Medical Billing Cycle - Healthcare

Payment Posting in Medical Billing

Payment posting also called as cash posting. After the adjudication of the claim from the payer, the claim will be either paid or denied and a document known as EOB/ EOR (Explanation of Benefits/Explanation of Review), will be sent to the healthcare provider and insured.

If the claim is processed towards payment from payer then a check will be issued or EFT (Electronic Fund Transfer) will be done to the provider from payer along with the EOB. Claim will be paid to provider only if the patient has signed the assignment of benefits (AOB) documents. If patient has not signed the AOB, then the payment will go to the patient.

Payment posting is done in two ways:

  1. Manual Posting
  2. Auto Posting

What is the role of Payment posting team in Medical Billing?

  • Accounting the payment received from the payers against the claims submitted to the Insurance companies for the health care services provided. This process involves identifying Patient accounts, doctors/provider, DOS, procedure, billed amount, allowed amount, paid amount, write off, offset amount, Tax ID# and applying the Payments in the billing software.
  • Payment posting team receives the payment file and applies the payments in the billing software against the appropriate patient account.
  • Analysis of EOB’s under payment or over payment amount.
  • Match the payment posted amount to actual deposit amount.
  • Payment posting not only consists of posting the payments to the particular patient accounts, but also involves posting the adjustments, denials and accurately billing the balance to patient.
  • Any underpayment /denials are informed to Analyst.

Now let us see the definitions of below terms, which we come across during payment posting process in Medical Billing:

  1. EOB – Explanation of Benefits:It is also called as Explanation of review (EOR) or Electronic Remittance Advice (ERA), which will be issued by the payers to healthcare providers (Billing office) in order to communicate the decision taken after the determination of the claim.

Once the insurance company completes the adjudication process, Claim will be either paid or denied and it’s called as paid EOB or denied EOB respectively:

EOB contains below information:

  • Payer Name
  • Payer Address
  • Patient Name: Name of the patient
  • Provider Name and address
  • Member ID#: It is also known as policy identification number
  • Claim received Date: It is the date the claim received by payer from provider (Billing office).
  • Payment or denial date: It is the date the claim processed or denied by payer.
  • DOS – Date of Service: It is the date service provided from healthcare provider to patient.
  • CPT Code – Procedure code
  • Billed Amount – It is also called as charge amount for each service performed by healthcare providers.
  • Claim Number – It is also called as Document control number or Transaction control Number, which will be assigned by the payer for each claim as soon as they receive in their system.

If claim paid then following details:

  • Allowed Amount: It is an amount, payer deems fair for a specific service or procedure. AA = PA+ PR.
  • Paid amount: Paid Amount = Allowed Amount – Patient responsibility.
  • Patient Responsibility: This is the balance percentage of reimbursement that the patient or his secondary insurance(if have any one) has to pay according to his policy with the insurance company.
  • Write off Amount: It is an amount that is waived off by the provider. Write off Amount = Billed Amount – Allowed Amount.
  • Check#
  • Check date
  • Electronic Fund Transfer# (EFT#)
  • EFT date

If claim denied, then it will have the following details.

  • Denial Code
  • Denial Reason
  1. Fee Schedule:A listing of the allowed amount that an insurer or health plan will pay for a service based on the procedure code
  2. Health Saving Account-HSA:A bank account used to pay for health care expenses. Patient or patient employer can put tax free amount into their Health saving account and this can be used to pay for patient share of care costs like deductible or coinsurance.
  3. Claim in Process:Claim received and it’s still in process.
  4. Offset amount:When an insurance company makes a wrong or excess payment to its providers, it would adjust the amount in its subsequent claims and this is called as an offset amount.
  5. Recoupment:When insurance makes a wrong or excess payment to its providers, it would request the provider and recoup the excess payment from future remittances.

What is the importance of an accurate payment posting in medical billing?

  • Assume payment posting team incorrectly posted the payments to an incorrect patient account or to an incorrect DOS of the same patient account. As we know AR team works for outstanding balance of the claims from aging reports, due to an incorrect posting from the payment posting team the balance of the paid account will still be reflecting. In this case the AR team time and efforts on reimbursing the claims will be wasted as they follow up on paid claims instead of following unpaid claims.
  • Incorrect posting also affects the accuracy of claims submissions to secondary and tertiary payers. If the primary insurance payment is not posted correctly, it is possible for the secondary and tertiary payers may get billed out incorrectly.
  • Inaccurate posting and billing the balances for patient that do not owe actually. In this case patient likely to be upset, this doesn’t confidence in a practice.