I know that many of you offer a payment in full bookkeeping courtesy for patients who pay for treatment up front. It’s a very common thing to do and doing so makes logical sense given the reduced paperwork and logistical maneuvering necessary when the account balance is zero from the start. However, I wanted to point out that failing to reduce the treatment fee by the amount of the insurance benefit BEFORE applying the PIF discount is not logical. Think about it. You still have to collect the insurance benefit over the course of the treatment and thus there is no reason that a bookkeeping courtesy should apply. Not sure what I am taking about? Let me give you an example in a hypothetical office:

Treatment fee = $5000.00

Insurance benefit = $1500.00


Typical PIF calculation for a 5% courtesy:

$5000.00 x .95 = $4750.00 ($250.00 courtesy)


How a 5% PIF courtesy should be calculated:

$5000.00 – $1500.00 = $3500.00 x .95 = $3325.00 ($175.00 PIF courtesy)


The second method is obviously the fairer and more logical way of calculating a PIF courtesy. Forgetting to remove insurance benefits before applying a PIF courtesy is costing you big bucks while defeating the entire purpose of the pay in full courtesy.

3 thoughts on “Insurance Benefits and PIF Accounts

  1. As always (almost) Ben gives logical, common sense advice….coming from years of experience and trial and error. If you at all have a finger on what’s going on in your practice (reviewing contracts), you’d come to this conclusion yourself after a few years. But just do what Ben says rather than figuring it out on your own. We’ve been doing this for years and it makes perfect business sense and is fair to both parties.

  2. Ben hits the nail squarely on the head yet again.
    We always use 5% off the the patients out of pocket! Discounts really add up and we track them with our Mgt software… Big wow at the end of the year.

Comments are closed.