Back to Manual Table of Contents
Payment plans are especially important in orthodontic offices. Payment plans are created by clicking the Payment Plan button in the Account module.
You can set up unlimited payment plans, each with its own guarantor. The guarantor does not have to be in the same family as the patient, making divorce situations much easier. The payment plan shows in both the patient account and the guarantor account. The 'Go To' buttons let you quickly switch between the two accounts.
When you enter a payment plan, it will reduce the account balance of the patient you choose by the amount of the payment plan. For instance, if you do $2000 worth of procedures on a patient and then create a payment plan with a total amount of $2000, then the patient balance will be reduced back down to zero. The responsibility then falls to the guarantor to make the payments. The entire $2000 would not show as immediately due. Instead, the amount that will be shown in the guarantor account will be the Accumulated Due amount from the Payment Plan window. The accumulated amount due is simply every payment on the amortization schedule that is dated today or earlier. There is a horizontal black line in the list which separates the payments due from those due in the future.
Many of the boxes are within a group box called "terms" on the left. Once you have entered the terms of the payment plan, click the Create Schedule button to automatically generate an amortization schedule and place a note in the box at the bottom for future reference. If you are unhappy with the schedule, you can clear it and try again, or you can edit individual charges by double clicking on them.
The principal and interest is only calculated automatically as part of the create schedule function. If you then go in and edit charges, it's up to you to calculate any changes you want to make to the interest.
There is no relationship between charges on the amortization schedule and patient payments
One very important concept to understand is that although there are charges showing due in the amortization schedule, there is no relationship at all to patient payments. The payment plan charge items cause an addition to the guarantor account, and any payment causes a subtraction from the account. But they are NOT linked. It is true that payments made towards a payment plan are attached to the payment plan, but they are still not attached to the charges showing in the amortization schedule. Learn to think of payment plan charges and payments as two completely independent types of account entries. They simply balance each other out in the end.
Tracking Expected Insurance Payments
There is a checkbox at the top of the payment plan window to designate any payment plan to be used for tracking expected insurance payments. For instance, if you do orthodontics for $4,000, insurance might pay $1000. But they won't pay it all at once. They might pay it in four installments of $250 each. So you would set up a payment plan to track these installments and to make the patient balance show correctly.
Create the insurance payment plan when you get the first payment from insurance along with the EOB. Check the box at the top. The guarantor for an insurance payment plan is always simply the patient. Create the amortization schedule based on the information on the EOB. But you can be more flexible with the dates on an insurance payment plan. As each payment comes in over the next year, adjust each payment plan charge to exactly match it in amount and date. That way, the charges will always exactly cancel out the insurance payments, and the patient account will remain accurate.