Dr. Ray performs a limited examination of a patient with XYZ healthcare insurance. Dr. Ray knows that XYZ will pay $65 for that service. Why does the accounting entry in the Medical Services account list the standard fee of $90?
A) To show a $25 loss for tax purposes
B) The accounting program will not allow different fees
C) To enable calculations of discounted fees
D) To enable Dr. Ray to bill the patient for the unpaid amount of $25

Question

Quizplus · Accepted Answer

The standard fee of $90 is listed to enable calculations of discounted fees, showing the full price before any insurance adjustments or discounts are applied. This practice helps in maintaining consistency in pricing and understanding the actual value of services provided before any discounts or insurance payments.

Dr Ray Performs a Limited Examination of a Patient with XYZ