When more or less money is received than is currently owed for an invoice, AngelTrack has a set of rules for how the money is applied to the invoice's items.
This page gives additional details about AngelTrack's invoicing system. For an overview of invoicing in AngelTrack, please refer to the Invoicing Guide.
Pay Order
When you make a payment against an invoice, AngelTrack applies the money to the invoice's items in this order:
- Items whose payor (patient/facility/affiliate) still matches that of the invoice are paid before those where it doesn't; e.g. when paying a facility invoice, items whose payor = "Facility" will be paid before items whose payor has since been changed to "Patient" or "Affiliate" or "Insurance".
- Items that are not yet marked "Finished" are paid before those which are.
- Items that are older -- according to their date of service -- are paid before those which are younger.
This same order is reflected in the items list shown by the Invoice Close page when you click the "Pay only specific items in the invoice" linkbutton.
Not affected by parking
The payment of dispatches in an invoice, and the aforementioned handling of under- and over-payments, are not affected by parking.
That is to say, any payment applied to an invoice will go towards items even if they are currently parked. Any item paid in full will still advance to "Finished", at which time it will disappear from any parking lot.
Paying Only Certain Items
It is common for nursing homes to refuse to pay for certain trips on the invoice. They will say "We aren't paying for these, you must invoice the patient directly", or such like. The facility will send back the invoice with the objectionable items crossed out, and a check for the remainder.
In this situation, you can apply the payment to a subset of the invoice's items, using the controls on the Invoice Pay page, leaving the other items unpaid and thus ready to be re-invoiced during the next billing cycle.
Alternatively, you can permanently detach the items from the invoice, using the "Dispatches" tab of the Invoice Edit page. As you detach each item, AngelTrack will prompt you to change the Payor, in case you wish to move the detached items from the facility's invoice over to a patient invoice. As you detach each item, AngelTrack will check to see if it belongs to any other committed invoices. If it doesn't, then AngelTrack will automatically send it back to "Billing office" so that it can be picked up in the next round of invoices.
Partial Payment / Underpayment
Suppose the customer only pays half of a $1000 invoice. In this situation, you must decide whether to close the invoice (partially paid), or else leave it open in anticipation of additional payments.
Choose the ☑ Leave the invoice open, awaiting additional payments or credits option if either of the following are true:
- You anticipate receiving additional payments in the very near future, before the next invoicing cycle; or
- It is your policy to not reinvoice this customer for items that are carried forward. This type of policy is typically used for facilities and affiliates with whom you have an ongoing professional relationship, and where they want a single unchanging invoice ID against which to make payments over an extended time period... whereas you wouldn't do this for patients who must be continually reinvoiced.
In all other circumstances, select ☑ Close the invoice.
Whichever option you choose, AngelTrack will pay all the items it can using the monetary amount, following the pay order shown above. All fully-paid items will advance to "Finished". All items still unpaid will do one of the following:
- If you selected the ☑ Move back to 'Billing office' any unpaid, underpaid, and overpaid items, unless they belong to other open committed invoices option, then all unpaid and underpaid items will go back to "Billing office" to be reinvoiced during the next reinvoicing cycle, unless they are already sitting in other open invoices, in which case they will remain "Awaiting payment".
- If you did not select that option, then the unpaid and underpaid items will remain "Awaiting payment", as they wait for additional payments to arrive against an invoice.
Remember that AngelTrack tracks balances on a dispatch-by-dispatch basis, so it does not matter if an invoice is only partially paid, or closed unpaid, or cancelled, or edited. Every dispatch record has its own price and payment events that solely determine the balance due; invoices are just a convenience towards this end.
Ledger credits automatically applied
If a customer underpays an invoice, AngelTrack will automatically consume any credits sitting on the customer's ledger from prior invoices, so that it can settle both the invoice and the ledger all at once.
Any unconsumed ledger credits will remain on the ledger, carried forward to a future invoice.
Immediate writeoff / Courtesy discount
When underpaying an invoice, you have the option to give the customer a courtesy discount, immediately writing off the balances rather than carrying them forward or sending them to collections. Elect this option by checking the ☑ Write off the balance as a courtesy discount box when closing the invoice. If you choose this option, the customer's ledger will not be adjusted even if the invoice included a ledger debit or credit.
Be careful with discounts given to nursing homes and hospitals. If they refer Medicare or Medicaid patients to you, then a discount on their invoice might violate the Federal Anti-Kickback Statute. Read the Anti-Kickback Statute Primer to learn more.
To learn more about writeoffs, take a look at the Writeoffs Guide.
Overpayment
When processing an overpayment, you use the checkboxes on the Invoice Close page to direct AngelTrack to do one of the following with the surplus amount:
☑ Ignore the overage
This option instructs AngelTrack to do nothing with the overpayment, on the assumption that you (the Biller) will take care of issuing a refund on your own. AngelTrack will pay all items in the invoice at their correct prices, and ignore the overpayment.
You will also choose this option if applying a single check to multiple invoices, thus telling AngelTrack to apply only as much of the check as is needed to pay the invoice, so that you can apply the same check again to additional invoices until it's all used up. See below for instructions.
☑ Apply the overage to the ledger
The overpayment is added as a carry-forward credit on the counterparty's ledger. From there, it can be applied to their future invoices.
☑ Apply the overage to the invoiced items
This option instructs AngelTrack to apply the overpayment by overpaying items in the invoice, causing them to have refunds due, and therefore causing them to show up again in a future invoice.
AngelTrack follows this procedure for consuming the overpayment:
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Check all items in the invoice for prior overpayments (where the sum of amounts received exceeds the price), and if any are found, refund them as necessary. Any such refunds are credited to the payment amount that is to be applied.
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Iterate all items in the invoice, oldest first, applying the payment amount to pay each item at its current price, until the payment amount is exhausted.
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If any payment amount remains (an overpayment), iterate all items in the invoice again, looking for any that were invoiced for an amount higher than their current price. These are the items such as the example given above: invoiced for more than their final price turned out to be. For any such items, the payment amount is applied to overpay them up to their invoiced price. That way, a Biller who later reviews the overpaid items will understand why they were overpaid... and can then easily generate an invoice to refund all such overpayments.
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If any payment amount still remains, apply it all as a lump overpayment to the last (i.e. the youngest) item in the invoice, leaving it with a refund owing. It will then be automatically included as a credit item in the next regular invoice.
Applying One Check to Multiple Invoices / Bulk Invoice Pay
To apply a single check to multiple invoices, follow these steps:
- Select the first invoice and click Pay/Close to visit the Invoice Pay page.
- Input the full check amount as the Amount Paid, even though it will be too much. Also input the check number and review it to make sure there are no typos.
- Select the ☑ Ignore the overage option.
- Click the Save button to apply the check.
- Select the next invoice, click Pay/Close, and input the exact same information for the payment: Same date, same check number, same full check amount, and same counterparty (if any). You should then see AngelTrack identify the check already on file. It will display the remaining monetary amount of the check, which is the subtotal not yet applied to any receivables.
- If this is the last invoice you intend to pay with the check, then select the ☑ Apply the overage to the ledger, to carry forward any unused monies to future invoices; otherwise, select the ☑ Ignore the overage option again.
- Click the Save button and repeat for all remaining invoices.
The invoices you select must all have the same counterparty type (facility / affiliate / patient) or else AngelTrack will not be able to match the check. That said, the invoices can be for different counterparties, for example if you have one check to cover the invoices of several related business entities.
After you finish, AngelTrack's Check Register will then show the one check applied to multiple receivables in multiple invoices, as well as any ledger credits that were left over after the final invoice in the group.
Undercredit
Refunds are applied like payments: First, the refund amount is applied to any items that were paid more than the amount invoiced; then, to any items that were paid more than the current price quote; and finally, to any items that were paid at all. A refund will therefore square up all overpaid items first, and will then un-pay items (newest first) until the refund amount is fully applied.
Overcredit
An overcredit occurs when a refund check was issued, but the amount refunded exceeds the refund amount actually due. This situation can occur if there is a time lag between generating a refund invoice versus cutting the check; during that time lag, the price of an underlying item might change, and so when the check is eventually cut, it is cut for too much.
You can decide what AngelTrack does with the overcredit, by choosing one of the following options on the Invoice Close page:
☑ Ignore the overage
As with overpayments, you have the option to tell AngelTrack to ignore the overcredit, to simply apply credits wherever they will fit and then ignore the rest.
☑ Apply the overage to the ledger
The overpayment is added as a credit on the counterparty's ledger. From there, it can be applied to their future invoices.
☑ Apply the overage to the invoiced items
When applying an overcredit, AngelTrack performs the following steps, in order:
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Check all items in the invoice for overpayments (where the sum of amounts received exceeds the price), and if any are found, refund them as necessary. Any such refunds are added to the refund amount that is about to be applied.
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Iterate all items in the invoice, looking for any that have received more money than their invoiced price. For any such items, the refund amount is applied to underpay them down to their invoiced price. That way, a Biller who later reviews the underpaid items will understand why they were underpaid... and can then easily generate an invoice to re-bill all such underpayments.
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If any refund amount still remains, apply it as clawbacks to any items in the invoice that have received any payments whatsoever. The affected items are left with a balance owing; they will then be automatically included as payables in the next regular invoice.
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If any refund amount still remains, apply it all as a lump un-payment to the last (i.e. the youngest) item in the invoice, leaving it with balance owed (possibly a very large balance). It will then be automatically included as a payable in the next regular invoice.
Automatic Closure of Sibling Invoices
Whenever you close an invoice as "Paid", AngelTrack checks the counterparty’s other active invoices. These are called sibling invoices. If any sibling invoice has zero dollars owed for dispatches, and has zero ledger charge or has a ledger charge but the counterparty now has a ledger balance of zero, AngelTrack will automatically close the sibling invoice.
If you wish, you can disable this feature via a checkbox on the Invoice Pay page.