CASH POSTING
Introduction:
Once the claims reach the carriers and they complete processing, they issue a check
and prepare an Explanation of Benefits (EOB). The checks and the EOBs would be sent
to the pay-to address with the carrier or in the CMS. Pay-to address is the common
address that the provider has set up to receive checks and EOBs from carriers and
patients. This is most likely a PO Box address set up in arrangement with the bank
where the provider has an account. The checks and EOBs are received on all working
days. The bank deposits the checks every day into the providers account, prepares a
deposit statement and sends the statement, EOBs and copies of checks every day to
the provider. The provider forwards them to the billing office for posting.
What is Cash Posting?
Cash posting is the process of applying the payments received from insurance
companies, patients and other entities, towards settlement of claims, to the respective
claims / patient accounts or other accounts in the billing system. The posting will be
done as per the cash posting policy mutually agreed upon between the client and the
billing office.
Important Terms used in Cash Posting
Deposit Date:
Date on which an insurance or personal payment is deposited in the bank.
Line Item Sheet:
A sheet listing the Check amounts deposited on a particular deposit date.
Scan Date:
The calendar date on which the payment file has been scanned to Indian Office.
EOBs (Explanation of Benefits):
Document released by the insurance company or payer, after a claim has been
adjudicated, showing the total benefits paid on the claim, also stating the reasons for
any denial or partial settlement of the claim.
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Allowed Amount
This is the amount allowed by the carrier. Not all carriers and in all circumstances allow
the entire amount billed. Certain carriers have fee schedules based on which they make
payments. These fee schedules determine the allowed amount. A Fee Schedule is a list
of reimbursement amount for each procedure. These vary according to various
localities. This allowed amount is the maximum that a carrier will pay for a particular
procedure.
Co-Insurance
This is a part of the allowed amount, which the carrier has determined that the
supplementary insurance or the patient is responsible to pay. This will be mentioned
clearly in the EOB and should be billed to the secondary carrier or to the patient
Capitated payment:
Capitation refers to a method of reimbursement by certain health care insurers. Under
the capitation system, providers are paid a fixed dollar amount every month per patient
assigned to them, regardless of the number of services performed during the month.
Services that are paid under the capitation system are referred to as capitated services.
Payers do not require submission of claims for such services.
Deductible:
The amount an individual must pay for health services each year before the individual's
insurance company starts to pay.
Lockbox:
Basically a bank account opened by the provider for the purpose of insurers to forward
the payments directly to the bank which will then cash the Checks & credit the
providers account.
EFT (Electronic funds transfer):
It is a method by which funds are transferred from one bank account to another bank
account through electronic means. Some insurances use this method to remit payments
to the provider.
Pay to Address:
The address authorized by the provider for Insurances & other entities to forward the
payments & other correspondence related to settlement of claims.
Contractual write-offs:
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A portion of the claim amount which cannot be collected due to the discount agreed
upon by the provider through a specific contract with an insurance / payer. Such
amounts are removed from the billing system by doing a write-off.
Adjustments:
The process of reducing the claim amount which cannot be collected due to various
reasons.
PROCESS:
After claims are sent to the various insurances /payers (see item Trans / Paper) the
payers process the claims and make payments. The mode of payment may differ across
insurance & across clients. Insurance payments may directly get transferred into the
Providers lockbox or a paper Check may be sent to the Pay to address registered in
their system.
Electronic Payment Posting
Some Insurers have the capability to post payment details directly into the billing
system. The Billing Software should be capable of accepting those payments.
Types of Write-offs or Adjustments
The following are the types of write-offs or adjustments that may be taken by the cash
posting department:
1.
2.
3.
4.
5.
6.
Professional Courtesy Discounts
Courtesy Discounts or Waivers
Contractual Write-offs
Bad Debt Write-offs
Other Non-Contractual Write-offs
Capitation Adjustments
Types of Cash Accounts
The following are types of cash accounts, other than the regular patient accounts,
where payments received may be posted, as per cash posting policy and guidelines:
1. Interest Accounts
2. With-Hold Accounts
3. Incentive Payment Accounts
4. HPSA (Healthcare Professional Shortage Area) Account
5. Capitation Account
6. Internal Collection Account
7. External Collection Account
8. Advance Payments Account
9. Refund Account
10. Offset Account, etc.
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