Medical Billing process – Payment posting with sample EOB and posting | Medical Billing and Coding

How to post payments – Payment posting process – Introduction

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.

Explanation of Benefits

Explanation of Benefits or EOB is the detailed statement of the carrier’s determination of the claims processed. The determination can result in a payment or a denial.

Medical billing payment posting - convert it to ERA

The Explanation of Benefits contains the following information:

Name of the payer, Name of the provider, Pay-to address, Name of the patient, Name of the member, his id #, date of service, procedure code, amount billed by the provider, amount allowed by the payer, co-insurance, deductible, amount paid by the payer. The amount paid by the payer is equal to the amount shown by the check.

The following terms in relation to the above needs explanation:

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.

Cash Posting

With the EOBs and the check copies and the deposit statement, we should start posting cash. The following is the process of cash posting:

The deposit statement should first be checked with the EOBs and check copies received. Check whether all EOBs and check copies mentioned in the deposit statement are received. Check the deposit total. The date of deposit will be the date in the deposit statement. The batch number will be the Julian date of the date of deposit followed by the serial number. Put each deposit file in a folder and write the following on top of the folder: Name of the Project; CASH DEPOSIT FILE; Date of receipt; Date of Deposit; Batch #, Number of checks and the total amount.

Cash Posting is described here with software i used however the principles are the same in whichever software you use for cash posting. During cash posting the following fields are required.

Batch Details Accounting date,

[This is date fixed according to a schedule by the billing office based on which the entries are made. This may be a daily schedule and should be opened and closed every day.]

Date of Deposit

[Date of Deposit is the date as given in the deposit statement and is the date the bank deposits the checks received in the lock box.]

Batch #,

[This is a number again fixed according to the requirement of the project. This is four-digit number and is generally the Julian date followed by the serial number.]

# of Checks, Total Amount
[Enter the # of checks and total amount from the deposit statement]

CHECK DETAILS Check #, Check date, Check Amount

[Enter the check #, check date and check amount for the check copies received]

Payment from:

X Insurance . Patient
[Check the correct box]

Filing Ref., EOB/RA #, EOB Date
[For Filing Ref., Enter the line item reference. The line item reference will be as follows: For e.g. 01.02.03252000 where 01 will be the serial number of the check in the batch/ deposit statement; 02 is the batch #; and 03252000 is the date of deposit.EOB/RA # is the number given in the Explanation of Benefits/ Remittance Advice.EOB date is the date given in the EOB.]

Insurance/Patient
If you have checked Insurance in the Payment From Field above, you will have to give the insurance company #. If you have checked Patient in the Payment From Field above, you will have to give the Patient account #.

Here are i have listed some common payments.

What are the payments we have ?

Hello Friends,
Other than regular insurance payment we need to know other payments also. They are

Offset:

· If there is an adjustment in an EOB shown by the insurance company of a claim previously paid incorrectly and now they are taking back that amount. Its called offset.

Advance Payments:
The following category of payments are posted as advance payments:
· If the patient makes payment of co-pay at the time of service.

Refunds:

The following category of payments are posted as refunds:

· If the same carrier has paid the claim twice.
· Payment received from a carrier for a claim already paid by another carrier.
· Payment received from both the carrier and the patient.
· If the patient has paid for the same ticket twice.

Interest:

The following category of payments are posted in interest:
· If in an EOB there is an additional payment made apart from the allowed amount denoting interest for delay in payment

Capitated Payments

The following category of payments are posted under this heading:
· If any payment has been received for a capitated patient (which the insurance has paid the doctor under the agreement.) it has to be posted here.

Incentive

The following category of payments are posted under this heading:· Additional payments received from Medicare due to the facility being in a HPSA (Health Professional Shortage Area). These are areas that are shortage of doctors. These areas may be in rural villages or in a big city. It may be the whole state of just a small town. The providers get 10% bonus on Medicare payment for services rendered in these areas. In order to get this bonus, we need to put a “QU” modifier in the claim if service was rendered in an urban area and “QB” modifier if service was rendered in a rural area.

Claim

Claim # is the ticket number followed by 1, 2 or 3 for primary, secondary and tertiary insurance companies respectively.

•Claim
•Line Item
•Patient Payment

•CLAIM

Select this option if you are going to post the check by claim irrespective of the number of line items in the claim. Once we check this option, the details with reference to the claim are displayed in the claim status box. The following details are displayed: Patient Name, Insurance, Claim Status, Patient Type, First ID, Second ID, Par/Non-Par and the details of amount posted for a particular check.

In addition to the claim status box, the following box appears on the screen
Post By Claim The following field need to be entered as per EOB

Claim Bal: This will show the total balance in the claim (For e.g. if there are three line items in the claim and the total billed amount is $150, then $150 will be displayed in the Claim Bal box).
Paid Amount: Here you will have to post the actual paid amount as given in the EOB.
Co-Ins: Here you will have to post the actual amount of Co-Ins or Co-pay as given in the EOB.
Deducible: Here you will have to post the deductible amount as given in the EOB.
EOB AllowedAmount: EOB Allowed Amount is generated automatically. (EOB Allowed Amount = Paid Amount + Co-Ins + Deductible). The System allowed amount will popup once you are in this field.
Write off: Write off is the difference between billed amount and system allowed amount.
We generally post the secondary payments by claim when we have earlier flipped the primary claim.

• LINE ITEM
Select this option if you are going to post the check by line item.Select this option if you are going to post the check by line item. Similar to the claims option, once you check this option, the claim status box will appear with the same details as given above.

Line Bal: This will show the total balance for the line item that is displayed.
Paid Amount: Here you will have to post the actual paid amount as given in the EOB for each line item.
Co-Ins: Here you will have to post the actual amount of Co-Ins for the line item as given in the EOB.
Deductible: Here you will have to post the Deductible amount for the line item as given in the EOB.
EOB Allowed Amount: This is generated automatically. (EOB Allowed Amount = Paid Amount + Co-Ins + Deductible) for each line item. The System allowed Amount will popup once you are in this field.
Write off: Write off is the difference between the Billed Amount and the System Allowed Amount.

Unposted:

The following category of payments are kept unposted: • If a patient for or from whom a payment is received is not traceable in the system. • If the payments are received for an existing patient in the system but for a DOS not billed by us.

• If a payment has been received for a claim which requires AR verification.

• If only the check is received but EOB not received.

For payments kept in unposted for reasons (3&4) once the necessary information has been obtained, the unposted entry has to be retrieved from the system and posted. ..

Here is the sample paper EOB and how is posted in the software. Check the allowed , paid , patient responisbility in the EOB and post in the software in the respective field.