In the world of anesthesia billing, write-offs are a frequent topic of discussion—yet many practices lack clarity on the different types and their implications. Broadly, write-offs fall into two main categories:

• Contractual Write-Offs
• Other Write-Offs (Adjustments)

Whether your anesthesia billing is managed in-house or by a third-party vendor, it’s essential that your team understands these categories and follows clear policies and procedures for applying them correctly.

Contractual Write-Offs: What They Really Mean

A contractual write-off represents the difference between the amount billed for anesthesia services and the amount contractually agreed upon with the payor. Your billing reports should clearly show:

• The amount billed
• The allowed amount based on your contract
• The actual payment received

This transparency helps confirm that your anesthesia billing partner is adhering to contract terms. However, in recent years, we’ve observed a troubling trend: many payors are underpaying claims, failing to meet their contractual obligations. If your billing vendor is consistently accepting these underpayments and categorizing them as contractual write-offs, it can artificially inflate your Net Collection Ratio (NCR), giving a misleading picture of financial performance.

To safeguard against this, your monthly financial reviews should include spot checks comparing billed amounts, expected allowances, and actual payments.

Other Adjustments: What to Watch For

“Other adjustments” encompass a variety of write-offs, including:

• Charity care
• Small balance adjustments
• Bad debt write-offs

There are also avoidable adjustments, such as:

• Timely filing denials
• Enrollment-related issues

Unfortunately, many billing reports lump all these adjustments together, making it difficult to identify problem areas. Your billing vendor should provide a detailed monthly breakdown of each adjustment category. If you have to request this information, it may be a red flag indicating a lack of transparency.

Why Regular Audits Matter

Consistently auditing both contractual write-offs and other adjustments ensures that your anesthesia services are being properly reimbursed. It also helps confirm that your anesthesia revenue cycle partner is acting in your best financial interest.

Want to learn more about Fusion Anesthesia Solutions?
Contact us at: sales@fusionanesthesia.com