Depositing Payment

Video Transcription

So where is all of this going to go? Well, that's what we're figuring out in this lesson. We'll discuss how payments are collected and where payments can go. The specifics of this lesson are the following, how payments are collected, direct deposit, check, credit card, cash, where payments go.

You'll need to decide how you will accept money. The four most common ways to collect money are direct deposit, check, credit, cash.

Almost all insurance companies have a procedure for direct deposit for payment of client sessions. Direct deposit is the most convenient and quickest way for you to be paid. Payment from an insurance company is typically made by an electronic funds transfer or EFT. EFTs are the means by which most insurance companies direct deposit payments into the counselor's bank account. No fees are typically associated with the EFT process, but you must have a bank account and must sign up for EFT for insurance companies.

When a counselor elects for a direct deposit, he or she will need to create a system for rectifying payments for sessions, because EOBs or explanations of benefits are typically not mailed when direct deposits are chosen. All of the EOB information will be electronic, as will the payment. Sign up can occur at the CAQH Proview site for some insurance companies. It can occur also through a billing clearinghouse, or it can occur directly via the insurance company.

When payments are direct deposited, it is possible that only one check is deposited for several different sessions or different client sessions at the same time. It will not be possible to track payments by EFTs because one payment may account for several dates or several services or several client sessions, thus you will have to track payments by the ERA or Electronic Remittance Advance or the EOB or explanation of benefits.

If you do choose direct deposit, the second most common way for payment is by check. Checks typically are attached to EOBs, so it's easy to rectify payments, but less convenient due to physical trips to the bank or phone calls. It's common for some EAPs that may be small to offer direct deposit. Collection of money from the client typically is made by check, credit card, or cash.

Setting up a credit card processing system is essential for business. One important reason is that clients have flex spending and health savings accounts, which require credit card payment. When you set up the credit card processing system, it will be important to tell the company that you will be swiping flex spending or health savings cards accounts.

The reason for this is that because credit card companies may need to know and grant special permission in order to accept health related cards. Even though a credit card company takes a percent of the payment, this percent is minor compared to the work involved in creating and sending invoices for payments.

Some clients may wish to pay cash, which is a super easy method of payment for you to deal with, as you can avoid the hassle of depositing checks or payment of credit card processing fee.

It's essential for you to have a business bank account for direct deposits, credit cards, and checks. Setting up direct deposit with each insurance company is time consuming, since it needs to be done for each or any payer that offers a benefit, but once it's complete, the money will deposit in the account thereafter.

Direct deposit is free for the counselor. Before setting up a credit card processing system, you should shop around and compare. Some companies charge a flat percent of 2% to 3% per swipe of the card, whereas others offer a percent plus a small fee per swipe. Features such as swiping from a phone or a tablet is a nice option. That's exactly what I've been using for years, and it's very, very convenient. Other nice features include placing a payment link on one's website, so that the payments can be made online.

It is always nice to have clients pay in cash, but you'll need to decide what to actually do with the cash and will need to be prepared to give a receipt. It's important to have plenty of petty cash on hand in the office in order to make change for those who do pay cash, especially for co-pays.

So in record keeping of where payments go counselors will need to create a system or use an EHR to identify if payments are made by cash, credit card, or check. Now keep in mind that tracking payments will be essential for tax reporting purposes.

Here's what we covered in this lesson. First, how payments are collected, direct deposit, check, credit card, cash, where payments go.