Medical Office Workflow Step 5: Payment Posting

Once your charges have made it out the door, you should expect to see payer responses in as little as 5 days for electronic claims transactions and 3 weeks for paper claims.  You may receive these responses electronically, which is commonly referred to as an Electronic Remittance Advice (ERA) or on paper.  The appropriate payments can also be received electronically via Electronic Funds Transfer (EFT) or by paper check.

Iridium Suite Practice Management software imports the ERA and often can adjudicate the payments automatically in the indicated patient's account.

  Information regarding denials is attached to the designated services with complete details allowing medical office staff to research and choose the best action in order to resolve the denial with the payer.

Click here to get the white paper “Understanding Explanation of Benefits Statements.”

Whether or not your medical billing software has the ability to automatically post your ERA’s, you will need to have a full understanding of the terminology used on any format of payer remittance.  The “Amount Paid” column is of course the most self-explanatory; it is the details that accompany the non-payment amounts that are much trickier to navigate.

  The explanations for non-payment amounts are indicated by using a combination of the Claim Adjustment Group Code (two alpha characters)and a Claim Adjustment Reason Code that can be numeric or alpha-numeric.  There are 5 Claim Adjustment Group Codes:

CO          Contractual Obligation – most commonly refers to un-allowed amounts based   on the payer’s contractual fee schedule amount.

CR          Corrections and Reversal – used to indicated a reprocessing of a claim that was overturned on appeal or denying a previously approved service

OA          Other Adjustment – default code used when others may not be applicable

PI           Payer Initiated Reductions – may reflect a penalty imposed by the payer

PR          Patient Responsibility - typically applies to amounts for deductible, copayments and coinsurance per patient policy

For more details on Claim Adjustment Group Codes follow this link: http://www.iridiumsuite.com/mbs-blog/what-are-eob-claim-adjustment-group-codes

Claim Adjustment Reason Codesrange from 1 to W2 and help to define the adjustment, by communicating why a claim or service line was paid differently than it was billed.

 For a complete list of claim adjustment reason codes, visit Washington Publishing Company's website by clicking here.

Now that you understand the terminology, you can begin to post your remittance:

As you match on the service date and procedure, you will enter the appropriate indicated amounts for payments, contractual write off amounts, and patient responsibility.  The patient responsibilities, such as co-pays, co-insurance and deductibles, are allocated to the next responsible financial party; this may be the patient or another insurance company.

 Once you have completed entering the data for the service line, the remaining balance should be $0 for the payer you are processing.  Any allowed amount, but not paid, would now be showing as the responsibility of another party, either patient or an additional payer.

Identify a DENIAL by a $0 allowed amount.  You should never assume without verification that a $0 allowed amount has been processed correctly by the payer.  Carefully review the adjustment code against payer payment policies, NCCI edits, your billing records for the account and the patient’s medical record.  Only when you are convinced the service has been denied appropriately should you accept this write-off amount.