Payment Posting: A Key to Getting a Clear Financial Picture of Your Healthcare Business

If you’re a practice manager or hospital administrator, you need to know how your healthcare business is performing and whether or not you collect the revenue that you’re actually owed. For this purpose, you need to get a clear picture of your financial structure, so you can get detailed insights and make well-informed decisions. For instance, if there are flaws in the revenue cycle management or getting reimbursements from the insurance companies_you can revise the RCM strategies and better direct your team. But here’s a question that arises: how can healthcare providers get a clear financial picture of their medical practices? The answer is ‘payment posting’.

It is the most important but unfortunately may be overlooked aspect of the revenue cycle management. All the time, we talk about claims submission, medical coding,  insurance verification, denial management, accounts receivable etc. Here’s nobody talking much about this critical step of the medical billing services. Did you know, without having a streamlined remittance processing or payment posting in place, it would be impossible to complete the reimbursement process? That’s why it is now widely recognized as an important component of the healthcare revenue cycle management process.

In this article, we will discuss the importance of payment posting for an efficient RCM process in detail. So, let’s get started!

What Is Payment Posting?

Payment posting provides complete insights into payments and the daily revenue stream of medical operations. While reviewing the payments, your billing staff can easily catch potential issues like claim denials, underpayment, or denied reimbursement.  Using payment posting to its fullest extent cannot only help you to catch errors but also enable you to take appropriate actions to address the problems. Let’s discuss it in more detail. If a medical claim gets accepted and processed towards payments from the insurance companies. Then the payers issue a check or do the Electronic Fund Transfer (EFT) to the healthcare practitioners. Insurance payers also attach a document_ Explanation of Benefits (EOB).

It is pertinent to mention here that the providers can only get payments if the patient has signed the assignment of benefits (AOB) document. Otherwise, the payments will directly go to the patients. An AOB agreement means the patients transfer the insurance claims rights or benefits of the policy to the health care providers. In this way, practitioners can become able to file a claim, make repair decisions, and collect insurance payments directly from the insurance companies_on the behalf of the patients. Subsequently, when the EOB is being sent to the billing department, they analyse and handle the payment posting for further process. For instance, payments are posted to healthcare providers. On the other hand, rejected or denied claims are sent back to the billers and coders. So they can identify and rectify the errors for submission within timely filing limits and even resend their faxes with Cocofax.

Explanation of Benefits (EOB)

An EOB is an explanatory document issued by the insurance companies to the medical practitioners. It contains the complete details about the payments after the determination of the claim, which can help your customers know how much does a podiatrist cost.

An EOB contains the following information;

  • Payer Name & Address.
  • Patient’s complete name.
  • Name and address of the providers.
  • Member ID#: It is also known as the policy identification number.
  • Claim received Date: It refers to the date, on which the concerned insurance companies receive the medical claims from the provider’s billing staff.
  • Payment or denial date: It is the date on which payers process the claims to issue the payments to the providers or deny the reimbursements.
  • DOS – Date of Service: when a health care professional provided medical services to the patients.
  • CPT Code – Procedure code.
  • Billed Amount – It is also called as charge amount for each service performed by healthcare providers.
  • Claim Number – It is also called a Document control number or Transaction Control Number, which will be assigned by the payer for each claim as soon as they receive it in their system.

If the claim is paid, it contains the following information:

  • Allowed Amount: It is an amount an insurance company considers fair for a particular medical procedure or service.
  • Paid amount:  Paid Amount = Allowed Amount – Patient responsibility.
  • Patient Responsibility: it is the balance percentage that patients are supposed to pay in terms of copays, co-insurance or out of pocket expenses_depnds on the insurance policies of the consumers.
  • Write off Amount: It represents the amount that a medical practitioner waives off for a specific medical procedure. It can be calculated as; Write off Amount = Billed Amount – Allowed Amount.
  • Check date.
  • Electronic Fund Transfer.

Why is Accurate Payment Posting Significant?

Inaccurate payment posting can actually negatively impact your entire revenue cycle management. Because it can also affect the accuracy and efficiency of the claims that are being submitted to the secondary or tertiary payers. Moreover, here is the following reason that justifies the fact that having efficient payment posting in place is more crucial than ever before:

  1. Analyzing RCM Process:

When payment posting is handled accurately, providers can get to know the possible flaws in the revenue collections management. For example, insurance agencies send the EOB document, which explains the status of the payments, either paid or unpaid. When a claim gets denied, you can take immediate action to respond to it for capturing lost payments. Moreover, when payment posting staff analyse and compare the received reimbursements with the actual negotiated rates with the payers, they also get to know the irregularities (if any). 

  1. Denial Resolution:

We all know the fact that effective claim denials management is crucial to streamline the cash flow as well as it also helps to maximize the accounts receivable collections. As we have already discussed, the payment posting also uncovers the denied/rejected claims. In this way, billers analyse the reasons for denials. And implement smart denial management solutions to appeal the denied claims.

On the other hand, failure to catch the denied claims results in the pile of unresolved medical invoices. This not only increases the administrative burden of the providers, but sometimes providers lose the compensation permanently. In addition to this, efficient remittance processing also helps to identify the denials trends. Knowing the frequent errors that cause claim denials, enable RCM staff to adopt effective medical billing and coding solutions to prevent the claim denials in the future as well.

What Providers Can Do?

Now, you have a complete understanding of the payment posting, more importantly, its significance for your financial stability. Now, what’s next? As a healthcare provider, you must adopt the right strategies to keep this process on the right track. For this purpose, you should!

  • Hand over this responsibility to the only well-experienced and highly trained team that must have a wide range of experience of working in the billing industry.
  • Conduct regular training sessions for your administrative teams. So, they can stay updated about their roles and more importantly, the latest trends in the healthcare industry.
  • Make payment posting a Key Performance Indicator (KPI), which is being tracked and monitored regularly to know the effectiveness and the accuracy of the revenue cycle management process.
  • Never compromise on the regular audits to get a complete understanding of how your staff is performing this task.

Trending Posts

About US

365 Business is a new organization dedicated to the small and medium businesses (SMBs) of the world. Our mission to to provide well researched and actionable business tips that business owners and entrepreneurs can digest and leverage in 5 minutes or less.

365 business tips

Popular Articles

Subscribe For More!

You have been successfully Subscribed! Ops! Something went wrong, please try again.


Edit Template