Payment Posting Process

Before Reading this article , it is advised you to read about EOB (Explaination of Benefit) First.

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 HCFA. 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 provider’s 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.


The Basic Formulae used in Payment Posting is:


Allowed Amount = Paid Amount + Pt. Responsibility

Patient Resp. = Copay + Co Ins. + Deductible

Information can be found on EOB , Billed amount will be found with every CPT , Insurance will allow some amount and paid, and some can go for patient responsibility also , Information on EOB then entered into the claim keeping in view the above formulae. Reason Codes are very important which should be read and entered into the claim.

Its not an end of payment Posting, its not an Data Entry Job , all the claims are not paid, sometime it denied and sometime amount applied for patient responsibility , which can be understand by reading reason code and if there is patient responsibility, then balance should applied on patient Account and if there is a payment on insurance and not processed properly or some mistake , then it should be re-submit to Insurance or transfer to the concern department for furthur review.

Payments can be entered through different methods:

EOB POSTING
LINE ITEM POSTING
ACCOUNT POSTING
etc

Terms which is needed to understand for Payment Posting:

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.


Deductible:


This is an amount that the patient owes the carrier every year apart from the premium. The patient has to pay this amount before insurnace started to pay.

Write Off:


This is an amount that the provider has to remove from his books. There are two types of write off: One is contractual write off and the other one is adjustments. Contractual write off are those wherein the excess of billed amount over the carrier’s allowed amount is written off. The fee schedules of each carrier will be loaded in the billing system. When you are posting the EOBs these fee schedules in the system also called system allowed amount would pop up. The difference between the billed amount and the system allowed amount will be the write off.Adjustments are amounts such as discounts, professional courtesy and other special items that are identified by the provider as those that need not be collected or collected at a lower rate.