of three things, and each moves the balance in a defined direction.
| Posting | Accounting type | Effect on balance | Example |
|---|---|---|---|
| Charge | Debit | Increases | $250 posted for an office visit and an electrocardiogram |
| Payment | Credit | Decreases | $160 insurance payment; $30 patient copayment |
| Adjustment | Credit (or debit, if a correction adds back) | Usually decreases | $60 contractual write-off; professional courtesy discount |
A memory anchor that resolves most exam questions: charges are debits and increase what the patient owes; payments and adjustments are credits and decrease it.
A credit balance occurs when total credits exceed total charges — the account shows a negative balance because of overpayment or duplicate payment. A credit balance is refunded or applied, not quietly retained; holding an insurer's overpayment can constitute a compliance violation, and holding a patient's overpayment without disclosure is improper.
Financial terminology
- Accounts receivable (A/R): money owed to the practice by patients and payers. It is the practice's largest asset and the number the billing office manages daily.
- Accounts payable (A/P): money the practice owes to others — rent, supplies, payroll, malpractice premiums.
- Deductible: the amount the patient must pay each benefit year before the plan begins paying.
- Copayment: a fixed dollar amount due per visit, collected at the time of service.
- Coinsurance: a percentage of the allowed amount the patient owes after the deductible is met (for example, 80/20 leaves the patient 20 percent).
- Allowed amount: the maximum the payer recognizes for a service under the contract.
Calculating Patient Responsibility
This calculation appears on the exam more than any other financial item, and the trap is always the same: patient responsibility is computed from the allowed amount, never from the provider's billed charge.
Worked example. The practice bills $300. The payer's allowed amount is $200. The patient has met the deductible and has 20 percent coinsurance.
- Contractual adjustment = billed − allowed = $300 − $200 = $100, written off.
- Payer pays 80 percent of the allowed amount = 0.80 × $200 = $160.
- Patient coinsurance = 20 percent of the allowed amount = 0.20 × $200 = $40.
- Check: $100 adjustment + $160 payment + $40 patient = $300 billed. The account balances to zero.
If the patient still owed $50 of the deductible, the payer would apply the first $50 of the allowed amount to the deductible, pay 80 percent of the remaining $150 ($120), and the patient would owe $50 deductible + $30 coinsurance = $80.
The $100 contractual adjustment is never billed to the patient when the provider participates with that plan. Billing the patient the difference between the billed charge and the allowed amount is balance billing, which the participation agreement prohibits.
A participating provider bills $400 for a procedure. The payer's allowed amount is $250, the patient has met the deductible, and the plan pays 80 percent with 20 percent coinsurance. What does the patient owe, and what happens to the remaining balance?
The Day Sheet and Proof of Posting
The day sheet — the daily journal, historically the pegboard or "write-it-once" system — chronologically records every charge, payment, and adjustment posted that day, with columns for the previous balance, charges, payments, adjustments, and the new balance.
The daily posting workflow runs in a fixed order:
- Post charges. Enter each service rendered from the encounter form or superbill against the correct date of service and CPT code, which debits the account and increases the balance.
- Post payments. Enter each payment received — patient copayments and self-pay amounts collected at the desk, insurance checks and electronic funds transfers from the remittance advice — which credits the account and decreases the balance. Each payment is applied to the specific date of service it pays, never to the oldest balance by default, or the account will not reconcile against the explanation of benefits.
- Post adjustments and write-offs, including contractual adjustments taken from the remittance advice.
- Reconcile and close.
End-of-day reconciliation (proof of posting) verifies the day before it is closed:
- Total the charge, payment, and adjustment columns.
- Apply the balance equation: previous balance + charges − payments − adjustments = new balance.
- Reconcile the payment column against the actual cash and checks in the drawer and against the credit card batch settlement.
- Investigate any discrepancy before closing; posting an unbalanced day means the error is buried and must later be found across a full day's entries.
- Prepare the bank deposit, and confirm that the person preparing the deposit is not the same person who posted the payments.
That last point is separation of duties, the core internal control against embezzlement. One person posts payments, a different person prepares and makes the deposit, and a third reviews the bank reconciliation. A related red flag is lapping — applying a later patient's payment to an earlier patient's account to conceal a theft — which surfaces as chronic small posting delays and unexplained adjustments.
Aging and Collections
An accounts receivable aging report groups outstanding balances by how long they have been unpaid:
| Bucket | Interpretation |
|---|---|
| 0–30 days | Current; normal claim cycle |
| 31–60 days | Requires follow-up; unpaid claims are traced |
| 61–90 days | Escalating concern; appeal or rebill |
| Over 90 days | Serious; the hardest to collect and the strongest signal of a broken process |
A growing over-90 bucket usually reflects a process defect — claims rejected for eligibility or coding and never reworked — rather than uncooperative patients. Tracking unpaid claims is therefore an active daily task: run the outstanding claims report, identify claims with no response past the payer's turnaround time, verify receipt with the clearinghouse, and rebill or appeal within the payer's filing deadline. A claim that passes the timely-filing limit is generally unrecoverable and cannot be billed to the patient.
Patient collections
Itemized statements list each date of service, the service and code, the charge, payments and adjustments applied, and the balance due. Statements are typically cycled monthly, and a collection message escalates with the age of the balance.
Payment plans. The Truth in Lending Act (Regulation Z) requires a written disclosure agreement, signed by the patient, when a bilateral agreement provides for payment in more than four installments, even when no interest is charged. The agreement states the total, the number and amount of payments, the due dates, and any finance charge.
The Fair Debt Collection Practices Act (FDCPA) governs third-party collectors and sets the conduct standard practices generally follow: no contact before 8:00 a.m. or after 9:00 p.m. in the debtor's time zone, no contact at the patient's workplace once the collector knows the employer prohibits it, no threats or harassment, no false statements, and no disclosure of the debt to third parties. Contact must stop if the patient requests it in writing or is represented by an attorney.
Before an account goes to a collection agency, confirm the balance is accurate, that the claim was actually filed and adjudicated, and that no unposted payment or unapplied credit exists. Sending a patient to collections over a balance the practice failed to bill correctly is the most common and most damaging error in this workflow. Accounts referred to an agency are noted in the account, and further payments are handled through the agency per the contract.
At the end of the day the payment column on the day sheet totals $1,240, but the cash drawer and credit card batch total $1,180. What should the medical assistant do?
A patient agrees to pay a $900 balance in six monthly installments of $150 with no interest charged. What documentation does federal law require?