Providing the right treatment for your patient is never enough to run a successful practice. Why, you may ask? The answer is simple - you need constant cash flow to pay your administrative staff, purchase the right equipment, and other tools needed to sustain your practice.
After all, without steady revenue, even the best healthcare provider will experience loss. That’s why understanding your billing process is an important step in payment posting.
This process ensures that payments from insurance companies, adjustments, and denial are properly documented in the billing system.
With the help of DME billing software, this process becomes easier and more accurate. The software ensures that payments from insurance companies, along with any adjustments or denials, are properly recorded and tracked in the billing system.
When done correctly, payment posting keeps your practice's revenue cycle management accurate. However, an inadequate process will lead to revenue loss and unsatisfied patients.
In this blog, Mediraft gives a detailed explanation of payment posting in medical billing and how it makes your practice's finances smoother and more accurate.
What Is Payment Posting in Medical Billing?
Payment Posting in medical billing is known as an essential step that involves carefully and accurately recording all payments, adjustments, and denials received from insurance companies or patients to the medical billing system.
This process gives a summary of the entire payment details, helping healthcare providers to see how much money has been collected from different payers.
The Importance of Accuracy in Payment Posting
The process of payment posting is a crucial step that often requires great attention to detail. Mistakes, no matter how small or big, in the entry of the payments can provide an incorrect insight into the practice's financial statements.
For example, if your payments team accidentally enters a $2000 bill instead of $200 payment. If it is not seen and corrected before the payment invoice is generated, it can lead to incorrect patient billing. This action often leads to loss of trust, and your accounts receivable management will also report inaccurate figures, resulting in inaccurate revenue.
A good payment posting process ensures seamless recording, spotting errors, and rectifying them. It also helps in identifying potential challenges that would occur and providing solutions to correct them.
Key Documents for Payment Posting
To post payments correctly, healthcare providers rely on two important documents. These documents help them understand exactly what was paid, what wasn’t, and why. They include the following:
Explanation of Benefits (EOB)
The EOB is a document that the insurance company sends after processing a claim. It gives a detailed summary of how the claim was handled. The EOB shows the following:
- The total amount that was billed for the services
- How much the insurance company agreed to pay
- Any adjustments or write-offs made by the insurer
- The portion the patient still needs to pay (like co-pays, deductibles, or coinsurance)
It is like a receipt from the insurance company that explains how they decide on the payment amount. This helps both the healthcare provider and the patient to have a detailed understanding of the amount reimbursed.
Electronic Remittance Advice (ERA)
The Electronic Remittance Advice is the electronic version of the EOB. It is a digital file that includes detailed information about payments for several claims at once. The ERA makes the process faster and more efficient because it can be directly uploaded into billing software.
ERA allows payment data to be automatically matched to the correct claims, thereby reducing manual work and minimizing the chance of human errors. With this, billing staff working for healthcare providers are able to post payments accurately and quickly.
The Step-by-Step Process of Payment Posting
This process of payment posting includes the following:
- Receive and Review EOBs
After insurance sends payment documents to the healthcare provider, they are reviewed by the billing staff to confirm if they match the medical claim submitted.
- Match Payments to Claims
Every payment received is carefully matched to the correct claim submitted to prevent error. - Record Adjustments and Write-Offs
This step involves documenting every change made to the medical bills. It includes insurance discounts, patient co-pays, deductibles, and services that the insurance company does not cover. - Posting Secondary Insurance Payments
For patients having more than one insurance plan, the primary insurance pays first, while the secondary insurance company pays the remaining balance. - Manage Denials and Rejections
If a claim is denied or rejected by the insurance companies, it is immediately flagged in payment posting and reviewed to know why the claim was denied, corrected, and then appealed.
The Benefits of Payment Posting
Accurate Patient Accounts
A payment posting that is done without any mistake gives a correct detail of the patient account. This makes patients easily understand their bills while reducing confusion and building trust.
Ensure Compliance and Transparency
Payment posting helps healthcare providers keep a transparent record of their revenue. This is very important for audits and staying in compliance with insurance regulations.
Reduces Medical Billing Errors
The process of reviewing every insurance payment and linking them to the right claims through payment posting helps in detecting errors early.
Improves Efficiency and Saves Time
When a practice has a smooth payment posting process, it relieves the burden on its administrative staff and ensures its revenue cycle runs efficiently.
In Conclusion
Understanding how payment posting work helps healthcare providers make informed decisions and make sure their payments are correctly recorded and accounts receivable are appropriately managed. This process also ensures that they have constant cash flow and improves the revenue cycle management.
Medicraft is a software that helps healthcare providers sustain and thrive in their practice. We offer accurate posting services and features that reduce manual errors, save time, and keep your financial records organized.