Taxes, Collections, and Writeoffs

AngelTrack tracks each individual dispatch until it is fully paid, no matter how long that takes. This tracking can be switched off when receivable balances are sold to a collections agency, or written off on your taxes.

How the Balance Due is Calculated

How the "Balance due" is calculated depends on whether or not the call was covered by insurance.

When an insurance carrier has not adjudicated a price, then the balance due is a straightforward calculation:

$ 1500.00 Price quote
$ + 20.00 Service charges
$ − 5.00 Discounts applied
$ − 1425.00 Payments received
$ 90.00 Balance due

Service charges and discounts are voided by a "Price allowed"

When insurance is claimed, the insurer has the authority to set the final price for the service, overriding any other agreement or contract in play. This is true the moment the insurer acknowledges coverage, even if the insurer does not then pay any benefits (owing to a deductible).

It also binds any collections agency that you sell the receivable to.

AngelTrack knows this, and so the "Price Allowed" field will -- if set -- always override the "Price Quote" field:

$ 1500.00 Price quote
$ + 20.00 Service charges
$ 5.00 Discounts applied
$ 360.00 Price allowed
$ − 315.00 Payments received
$ 45.00 Balance due

When the insurer returns an EOB that acknowledges coverage, the EOB will include the adjudicated price. This is true for paper EOBs as well as EDIs. AngelTrack stores that adjudicated price in the "Price allowed" field. At that moment, all service charges and discounts become void, in keeping with insurance contract requirements. In other words, once the insurance company determines an allowed price, you may not charge the insurer or the patient any other price.

If necessary you can clear the "Price allowed" field, and revert to regular pricing. Discounts and service changes will then apply again.

Bulk clearing the "Price allowed" during facility invoicing

Your facility contracts will usually stipulate a fixed price schema that overrides any adjudications from insurance carriers. The Invoice Generator for Facilities has a ☑ Clear any insurer adjudicated prices checkbox to automatically clear all such adjudications during invoice commit, so that the facility's price schema will prevail.

Invoices are Used to Sell Receivables to Collections

Invoices are used to quickly record the event of selling a batch of receivable dispatches to a collections agency.

To do so, create an invoice in the usual way, taking care to include only those dispatches that are to be sold. Remember you can add and remove individual dispatches from an invoice, one at a time, once the invoice is created.

Commit the invoice once you're happy with it, so as to pull all of its dispatches out of the  Billing office , and set their price quotes as necessary.

Next, use the invoice's Close link as if paying it normally. On the subsequent Close Invoice page, select the "Sold to Collections" radiobutton at the bottom-left. Then click the "Save" button and you're done.

All items in the invoice will be moved to  Finished , causing them to exit any billing queues they may be waiting in. Any nonzero balances will thereafter appear as writeoffs in AngelTrack's tax and revenue reports.

Transferring data to the collections agency

The collections agency will ask for a spreadsheet of the receivables to be collected. AngelTrack already knows how to provide all the information they will need.

The Invoices List will prepare the data export for you. Simply tick the checkbox next to each sold invoice, then click the "Export data for collections" item in the "Bulk Operations" box.

AngelTrack will download a .CSV document to you containing all the necessary information. The document opens in Microsoft Excel™ or in Google Sheets™. From there you can make any necessary edits, and then send it onward.

If your collections agency requests additional data -- something not already included in the .CSV -- then you can add it yourself... or, contact AngelTrack Support. Additional data columns can be easily added to the export as necessary.

Selling many invoices at once

If you need to do sell many invoices to collections at once, then use the "Bulk Operations" toolbox on the Invoices List page. After selecting multiple invoices from the list, you can mark all of them as "Sold" with the click of a button, then one more click to export all of their collections data.

AngelTrack will download to you a consolidated .CSV spreadshet containing all dispatches in all selected invocies, with duplicates automatically removed. The spreadsheet contains all the information needed by the collections agency.

Implementing a reinvoicing and collections workflow

AngelTrack's design includes a workflow for invoicing your counterparties a certain number of times, then giving up and selling the receivables to collections.

To learn how to implement it, read the Weekly/Monthly Reinvoicing Guide.

Tax Calculations

AngelTrack can quickly provide you with the data needed to close out your books and file your taxes. The Taxes and Commissions Calculator has a powerful range of filters, for calculating taxes and/or sales commissions over any date range and over any type of service.

AngelTrack's tax calculator produces four important subtotals for you:

Depending on how much Medicare/Medicaid work you do, your contractual adjustment can be enormous.

Your accountant will decide whether or not the contractual adjustment has useful tax implications. If your accountant is not aware of the potential benefits of the contractual adjustment, then consult an accountant who specializes in healthcare accounting.

A simple example

Suppose you run exactly one stretcher call with 10 miles transport. At your retail price of $1500 + $5 per mile, the charged amount will be $1550.

Medicare covers the call, but only pays $250 + $5 per mile, for a total benefit of $300. The contractual adjustment is therefore $1550 - $300 = $1250.

Medicare cuts a check for $260, leaving a $40 copay for the patient. Suppose the patient only pays $10 and then stops responding. That means your payments received is $260 + $10 = $270. Your cash writeoff is therefore $300 - $270 = $30.

Finally, suppose you sell the $30 balance to collections and receive $5 for it. AngelTrack doesn't know you received $5 for it, so it will still report a total cash writeoff of $30. Your accountant must subtract the $5 received from collections before calculating your final taxes, which should therefore be:

$ 1550 Charged amount
$ − 1250 Contractual adjustment
$ − 270 Payments received: as reported by AngelTrack
$ − 5 Payments received: sale to collections, booked separately
$ 25 Cash writeoff

Finished dispatches only

The writeoff report looks only at finished dispatches. Any dispatches still somewhere in the workflow are excluded because they may eventually bear more fruit.

Accounting for the proceeds of a sale to collections

When a receivable is sold to collections, AngelTrack's records will still show a balance owing, calculated according to the rules given above. That balance -- the debt purchased by the collections agency -- is what shows up in the "Total cash writeoff" field of the Taxes and Commissions report.

As noted above in "A simple example", AngelTrack does not know how much you received from the collections agency. Those amounts must be entered into your books separately, as an offset to the value given in AngelTrack's writeoff report.

Other caveats

Remember that the writeoff calculator's output is only as good as its input: it can only report on the data that AngelTrack possesses. So, if you are using a detached biller and are not entering all of your EOBs into the system, then AngelTrack cannot be used to calculate your revenues and taxes.

Also, take care in choosing the report's filters. Before settling on a final set of numbers, try ticking the ☑ Include dispatches that have not yet finished billing checkbox to see if the numbers change. If they do, then you've still got applicable monies moving through the postprocess workflow. Those items will need to be hunted down and resolved before finalizing your revenue and tax numbers.


A writeoff occurs whenever you advance a dispatch to  Finished  while it still has a balance due.

Simplest view of the workflow

That's it. You need not take any other action to write off a balance due. And you can undo your decision at any time in the future, by pushing the dispatch back into the postprocess workflow.

Because the dispatch is marked  Finished  while not fully paid, the balance will thereafter appear in AngelTrack's tax and revenue reports as a writeoff. Remember that your books must eventually reflect (as cash received) the proceeds of the sale to collections -- a monetary amount not recorded by AngelTrack.

Writeoffs must have a price quote or a price allowed

Because writeoffs have important tax benefits, AngelTrack requires them to have a price quote... or failing that, a price allowed. This permits the tax and revenue reports to calculate the amount that was written off.

In deference to this requirement, the postprocess advance button  →  is disabled when a dispatch is  Awaiting payment  yet has neither a price quote nor a price allowed. You can override this requirement by visiting the "Billing" tab of Dispatch Edit and manually set the postprocess status to  Finished ... but avoid doing this whenever possible, because unpriced dispatches are not included by any tax or revenue reports.

Bulk writeoffs using an invoice

If you wish to write off multiple receivables at once, use an invoice to do so. Invoices are an easy way to gather together related calls in one place for quick processing.

To write off all dispatches in an invoice, mark the invoice "Paid" and specify zero dollars as the amount paid, like this:

Write off an open invoice

AngelTrack will automatically move the underlying dispatches to  Finished , leaving notes in their journals to that effect.

Facility writeoffs versus the Anti-Kickback Statute

If writing off some or all of a facility invoice, you must steer clear of the Anti-Kickback Statute, which specifically forbids the payment of cash and other consideration to your customers when Medicare and Medicaid patients are at stake.

If AngelTrack sees that the facility in question has sent you any Medicare or Medicaid business in the past year, then the AKS warning icon will appear if you tick the ☑ Write off unpaid items as a courtesy discount checkbox. Do not ignore this warning!

And do not allow your contracted facilities to sweet-talk you into writing off some of their invoices. They are asking you to risk your whole business, and they do not realize that they will be prosecuted too.

Patient writeoffs versus the Anti-Kickback Statute

If writing off patient copays that remain after Medicare or Medicaid benefits are paid, you must have a hardship policy in place. You cannot casually write off these copays without exposing yourself to the Anti-Kickback Statute, because those writeoffs will be seen as a cash benefit paid to obtain future government-subsidized stretcher business -- that is, you gave the patient a financial benefit specifically for the purpose of obtaining their future custom.

If the patient does not qualify for your hardship policy, then do not write off their invoices. Instead, sell them to collections. Because the collections agency is at arm's length from you, and is not seeking future government-subsidized business with the patient, they may choose to give a discount which will fall outside the jurisdiction of the AKS.

If you do not yet have a hardship policy, you may use this sample financial hardship policy and application (in MS-Word format) as the basis for creating one.

Reviewing writeoffs

The Revenue Accrual Report has a divedown report called the Revenue Accrual Detail Report, which shows all financial activity for any selected month. This latter report includes writeoffs, and can be filtered to show only writeoffs. It is therefore an easy place to review all writeoffs that occurred during any month.

If you find a writeoff that was made in error, then simply open the associated dispatch record, use the "Billing" tab to push it back into the postprocess workflow.

Clear it With Your Legal Team First

The foregoing is not legal advice.

Before using any data from AngelTrack concerning revenue, collections, or writeoffs, you should consult your legal team and your accountant. Taxes and deductions in the healthcare industry are complex, especially when Medicare/Medicaid writedowns are in play. It is easy to make a serious and costly mistake, so don't proceed without first talking to experts.

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