Health Informatics Week 6

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CHAPTER

11 Posting Payments

and Creating

Statements

Learning Outcomes

When you finish this chapter, you will be able to:

11.1 List the six steps for checking a remittance advice.

11.2 Describe the procedures for entering insurance

payments.

11.3 Explain how to apply insurance payments to

charges.

11.4 Explain how to enter capitation payments.

11.5 Discuss the purpose of appeals and postpayment

audits.

11.6 Compare standard patient statements and

remainder patient statements.

11-2

Learning Outcomes (Continued)

When you finish this chapter, you will be able to:

11.7 Explain the difference between once-a-month and

cycle billing.

11.8 Explain the procedure for processing a nonsufficient

funds payment.

11-3

Key Terms

• appeal

• appellant

• autoposting

• capitation payments

• claim adjustment group

code (CAGC)

• claim adjustment reason

code (CARC)

• claimant

• claim control number

• cycle billing

11-4

• electronic funds transfer

(EFT)

• electronic remittance

advice (ERA)

• explanation of benefits

(EOB)

• nonsufficient funds

(NSF) check

• once-a-month billing

• overpayment

• patient statement

• postpayment audit

Key Terms (Continued)

• Recovery Audit

Contractor (RAC)

• remainder statements

• remittance advice (RA)

• remittance advice remark

code (RARC)

• standard statements

• takeback

• X12 835 Electronic

Remittance Advice (835)

11-5

11.1 Working with the Remittance

Advice (RA) 11-6

• Remittance advice (RA)—document describing

a payment resulting from a claim adjudication

• Six steps for checking a remittance advice:

1. Check the patient’s name, claim control number, and

date of service against the claim.

2. Verify that all billed CPT codes are listed.

3. Check the payment for each CPT code against the

expected amount, which may be an allowed charge

or a percentage of the usual fee.

4. Analyze the payer’s adjustment codes to locate all

unpaid, downcoded, or denied claims for closer

review.

11.1 Working with the Remittance

Advice (RA) (Continued) 11-7

• Six steps for checking a remittance advice

(continued):

5. Pay special attention to RAs for claims submitted

with modifiers.

6. Decide whether there are any items on the RA that

need clarification from the payer, and follow up as

necessary.

• Electronic remittance advice (ERA)—

electronic document that lists patients, dates of

service, charges, and the amount paid or denied

by the insurance carrier

11.1 Working with the Remittance

Advice (RA) (Continued) 11-8

• X12 835 Electronic Remittance Advice

(835)—electronic transaction for payment

explanation

• Claim control number—unique number

assigned to a claim by the sender

• Autoposting—software feature enabling

automatic entry of payments from a remittance

advice

11.1 Working with the Remittance

Advice (RA) (Continued) 11-9

• Claim adjustment group code (CAGC)—used

on an RA/EOB to indicate the general type of

reason code for an adjustment

– Also abbreviated GRP

• Claim adjustment reason code (CARC)—used

on an RA/EOB to explain why a payment does

not match the amount billed

• Remittance advice remark code (RARC)—

code that explain a payer’s payment decision

11.2 Entering Insurance Payments 11-10

• Insurance payments are entered in the Deposit

List dialog box of MNP

• To enter insurance payments:

– Select Enter Deposits/Payments on the Activities

menu, or click the Enter Deposits and Apply

Payments button; the Deposit List dialog box opens.

– Complete the fields in the Deposit List dialog box.

– Click the New button; the Deposit dialog box appears.

– Complete the fields in the Deposit dialog box.

– Click the Save button, and the deposit will be

recorded.

11.2 Entering Insurance Payments

(Continued) 11-11

• Electronic funds transfer (EFT)—electronic

routing of funds between banks

• Capitation payments—payments made to

physicians on a regular basis for providing

services to patients in a managed care plan

11.3 Applying Insurance Payments to

Charges 11-12

To apply insurance payments to charges in MNP:

– Highlight the payment in the Deposit List dialog box.

– Click the Apply button; the Apply

Payment/Adjustments to Charges dialog box opens.

– Enter the payment in the middle section of this dialog

box.

– Click the Save Payments/Adjustments button to save

an entry; click OK when an information dialog box is

displayed.

– Repeat as needed, then use the Close button to exit.

11.4 Entering Capitation Payments 11-13

To enter capitation payments in MNP:

– Open the Deposit List dialog box, then the Deposit

Window.

– Select capitation from the Payor Type drop-down list

in the Deposit window.

– Enter the appropriate deposit information.

– Enter a second deposit as an insurance payment with

a zero amount and click Save; the deposit appears in

the Deposit List window.

– Use the List Only Claims That Match dialog box to

locate patients who have claims covered by the

capitation payment.

11.4 Entering Capitation Payments

(Continued) 11-14

To enter capitation payments in MNP (continued):

– Once patients have been identified, the Claim

Management dialog box is closed and the Deposit

List dialog box is opened.

– Apply the zero payment to the patient accounts using

the Apply button.

– In the Apply Payment/Adjustments to Charges dialog

box, enter an adjustment equal to the outstanding

balance.

– Click the Save button to record the payments.

11.5 Appeals, Postpayment Audits,

Overpayments, and Billing Secondary Payers 11-15

• Appeal—request for reconsideration of a claim

adjudication

– Used to challenge a payer’s decision to deny, reduce,

or otherwise downcode a claim

• Claimant—person or entity exercising the right

to receive benefits

• Appellant—person who appeals a claim

decision

• Postpayment audit—review conducted after a

claim is adjudicated

11.5 Appeals, Postpayment Audits,

Overpayments, and Billing Secondary Payers

(Continued)

11-16

• Recovery Audit Contractor (RAC)—entity that

audits Medicare claims to determine where there

are opportunities to recover incorrect payments

from previously paid but noncovered services,

erroneous coding, and duplicate services

• Overpayment—improper or excessive amount

received by provider from payer

• Takeback—balance that a provider owes a

payer following a postpayment audit

11.6 Creating Statements 11-17

• Patient statement—list of the amount of money

a patient owes, the procedures performed, and

the dates the procedures were performed

– Sent to patients to collect an account balance that is

the patient’s responsibility

• Explanation of benefits (EOB)—document

showing how the amount of a benefit was

determined

11.6 Creating Statements (Continued) 11-18

• Standard statements—statements that show all

charges regardless of whether the insurance

carrier has paid on the transactions

• Remainder statements—statements that list

only charges that are not paid in full after all

insurance carrier payments have been received

11.7 Editing and Printing Statements 11-19

• In MNP, the Edit button in the Statement

Management dialog box is used to perform edits

on account statements.

• Once-a-month billing—type of billing in which

statements are mailed to all patients at the same

time each month

• Cycle billing—type of billing in which statement

printing and mailing is staggered throughout the

month

11.8 Nonsufficient Funds (NSF) 11-20

• Nonsufficient funds (NSF) check—check that

is not honored by the bank because the account

lacks funds to cover it

• When a practice receives an NSF notice from a

bank, an adjustment is made in the patient’s

account.

– The patient owes the practice the amount of the

returned check.

– Most practices charge a fee for a returned check.