Payment Posting
Payment posting, also known as cash posting, lets you view payments and gives a snapshot of your medical
organization’s financial status, making it easier to identify and resolve issues. It also involves logging
payments into healthcare billing software.
After the adjudication, a medical claim can either be paid or denied, and an explanation of benefits (EOB) is
sent to the medical provider to be insured. Once the claim is ready for payment, the payer issues a check or
an electronic fund transfer (EFT) along with the EOB to the provider.
Medical professionals manage payment posting in two ways, depending on the patient’s financial ability and
insurance coverage:
Manual posting
Typically, admin staff performs manual payment posting, requiring a longer time to fill in patient information.
This posting type has a higher risk of errors like typos, leading to delays.
Auto posting
Auto payment posting is a software-driven approach that most providers prefer because it speeds up the
medical billing process for a more consistent revenue stream. However, some solo healthcare practitioners
argue that auto-posting offers less control over their revenue-generated system.
Denial posting
Medical billers know payer-specific comments and American National Standards Institute (ANSI) denial codes.
They post denials in clients’ practice management systems and take essential actions, including transferring
balances to patient accounts, paying secondary payers, transferring denied claims to the right work queues,
or making write-offs per policies
Type of Payments
* CC Payment ( Credit Card Payments)
* Cash Payments
* Check Payment
* DD/MO Payment
HIPAATransactions
EDI 837/835 – Claims submission standard files for the electronic submission of
Healthcare claim and payment information.
837 File- Information such as Patient’s condition for which the treatment is been
given and service provided, cost of the treatment is provided.
835 File- Claim payment information is provided. It is used by the healthcare
insurance company to make payments to the providers.
Coinsurance: A form of medical cost sharing in a health insurance plan that requires
an insured person to pay a stated percentage of medical expenses after the deductible amount,
if any, was paid.
Copayment – A form of medical cost sharing in a health insurance plan that requires
an insured person to pay a fixed dollar amount when a medical service is received. The
insurer is responsible for the rest of the reimbursement
Deductible – A fixed dollar amount during the benefit period – usually a year – that
an insured person pays before the insurer starts to make payments for covered medical
services.
OUT OF POCKET MAXIMUM
The amount of money a patient pays for medical expenses that are not covered by a health insurance plan.
Out-of-pocket costs include deductibles, coinsurance, copayments, and costs for noncovered health care
services.
ABN -
An Advance Beneficiary Notice, sometimes called an Advance Beneficiary Notice of Noncoverage (ABN), is
issued by medical providers to beneficiaries of Medicare and lets them know what services might not be
covered under it.(CMS 1500 - BOX #13)
COB: Coordination of benefits is the process insurance companies use to determine how to cover your
medical expenses when you're covered by more than one health insurance plan. It clarifies who pays what by
determining which plan is the primary payer and which is secondary.
AOB:Assignment of Benefits
The claim will be paid to the provider only if the patient has signed the assignment of benefits (AOB)
documents. If the patient has not signed the AOB, then the payment will go to the patient
EOB
An explanation of benefits (commonly referred to as an EOB form) is a statement sent by a health insurance
company to covered individuals explaining what medical treatments and/or services were paid for on their
behalf. The EOB is commonly attached to a check or statement of electronic payment.
ERA
The term ERA stands for Electronic Remittance Advice referring to a form of electronic communication used
in medical billing. The purpose of ERA is to eliminate paper-based EOB (Explanation of Benefits).
ROI
Release of Information (ROI) is essentially just the process where you disclose medical records or protected
health information (PHI) to authorized individuals or entities, which tends to be the patient themselves
(though other people, like their medical insurance providers, can also be involved
CMS 1500 - BOX #12
Formula
Allowed Amount = Patient Responsibility + Provider Paid
Allowed Amount :
This is the maximum payment the plan will pay for a covered health care service. May also be called
“eligible expense,” “payment allowance,” or “negotiated rate.”
Patient Responsibilities - PR -1 - Deductable
When you see a PR 1 code, it implies that the patient is responsible for the deductible amount.
Patient Responsibilities - PR -2 - Coinsurance amount:
This is the percentage of the medical charge that the patient is responsible for after the deductible has
been paid.
Patient Responsibilities - PR -3 - Co-Pay
Copay is a percentage or fixed amount that a policyholder must pay against the medical expenses, while
the insurer will pay for the remaining amount during claim settlement.
WRITE OFF
A write-off refers to an amount deducted by the provider from a medical bill and does not expect to collect
payment owned by patients or payers. Write-offs are a common practice in the billing system. Primarily,
write-offs can be bifurcated into two categories; approved and other write-offs.
However, if chosen to be further mentioned, some of the most frequent types include charity, small balances,
no insurance, and contractual adjustment.
OFFSET
The process adjusting the old payment and applying it to new claim is called offset adjustment
OVERPAYMENT
If an insurance company make a payment to provider in error or because of billing error, the issued payment
is called overpayment.
Reasons are:
- Incorrect Billing
- Medical Necessity errors
- Processing Error( ( PMS)
- COB Issues
REVERSAL
- To Recover the overpayment amounts insurance often send reversals in the future claims where they
reverse the amount from the overpaid claim and apply it to a newer claim where payment is due
- Reversal amounts showing in EOB or ERA
REFUND
Sometimes insurance companies do not adjust claim by offset or there is no future claims , they ask
providers to send the overpayment money back.
In this scenario, they issues a refund requrest to provider and ask them to send a check.
Provider need to write down a check to the insurance company in order to balance out the overpayment
amount
BAD DEBIT
Bad debt in healthcare represents an estimate for a bill that the patient or other payor cannot, or will not,
pay. Bad debt is also referred to as uncompensated care.
Contractual Adjustment in Medical Billing?
A contractual adjustment is a discounted insurance rate or allowable payment based on the contract with the
insurance company. It is adjusted from the patient’s account.
Let’s say for example if the charge for a procedure is $80 and the insurer pays $70, the remaining $10 will be
a contractual adjustment from the final payment if the patient has an insurance plan. By this way, it ensures
that the provider gets paid at least 80% of their fee as without insurance can be a significant cost-sharing
burden.
Claim Adjustments Group Codes
The below group codes are applicable when the office charges exceed the reasonable and customary amount
for the rendered service.
Contractual Obligation (CO)- It is a Joint contractual agreement between the payee and the payer resulting
in an adjustment.
Other Adjustments (OA)- It is permitted to be used when no other group code is applicable for managing
such write-offs.
Payer initiated reductions (PI)- According to the payer when the patient is not financially viable for the
adjustment, and there is no supporting contract between the provider and the payer.
Patient responsibility (PR)- An adjustment sent out to the patient or insured portion of a bill. For
deductibles and copays, this group code can pose.
Claim Adjustment Group Codes (CAGCs)
These standardized denial codes are used in Electronic Remittance Advice (ERA) transactions to indicate the
type of adjustment being made to a healthcare claim. Two alpha characters in the code identify who is
responsible for paying the unpaid portion of the claim balance.
Example codes
CO-10
The diagnosis is inconsistent with the patient's gender. Usage: Refer to the 835 Healthcare Policy
Identification Segment (loop 2110 Service Payment Information REF), if present.
CO-18
Exact duplicate claim/service (Use only with Group Code OA except where state workers' compensation
regulations requires CO)
CO-22
This care may be covered by another payer per coordination of benefits.
OA-23
The impact of prior payer(s) adjudication including payments and/or adjustments. (Use only with Group Code
OA)
CO - 45
Contractual Obligations
CO-96
Non-covered charge(s).
CO-97
The benefit for this service is included in the payment/allowance for another service/procedure that has
already been adjudicated. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110
Service Payment Information REF), if present.
