The purpose of an advance payment is to pay a financial entity for services before claims are processed through the claims payment and reporting cycle. All advance payments made to financial entities are recouped through an account receivable transaction called advanced payment receivable.
Advance payment is considered both a payout of money to a financial entity and an accounts receivable owed by the financial entity.
One example of an advanced payment may include a care facility that is unable to afford payroll or insurance premiums for a given month. The State can authorize an advance payment to cover this amount, and the care facility will then reimburse the amount over a period of time.
When a financial entity requests an advance payment from the State department, an account receivable (A/R) is created using the activity code and reason code contained in the accounting transaction request received from the State.
After the advance payment is created, the reason code and amount to be paid to the financial entity can be updated if it has not been processed in a claims payment and reporting cycle.
During the next claims payment and reporting cycle, the account receivable record is used to begin the process of paying down the accounts receivable by applying payment to the receivable. During the creation of the account receivable, the recoupment options selected determines when and how much of the financial entities payment is applied to paying down the advanced payment receivable.
The advanced payment recoupment type code determines how the monies are being recovered. The recoupment type code options are default, no recoupment, percentage amount, dollar amount and scheduled payments.
When the scheduled payments option is selected, payment details are added to the account receivable indicating the due date and amount.
Note: For scheduled payments, the recoupment is not part of the claims payment and reporting cycle process. However, if the payment schedule agreement is not met, an indicator (called default on payment schedule) is set and recoupment can be done through the claims payment and reporting cycle process.
ND MMIS creates the following two financial transactions that are used in claims processing to handle the advance payment receivable:
As the claims payment and reporting cycle applies claims to pay down the receivable, the transaction control numbers (TCN) are applied to the receivable. All TCNs applied to the account receivable are displayed when the record is accessed via the North Dakota MMIS Web Portal.
If the advanced payment is to be paid by scheduled payments, then the financial control numbers (FCN) are created when the receipt is posted to pay down the receivable. The FCNs are also displayed when the account receivable record is accessed via the North Dakota MMIS Web Portal.
How to Add or Edit an Advance Payment
Version as of 5/16/14.
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