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February 21, 2024

What is the payment posting process in medical billing?

As a healthcare practitioner, you must have heard the term payment posting, but what exactly is payment posting in medical billing? The payment posting process examines the payments and the financial status of a healthcare practice. Payment posting in healthcare revenue cycle management entails the recording of payments. It offers a clear outlook on the following:

Patient payments
Insurance checks from ERAs
Insurance payments in EOBs

While the payment posting process is a straightforward activity in medical billing, it is still one of the most important and the first stages of total revenue cycle management. To save time and reduce inconveniences, it is vital for a medical practice to determine and then address potential problems right from the get-go.

Key Takeaways:

Navigate the Ten Stages: Explore each step in the payment posting process, from claim submission to continuous monitoring.
Manual vs. Auto Posting: Explore the impact of manual and auto posting methods on healthcare revenue cycles.
Precision Pays Off: Uncover the benefits of accurate payment postings, from simplified analysis to quicker denial resolution.
Strategic Insights Unveiled: Gain strategic insights, including process enhancement, effective patient communication, and the significance of continuous monitoring in medical billing.

Payment Posting Process in Healthcare

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.

1. Claims Submission

Healthcare providers submit claims to insurance providers or other payers to start the payment posting journey. These claims contain essential details such as services, associated costs, and relevant patient and provider information.

2. Adjudication

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:

Patient’s insurance coverage
Provider’s contract with the payer
Particular medical codes for describing the services

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.

3. Receiving Payments

With the EOB or ERA, the healthcare provider enters the next phase of receiving payments. These payments encompass various components, including those from insurance and patients (such as copayments or deductibles).

4. Payment Posting

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:

Payment amount
Payment date
Details of the payer and other pertinent information for each claim.

5. Reconciliation

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.

6. Identifying Inconsistencies

During payment reconciliation, discrepancies may surface due to various reasons, such as:

Coding errors
Contract negotiation issues
Billing mistakes

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.

7. Appeals and Corrections

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.

8. Balancing and Reporting

Following the resolution of discrepancies, providers proceed to balance their accounts and generate reports. These reports help in:

Tracking payment trends
Identifying areas for improvement
Ensuring accurate financial records

This step is vital for maintaining a clear overview of the payment posting process.

9. Provider-Patient Communication

When patients are responsible for a portion of the bill, such as copayments, deductibles, or services not covered by insurance, the provider initiates communication. Statements are sent to patients, outlining their financial responsibility and kindly requesting timely payment. This transparent communication promotes a collaborative approach to managing healthcare expenses.

10. Continuous Monitoring

Moreover, payment reconciliation isn’t a one-time task—it’s an ongoing process in medical billing. As payments and claims are continually processed, healthcare providers must continuously monitor and reconcile. Regular oversight ensures the accuracy of financial records and maximizes revenue potential.

Methods of Payment Posting

Exploring the payment posting process in medical billing reveals two different methods:

Manual Posting
Auto Posting

The choice between these methods depends on the patient’s financial resources and insurance coverage.

Manual Posting

The administrative staff fills out the necessary details in the manual posting approach. This method, however, tends to be more time-consuming as it requires information entry without automated assistance. Delays in payment posting may arise due to various issues, with typos being a common reason. The manual posting process demands thorough attention to avoid errors that could hinder the smooth flow of the payment posting workflow.

Auto Posting

On the other hand, auto payment posting is a more streamlined strategy driven by software solutions. Many healthcare companies favor this automated approach as it accelerates the medical billing process, ensuring a reliable revenue stream. Interestingly, while acknowledging the efficiency of auto-posting, some solo practitioners may prefer manual payment posting, believing it gives them greater control over their revenue generation system.

Key Advantages of Payment Posting Process in Medical Billing

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:

1. Easy to Analyze RCM in Healthcare

Upon posting payments to patient accounts, a valuable opportunity arises to analyze the revenue cycle. This analysis not only maximizes the revenue cycle’s profitability but also enhances the functioning of the accounts receivable department. By identifying improvement areas, medical practices can refine their processes, ensuring a more effective and simplified revenue cycle.

2. Solving Recurring Problems

Accurate payment posting serves as a solution to many problems within the revenue cycle. Beyond simply posting payments, it covers adjustments and denials. Identifying line denials becomes helpful in resolving denial reasons, preventing future claims from being denied for the same underlying issues. This approach ensures a smoother and more error-resistant billing process.

3. Strengthening the Present Processes

The revenue cycle process influences the efficiency of the medical office staff. Occasionally, management may overlook the impact of existing processes on the revenue cycle’s optimal performance. Once identified, it becomes vital to assess whether specific processes need additions, improvements, or removals to expand the overall effectiveness of the revenue cycle. Strengthening present processes contributes to a more efficient and responsive healthcare financial ecosystem.

4. Reduces Denial Resolution Time

The most effective approach to handling denials is preventing them in the first place. A key prevention strategy is staying vigilant with insurance payer instructions. Keeping well-informed of bulletins and correspondence from payers who share insights on new billing or coding rules is essential. Rapid correction and resubmission of denied claims are vital for reducing denial resolution time. Delays in addressing denials add to the overall accounts receivable days, impacting the financial health of the medical office.

5. Assists in Accurate Claims Submissions to Secondary Payers

Accurate payment postings ensure correct claims submissions to secondary and tertiary payers. If the primary payment is not accurately posted, it opens the door to potential billing inaccuracies for secondary and tertiary payers. Continuous monitoring of processes is essential to enhance each facet of the revenue cycle. This maximizes reimbursement and ensures compliance with proper billing practices, contributing to a more efficient and error-resistant medical billing system.

Conclusion

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.