What occurs when there is a difference between the charge and payment?

When there is a difference between the charge and the payment made, it is recorded as an adjustment on the patient account. This adjustment reflects the difference resulting from factors such as insurance negotiations, discounts provided, or write-offs due to the patient's financial situation. Recording this adjustment ensures accurate bookkeeping and maintains transparency in the patient's financial record. The adjustment helps in tracking the amount that is actually owed by the patient or written off by the practice, providing a clear understanding of their account status. This practice is essential in medical billing and coding, making it crucial for the clarity and accuracy of patient records.