When we talk about medical billing from a general perspective, it seems like a simple task. It looks like that the patient receives the treatment, and the health service provider gets the payment straight away. However, the whole process is a complex one that involves various steps. It can take a fair amount of time as well. There are several steps in medical billing, & one of them importance of payment posting. The health care service providers should not ignore it. Otherwise, the revenue cycle management of the provider will suffer. A health care service provider needs to pay close attention to the sound payment posting standards. It’s important that your internal medical billing team or medical billing outsourcing company adhere to these standards. Let us learn more about Payment Posting.
What Is Payment Posting:
Payment posting is an important part of Revenue Cycle Management. After submission of a claim to the payer or insurance company, the health care provider awaits a decision from the insurance company. They might pay the claims or send denial. Thereafter, the insured and provider receives a document explanation of benefits or Electronic Remittance Advice (EOB/ERA) in either of these cases.
Upon agreeing with a submitted claim, the payer will send payment via check or EFT together with EOB. However, one must remember that the provider will receive claim money only if the patient has signed an AOB (Assignment Of Benefits). Otherwise, the respective payments will go to the patient. Payment posting settles the claim under the patient’s account by posting the payment or a denial. It completes the process of payment posting.
Why You Need to Be Cautious With Payment Posting
Some care providers just deposit the check once they receive payment and do not care. The same pattern they follow with electronic payments as well. However, health care providers worried about RCM know that this can affect the whole RCM. They understand it is important to settle the payment against the patient account at the earliest and correctly.
Consider an example, A payer makes a payment of $1000 regarding a submitted claim. But the payment posting professional settles the account of the different patient where insurance is denying the charges. Now, due to incorrect posting the AR team is not able to view the correct denial information and it will hamper the revenue generation automatically.
In medical billing, there can be involvement of secondary insurance payers and tertiary players as well. If the payment posting team makes an error while posting payments of the primary payer, the other two parties will get affected.
Issues Related To Calculation Of Exact Billing:
The payment posting professionals deal with the calculation of billing in their routine. There are certain terms that they must have a clear understanding of. These includes:
- Billed Amount
- Allowed Amount
- Allowed Adjustment
- Co-Payment
- Co -Insurance
- Patient responsibility
- Paid Amount
The “Billed amount” is the amount that a service provider sends to the insurance company. The “Allowed Amount” is the maximum amount that an insurance company can pay for an insurance cover. The “Allowed Adjustments” are the part of the payment bills that is adjusted or written off as per the contractual agreement between patient and insurance. Paid amount is the exact amount that a service provider receives.
“Patient Responsibility” includes Co-payment, Co Insurance, deductible and other Out of pocket expenses. They refer to the part of a medical bill that the primary insurance will make it a patient’s responsibility, but secondary or tertiary Insurance might pay these charges.. Else patients have to pay these charges.
Some of the formulas that help understand these terms better are :
- Billed Amount = Allowed Amount + Allowable Adjustment
- Allowed Amount = Billed Amount – Allowable Adjustment
- Allowed Amount = Paid Amount + Patient Responsibility
- Paid Amount = Allowed Amount – Patient responsibility
And So On. For example, If a claim billed to Medicare with the “Billed Amount” of $100 and It’s “Allowed Amount” is $80 , So Co- Insurance will be “Patient Responsibility” of $8, will result in a “Paid Amount” of $72.
Paid Amount = 80 – 8 = $72.
As per US healthcare, wrong calculation of payment or errors may lead to a variance and will impact the calculations of the final report .This is why understanding these terms and their correct usage is significant. The payment posting professionals cannot afford to commit mistakes on these.
What Are The Functions Of Payment Posting :
1. Makes RCM Efficient:
By posting payments correctly and performing an analysis of the data, RCM may be able to resolve several problems. Posting denials, identifying denials and other services are part of payment posting. Moreover, it includes help correcting denials and preventing them from happening again.
2. Account Settlement Without Error:
The main task of the payment posting team is to post payments in the software correctly to make sure that all patients’ accounts show their correct state. Any error will impact the whole RCM as well as other departments such as Account Receivable and Billing.
Secondly, it will impact the payments of secondary payers and tertiary players as well.
3. Match payments with ERAs/EOBs-
To ensure that all funds get received, it is important to match and reconcile all received payments from payers. Among these payments are checks, credit card payments, and electronic funds transfers. A lack of attention to reconciliation can result in misrouting of funds.
4. Performing Adjustments:
Data analysis is a vital aspect of revenue cycle management. Analyzing payment and denial information can help companies improve their RCM. Using it helps in revenue forecasting, business strategy, and improvement of operations.
Why choose Virtual Oplossing Healthcare?
Virtual Healthcare is an expert company in the profile of medical billing and RCM. The company provides expert-level medical billing services in the USA. Payment posting is one of our specialities at Virtual Oplossing Healthcare.
We doing the Best Payment Posting Work in USA have the expertise and the technological solutions to make your RCM more efficient. We have already helped several doctors, hospitals & clinics to improve their revenue. Consult with Virtual Oplossing today to learn more about expert medical billing solutions today!.