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Refund Transaction Type

JDi continues to improve financial controls to ensure accurate reporting by separating refunds from recoveries. In earlier versions of Claims Manager users were employing all kinds of workarounds including negative payment transactions to associate recoveries with indemnity, expense, medical, and rehab reserve categories.

Adding the “Refund transaction type” has eliminated the possibility of mistakes. Workers compensation claims are always a single feature, however, in multi-feature claims a user must highlight the claimant or kind of loss to associate the transaction type. 

The reserves in “Payment summary” located on the bottom left display summary totals by claims or features and may be filtered by highlighting or the claimant or kind of loss.

Single feature claims display all transactions total. The new dropdown now features refunds in addition to recovery.

What Is The Difference Between a Recovery And a Refund?

The difference is very simple:

  • A Refund reduces an amount paid based on reserved or payment category.

  • A Recovery is a reserved category specifically designed to reduce the total incurred but does alter payment totals.

Choosing the new refunds category limits the reserve category selections to payment types and does not allow a recovery transaction. If a transaction is a recovery, other reserved categories are no longer available as a default value is a recovery.

Benefits of Refund Transaction Type

So how do we get historical information when we are mixing refunds with the payments in the transaction register as the pop-out only shows the net amount paid, which includes refund reductions but their transaction register depicts the chronological and payment type history?  Clicking on the “ALAE payment” category filters a transaction report to make transaction reconciliation simpler.

The enhanced separation of recovery and refunds makes reconciliation and forensic analysis much simpler while prohibiting user error by not allowing transactions to incorrectly be categorized.

The net effect on total incurred is never changed and in cases of worker’s compensation where many people report on gross incurred net incurred applying a refund to a payment, “transaction” does not affect the gross effect totals. Only ignore recoveries but not refunds.

Software programs are expected to control user input and ultimately produce intelligent reports. JDi makes every attempt to make user input intuitively accurate by only allowing activity transactions to be entered as intended.

For more information on financial controls, please contact your client advocate or ask for a lunch and learn training session.