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  • Angel Callaway, CPC, CPB

How Important is Payment Posting?

Payment posting is essential to the overall financial health of your practice. It has a high potential to increase profits and smooth out the overall medical billing process.

The payment posting process affects many functions within an office and can have a major impact on patient satisfaction, and overall financial performance. Payment posting is the first line of defense to finding payer problems, such as medical necessity denials, non-covered services, and prior authorizations denials.

Understanding Remittance Advice Remark Codes (RARC) and Claim Adjustment Reason Code (CARC) is a key to correct payment posting. CARC tells the payment posters why a claim or service line item was paid differently than it was billed. RARCs are used to supply additional explanations for an adjustment already described by the Claim Adjustment Reason Code or to convey information about remittance processing.

HIPAA instructs health plans to conduct standard electronic transactions using valid standard codes. Medicare policy states that Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) are required in the remittance advice and coordination of benefit transactions. CMS instructs its MACs to conduct updates based on the code update schedule that results in publications three times per year, usually around March 1, July 1, and November 1. These updates can affect how your payments are posted if your posting department does not stay up to date with these changes.

A complete list of CARCs and RARCs can be found on the X12 website maintained by X12 and distributed by WPS

Payment posting should be an integral part of the revenue cycle, regardless of whether you bill in-house or use a third-party billing company. Payment posting and account reconciliation is a critical step in the revenue cycle.

There are numerous ways you can improve your posting department effectiveness:

  1. Train your payment posting staff. The ability to read and understand Explanation of Benefits and Electronic Remittance Advice is crucial to payment posting. Understanding information contained in the remittance advice or explanation of benefits is the first step to an effective payment posting department.

  2. Supply access to payer websites Access to payer websites can help with understanding a denial or reversal of payment. When a reversal of payment is listed on the remittance advice, it often refers you to an earlier claim. Access to the payer website can help find the earlier claim and supply additional posting information.

  3. Ensure you have enough staff to handle the volume. Staffing should be based on the volume of payments, not the number of practitioners/clients. The number of payments received daily should set the number of staff you need to hire.

  4. Watch your write-off adjustments. Be sure your staff is using the correct adjustment codes. Don’t just write off a balance the remittance advice states it is not payable. Question if the adjustment is truly an adjustment or should it have been paid? Before write-offs are posted, instruct your staff on what should be flagged for an account representative to review and what is truly a write-off.

  5. Post zero-pay remittance advice promptly. Many zero-pay remittance advice is not only a denial of claim payments. Zero-pay remittance advice may have claims that were adjusted by the insurance and the patient is responsible for the deductible. Posting of the zero-pay remittance advice allows the claims to be dropped to patient responsibility or submitted to secondary insurance for payment. Many Medicare patients have secondary insurance that will pick up the deductible. Failure to post zero pay ERAs/EOBs can result in lost revenue due to timely filing deadlines and incorrectly processed claims.

When payment posting is accurate, your practice can thrive through better cash flow, problem and trend identification and, denial management. Apex Practice Solutions offers complete revenue cycle management. Contact us today to improve the financial health of your practice.

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