In the context of billing, what does the term 'write off' refer to?

The term 'write off' in a billing context refers to a forgiven amount charged. This typically occurs when a healthcare provider or practice decides not to pursue collection of a debt that a patient owes for services rendered. A write-off often happens when the cost is deemed uncollectible due to various reasons such as financial hardship of the patient or contractual agreements with insurance companies where not all charges can be collected.

This practice allows healthcare providers to maintain accurate financial records by acknowledging that certain amounts will not be received. It is an important aspect of accounting in the medical billing process, as it helps organizations manage their accounts receivable and reflects a more realistic view of expected revenue. The other options do not accurately describe this concept; for instance, a fee modification relates to changes in service costs and does not imply forgiveness, patient refunds deal with reimbursement to patients, and a claim denial means that a payer has rejected a claim for payment rather than canceling the debt.