In an underpayment scenario with Billed Amount $5,000; Expected Amount $4,000; Allowed $3,000; Posted Write-Off $2,000, which write-off option is being used?

In an underpayment scenario with Billed Amount $5,000; Expected Amount $4,000; Allowed $3,000; Posted Write-Off $2,000, which write-off option is being used?

• A. Write-Off Payor
• B. Suppress Write-Off
• C. Write-Off Expected
• D. Write-Off Expected and Variance Separately

Answer: (A)

When an underpayment occurs, the write-off method determines who absorbs the shortfall and how the remaining balance is reflected. Here, the billed amount is 5,000 and the allowed amount is 3,000, leaving a shortfall of 2,000. The system posting a 2,000 write-off reduces the payer’s liability from the billed amount down to the allowed amount. That is exactly what a write-off to the payor does: it brings the payer’s responsibility to the allowed amount (3,000) by writing off the difference (2,000). The other options don’t fit this scenario: writing off to the expected amount would imply reaching 4,000 (a 1,000 write-off), which isn’t what the numbers show. Suppressing a write-off hides the adjustment rather than applying it to the payer, and splitting into “expected and variance separately” would involve two separate adjustments, which isn’t reflected here.

When an underpayment occurs, the write-off method determines who absorbs the shortfall and how the remaining balance is reflected. Here, the billed amount is 5,000 and the allowed amount is 3,000, leaving a shortfall of 2,000. The system posting a 2,000 write-off reduces the payer’s liability from the billed amount down to the allowed amount. That is exactly what a write-off to the payor does: it brings the payer’s responsibility to the allowed amount (3,000) by writing off the difference (2,000).

The other options don’t fit this scenario: writing off to the expected amount would imply reaching 4,000 (a 1,000 write-off), which isn’t what the numbers show. Suppressing a write-off hides the adjustment rather than applying it to the payer, and splitting into “expected and variance separately” would involve two separate adjustments, which isn’t reflected here.