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Email: info@prgmd.com | Call: +1 (833) 888-7725
Business hours: 8:00 to 5:00 | Monday to Friday
In an environment where payer policies make things complicated, having insight into your cash flow becomes imperative. While you may have all your bases covered when it comes to submitting clean claims and negotiating excellent insurance contracts, without tracking your revenue precisely, you are putting your financial well-being in jeopardy.
The importance of payment posting in this context makes it the foundation stone for Revenue Cycle Management (RCM). This is not just any other mundane task but rather one that holds the key to understanding everything about your practice in terms of finances. You will be able to see in detail what was billed, how much was received, what adjustments were made, and finally what is still pending payment.
While many think that it is an easy process, some even consider it equivalent to claims submission or insurance adjudication in many blog posts, this guide aims to enlighten you on this topic. For more information, read on to understand what it truly takes.
At its core, payment posting is the systematic process of recording payments, contractual adjustments, and patient liabilities into patient accounts within a practice management (PM) or medical billing system. This stage begins only after an insurance carrier has processed a medical claim and issued a formal determination.
The data used to complete this process stems from two primary foundational documents:
Explanation of Benefits (EOB): A physical, paper document mailed by insurance companies to the healthcare provider. It outlines line-by-line how a patient’s medical claim was processed, detailing allowed amounts, paid sums, and what portion of the cost must be pushed to the patient.
Electronic Remittance Advice (ERA): The digital counterpart to the EOB. Formatted to the strict national ANSI 835 standard, ERAs are transmitted directly from insurance clearinghouses to the billing software, allowing for swift, automated data translation.
When a payment is accurately posted, the mathematical balance of a claim must accurately align with the actual funds moving into the practice’s bank account. Once settled, any leftover financial weight is either transferred to a secondary insurance policy or directly converted into a patient bill.
Understanding the payment posting process in medical billing is vital for healthcare professionals, doctors, and administrative staff. Let’s explore the ten essential steps that ensure an efficient payment posting process within a healthcare enterprise.
Once the claims are submitted, the payer steps in to review them. They evaluate the claims to determine the reimbursement amount for the healthcare provider. This determination relies on factors like the:
Following this assessment, the payer dispatches an Explanation of Benefits (EOB) or Remittance Advice (ERA) to the provider. This document outlines the payment details or denial status for each claim.
After receiving payments, the next step in the payment posting process is accurately entering these payments into the provider’s billing system. This includes recording the following:
Equally important in medical billing is reconciliation. This involves two key aspects:
(a) Comparing and verifying received payments—from government programs, insurance companies or patients—with the billed charges for provided healthcare services
(b) Cross-checking Electronic Remittance Advices (ERAs) with corresponding bank deposits. This process ensures that every dollar collected enters the provider’s bank account.
During payment reconciliation, discrepancies may surface due to various reasons, such as:
Identifying these discrepancies is an essential part of the payment posting process. It demands quick action to resolve these issues and maintain accuracy in financial records.
If discrepancies are identified, the provider may find it necessary to initiate appeals with the payer. This step is vital for addressing denied claims or correcting incorrect payments. It might involve submitting additional documentation or providing clarifications to strengthen the claim.
For instance, consider a scenario where a coding error led to a claim denial. The provider can correct this by submitting the correct codes along with any supporting documentation during the appeals process.
Following the resolution of discrepancies, providers proceed to balance their accounts and generate reports. These reports help in:
Medical practices handle payment data through two primary operational methods: manual keying and automated auto-posting. While modern technology prioritizes speed, high-performing revenue cycles operate via a hybrid model that maximizes the strengths of both systems.
Manual posting entails hiring a billing specialist to analyze the physical copies of paper EOBs and manually key in each and every payment, adjustment code, and remark code in the billing software.
Auto-posting is powered by sophisticated billing software that automatically processes incoming ERA 835 files received from a secure clearinghouse. The billing software analyzes the information provided by the string of codes and immediately posts payments to hundreds of accounts at once.
Payment posting is essential in the medical billing process, a vital component of RCM in healthcare. Here, we delve into the key benefits that accurate payment postings bring to your practice, including:
In conclusion, effective payment reconciliation demands thorough attention, insurance contract knowledge, and swift error resolution. Despite the option of streamlining with billing software, the process necessitates time, resources, and an updated understanding of medical billing guidelines and payer policies. Due to its complexity, many medical practices and healthcare enterprises find outsourcing the payment posting process and reconciliation a practical choice. This strategic decision allows professionals to concentrate on core responsibilities while ensuring accurate financial management through specialized services.
An EOB (Explanation of Benefits) is a paper document sent by insurance companies explaining a claim decision, while an ERA (Electronic Remittance Advice) is the digital version sent directly to billing software for fast data processing.
Much after. A claim must be submitted, reviewed, and paid or denied by insurance before the payment posting process can even begin.
This happens when an insurance company pays less than your legally negotiated contract rate. If posters blindly write off the difference as a standard adjustment, your practice loses valid revenue.
Secondary insurance will not pay until it sees how the primary insurance processed the claim. Delays or errors in primary posting freeze the secondary billing loop.
Poor posting leads to incorrect patient statements. Billing a patient for a deductible they already paid destroys provider trust and lowers patient retention.
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