How to Convert an Item from Sale to Rental from a Claim.

Step 1

Submit a Claim; first, you will need to create the claim for the purchase. We don’t know what they will do, but they certainly won’t purchase the chair if we don’t ask, so we’ll start with a claim for purchase.

Step 2

Enter payment from the ERA; if the payor decides to purchase the item, they can simply pay their allowable for the claim. If they decide to rent, they will likely downcode the Procedure code and pay their allowable for a monthly rental.

Wrong way: Accept the rental payment on the purchase claim and change the allowable amount. This is the simplest option where you would reduce the allowable amount from $900, what we expected for the purchase, to the rental allowable amount of $90. The problems with this approach are; (1) The system thinks the item belongs to the customer and has inactivated the Tracking Item, (2) A Cost-Of-Goods-Sold (COGS) has been recorded in the Ledger area and the item has not been sold, and (3) We are grossly inflating our non-allowed amount by $810.

Correct way: Accept the rental payment, but do not change the allowable amount. This will show the claim as $810 outstanding which we will process against a credit invoice later.

Step 3

Create a credit order to return the item; This should be an order for the same amount as the original order ($1,200) for the same Tracking Number. As this order is posted, it will return the item to inventory, return the COGS amounts, and create a credit invoice balancing the previous incorrect claim.

Step 4

Create a new order, or add to the credit order a line for the first month’s rental of the item. Since we know the payor is going to rent the item at this point, and for how long, we can set the recurring rental item for the desired number of months. As this order is posted, it will create a claim for the first month’s rental of $120 with an expected allowable of $90.

Step 5

Credit the Original purchase claim against the newly created return and rental claim(s). The Original purchase claim should have an outstanding balance of $810 ($900 expected allowable minus $90 payment). The Return claim should have a credit balance of ($900) and the new Month-one claim a balance of $90 (Submitted $120 w/nonallowed of $30).

a. So you would apply a credit adjustment of $900 to the Original purchase claim and a debit adjustment of $900 to the Return claim. The Adjustment ID would not matter because the plus/minus would balance out for the day.

b. Then, you would apply a negative payment of ($90) to the Original purchase claim and a regular payment to the new Month-one claim. Again, the Payment ID would not matter because the plus/minus would balance out for the day.