What is a write-off in medical billing?
A write-off removes a balance the provider won't collect, with an adjustment code that records why: a contractual amount, a small balance, a missed deadline or an exhausted appeal.
Proposed write-offs
| Claim | Reason | Amount | Approval |
|---|---|---|---|
| CLM00377 | Small balance after secondary | $3.80 | Automatic, under $5 |
| CLM00352 | QMB cost sharing not paid by Medicaid | $25.68 | Automatic, by rule |
| CLM00298 | Timely filing, no exception found | $410.00 | Billing manager |
| CLM00241 | Appeals exhausted, CO-50 | $1,450.00 | Billing manager |
- A write-off that should have been a refund is a compliance problem. A credit balance is never written off.
Some write-offs are routine, like the contractual difference between billed and allowed on every claim. Others are losses: money a payer owed that was never collected. Both need a reason code, because the reason is what tells a practice where its money is going.
Write-offs that should be rare
- Timely filing: a claim that ran out of time.
- No authorization: a CO-197 that couldn’t be fixed.
- Exhausted appeals: a denial lost at every level.
- Small balances: amounts worth less than the cost of working them, written off by policy.
Guardrails worth having
Check that no other payer can pay and no appeal window is open. Never move a CO balance to the patient instead. Never write off a credit balance; it’s owed back. Require approval above a set amount, and record who approved what.
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