What Is Payment Posting in Medical Billing?
Delivering top-notch patient care, while always the most important part of your work, can’t sustain your business alone. You’ve got to consider the money side of things. What exactly happens after you send out a bill and before the payment lands in your account? That’s where payment posting in medical billing comes into play.
This process ensures that payments from insurance companies and patients are accurately matched to the appropriate medical claims.
But what exactly is payment posting in medical billing? And why does it matter? This blog post examines the payment posting process, its significance, key steps, and tools that can streamline workflows, enabling you to optimize your billing operations.
Key Takeaways:
- Understand the payment posting process and the key documents involved
- Discover the steps in the payment posting workflow
- Learn how the right tools improve payment posting accuracy and your practice’s financial health
Understanding the Payment Posting Process
What Does Payment Posting Involve?
So, what is payment posting in medical billing? At its core, it’s the critical step of meticulously recording all payments, adjustments, and denials received from insurance companies and patients directly into your billing system.
It’s not just about noting that payment came in; it’s about detailed reconciliation that ensures every dollar—every cent—is accounted for. It involves:
- Logging payments: Accurately recording how much was paid by an insurance company or a patient
- Applying adjustments: This includes items such as contractual write-offs (the difference between your charge and what the insurer agrees to pay), patient co-payments, deductibles, and coinsurance
- Tracking denials and rejections: Understanding why a claim wasn’t paid in full (or at all) is key for follow up and making sure you don’t miss out on revenue
- Updating patient accounts: Ensuring that each patient’s financial responsibility is accurately reflected so there are no surprises for them or you
Key Documents: Explanation of Benefits (EOBs) and Electronic Remittance Advice (ERA)
You can’t do payment posting without these two essential documents:
EOB: This is the paper or electronic statement you receive from an insurance company for a specific patient’s claim. It spells out what services were covered, the amount billed, what the insurer paid, and how much the patient owes.
ERA: This is usually an electronic file or ERA that provides a detailed breakdown of payments made by an insurer for multiple claims. Both EOBs and ERA in medical billing are the primary sources of facts for payment posters.
Manual vs. Electronic Payment Posting
While some practices may still use a combination of manual and electronic payment posting, the future is moving toward automating payment processing. What’s the difference?
- Manual Payment Posting: This involves healthcare billing staff manually entering payment details from EOBs or ERA into the billing system. Although cost-effective initially, manual posting is labor-intensive and prone to errors.
- Electronic Payment Posting: Electronic posting uses automation to import payment data directly into billing software. This method is faster, more accurate, and reduces human errors.
For example, some electronic health record (EHR) systems can automatically read ERA files, significantly speeding up the process and reducing billing errors.
DrChrono, an integrated cloud-based EHR, allows ERAs to be received directly into an EHR platform with no additional software required. The solution can filter ERAs for more robust analysis, as well as enable settings to ensure that the billing status automatically updates when you receive an ERA from a payer.
Steps in the Payment Posting Workflow
Think of payment posting as a well-oiled machine following a set of actions to keep things running smoothly. Here’s an overview of the key steps:
Receiving and Reviewing EOBs
Providers first receive EOBs and ERA from insurance companies. These documents are reviewed carefully by the billing staff to ensure that payment information matches the submitted claims.
Matching Payments to Claims
This is where the detective work begins. Every single payment received needs to be carefully matched to the exact claim you submitted. Getting this wrong can cause major headaches down the line.
Accurate posting ensures that the appropriate amount is allocated and reduces the chances of billing errors.
Recording Claim Adjustments and Write-offs
Adjustments are recorded during this step. Insurance companies often have pre-negotiated rates with providers. The difference between your full charge and what they pay is a contractual adjustment, which needs to be accurately recorded. However, not all adjustments are created equal.
For example, in Medicare, a provider-level adjustment could be:
- An increase in payment for interest due because of the late payment of a clean claim by Medicare
- A deduction from payment resulting from a prior overpayment
- An increase in payment for any provider incentive plan
Generally, though, contractual allowances or patient co-payments are typically recorded during this step. Write-offs for non-covered services are also documented.
Posting Secondary Insurance Payments
If your patient has more than one insurance plan, the primary insurance pays first. Any remaining balance is then paid by the secondary insurance. Payment posting involves handling subsequent payments and their associated adjustments, ensuring everything is aligned.
Managing Denials and Rejections
HealthCare.gov insurers denied nearly one out of every five claims submitted for in-network services and an even larger share (37%) of claims for out-of-network services in 2023, according to a KFF analysis.
The takeaway? Not every claim gets paid on the first try. When a denial or rejection is noted during payment posting, it immediately flags a need for denial management in medical billing.
This means investigating why the claim was denied and taking steps to appeal or correct it to recover that revenue. Understanding the reasons for denial also helps prevent similar issues in the future.
Why Payment Posting Matters in Revenue Cycle Management
So, why should providers care about payment posting beyond just getting paid? Because it’s a fundamental pillar of revenue cycle management (RCM).
Without an efficient and accurate process, your entire RCM can come to a halt, resulting in lost revenue, frustrated patients, and compliance risks. Here are key reasons why payment posting matters:
Accurate Patient Account Posting
Accurate payment posting ensures that patient accounts are always up to date, showing their true outstanding balance. This transparency prevents billing surprises and disputes, resulting in satisfied patients who understand their financial responsibilities.
Billing transparency also increases patient trust and reduces the likelihood of patients switching providers due to billing issues.
Medical Billing Reconciliation and Compliance
Payment posting is vital for medical billing compliance. It allows for precise reconciliation of all accounts, making sure that what you billed, what was paid, and what is still owed all match up perfectly.
This meticulous record keeping is non-negotiable for audits and meeting regulatory requirements.
FROM ONE OF OUR PARTNERS: Overcoming the Challenges of Scaling Your Revenue Cycle
Reducing Billing Errors and Improving Efficiency
By systematically processing payments and flagging any discrepancies early, payment posting plays a huge role in reducing billing errors.
Fewer errors mean less time spent chasing down incorrect payments, re-submitting claims, or dealing with patient queries. This translates directly to improved efficiency across your entire billing department.
Tools to Improve Payment Posting Accuracy
Advanced tools are a necessity for providers and medical billing staff to improve payment posting accuracy and maintain a financially healthy practice. Here’s how technology makes a difference:
Automated Payment Posting
Automated payment posting solutions can read ERA files and automatically apply payments to the corresponding claims in your system. This significantly reduces manual effort, minimizes human error, and accelerates the entire process.
Integration with EHR and Billing Systems
EHR and billing system integration creates a unified view of patient information, clinical data, and financial records. This connectivity streamlines the entire revenue cycle, from the moment a patient schedules an appointment to the final payment being posted. It means fewer instances of duplicate data entry and fewer errors caused by information silos.
For example, DrChrono integrates an EMR, patient engagement, and billing into a single platform, accessible via your iPhone, iPad, or web browser. This integration allows providers to deliver healthcare on demand.
Payment Posting Software Features to Consider
If you’re looking to upgrade your system, here are some key medical billing software features to prioritize for payment posting:
- Robust ERA processing: The ability to automatically import and interpret ERAs
- Clearinghouse connections: This feature allows claims to be submitted electronically to the payer; it also enables payment and denial information to flow directly into an EHR and posts electronically (i.e., ERA)
- Denial management and analysis tools: Features that flag denials, categorize them, and help you track follow-up actions; these tools also pinpoint which insurance payers most frequently deny your billing claims
- Customizable reporting: Easily view your payment trends, denial rates, and overall financial performance
Role of the Clearinghouse in Payment Posting
Think of a clearinghouse as the essential bridge between your practice and the insurance companies. They are crucial for transmitting your electronic claims efficiently and, just as importantly, for receiving those electronic ERAs back from the payers. Without a good clearinghouse, electronic payment posting wouldn’t be nearly as smooth or effective.
Ready to Streamline Your Payment Posting Process?
Payment posting is a crucial aspect of your practice’s financial well-being, as it directly impacts your cash flow, compliance, and overall efficiency.
By understanding these steps and embracing the right tools, you can transform your payment posting from a potential bottleneck into a powerful engine for your revenue cycle.
Ready to optimize your payment posting? Contact DrChrono today to discover how our solutions can help you achieve greater financial stability for your practice.
Frequently Asked Questions
What is payment posting in medical billing?
Payment posting in medical billing is a crucial process that accurately records all payments, adjustments, and denials received from insurance companies and patients directly into a provider’s billing system.
What are the key steps involved in the workflow?
The general steps include:
- Receiving and reviewing EOBs
- Matching payments to claims
- Recording claim adjustments and write-offs
- Posting secondary insurance payments
- Managing denials and rejections
What role do advanced tools play in improving payment posting accuracy?
Advanced tools are necessary to improve accuracy by automating tasks and integrating data. They significantly reduce manual effort and human error. Features such as automated payment posting (reading ERAs) contribute to a more efficient and accurate payment posting process.
How does payment posting help reduce billing errors?
By systematically processing payments and flagging any discrepancies early in the process, payment posting plays a significant role in reducing billing errors. Proactive identification means less time spent correcting mistakes, re-submitting claims, or addressing patient questions, leading to improved billing efficiency.