Gap Fees


Many offices conduct insurance claims on behalf of their patients/clients. Whilst this is a good service to offer to patients/clients, it also carries a substantive financial accounting overhead. This article is intended to help offices that experience some challenges with insurers that pay less than the amount that the office would normally charge.

Underlying challenge

Different insurers pay different amounts for different services. These amounts are often calculated using complex formula. For example, some insurers will pay a fixed fee for consultations irrespective of how much the office charges. Other insurers will pay up to a fixed fee. Other insurers will pay a percentage of the office’s fees up to a fixed fee.

Capable 21C offers a number of different mechanisms to support claims from these insurers, and can be configured based on the office’s business systems.


The most significant decision an office needs to make is whether it intends to recover the difference between the amount that they charge, and the amount that the insurer will pay. This difference is known as a Gap Payment. The four most common choices are:

  • Write off the difference. Do not attempt to collect it from anywhere.
  • Recover the difference from the patient/client.
  • Alter the original invoice after payment has been received so that there is no amount to write off (but no gap payment is recovered from the patient/client).
  • Ignore the gap payment (eg don’t recover it from the patient/client), but don’t write it off either.
  • Capable 21C can support each of these scenarios. However, Capable Software Pty Ltd cautions that the following information should be considered in determining which option to follow: /p>

  • Altering the original invoice amount after payment is received may result in complications if a patient/client file is audited at a later date.
  • Recovering the gap payment from the patient/client may result in considerable extra work for the office. Refer to the Knowledgebase Article KB-Mixing Private and Insurance Visits for further information on streamlining this process.
  • Leaving the additional amount unclaimed, and not written off will result in patient/client files that will include outstanding visits. The list of outstanding visits will gradually become longer and may result in unwieldy statements.
  • Insurers vary the amount that they pay on a regular basis. Attempting to configure Capable 21C so that it matches these payments precisely may result in an ongoing burden on the office staff in maintaining fees.
  • Capable Software Pty Ltd recommends the following option, to minimize staff effort:

  • Invoice patients/clients for the full amount of the service/product as if an insurer were not involved.
  • Write off the difference when payment is received from the insurer.
  • Review and alter fees for services to compensate for the gap payment that will not be collected on insurance claims.
  • Detailed Information

    To write off the difference when an insurance payment is made:

  • Go to Visits and Financials, and process the payment using the Bulk Payment option. This option works best when fully paid visits are hidden (tick the checkbox on Visits and Financials to Hide Fully paid Visits before commencing the Bulk Payment).
  • Tick the checkbox for ‘Write Off Gap?’ beside each payment that requires a write off.
  • To recover the difference from the patient, refer to the Knowledgebase Article KB-Mixing Private and Insurance Visits.

    To alter the original invoice amount:

  • Go to Visits and Financials, and process the payment using the Bulk Payment option. This option works best when fully paid visits are hidden.
  • Whilst the ‘Hide fully paid Visits’ checkbox is still ticked, click on one of the visits with amounts to be altered. Choose the menu option to alter the receipt.
  • Select the service to be altered, and click the ‘Alter Amount’ button. Key the new amount.
  • Close the receipt alteration window.
  • Repeat steps 2-4 as needed.
  • This knowledge resource is designed for use on a Windows (tm) XP system operating at a screen resolution of 1024x768 or better. Windows Media Player must be installed for this training resource to operate correctly.

    Copyright 2008 Capable Software Pty Ltd

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