Businesses rely on more than just skilled employees and high-quality services. Financial management also plays a major role in the sustenance of any business. Similarly, to run a healthcare practice, a systematic revenue cycle and a strong financial system are essential. An essential component of the revenue cycle management procedure is payment posting.
But what exactly is payment posting in medical billing? And why does it matter? In simple words, it is the process of accurately recording payments received from insurance payers and patient accounts for the medical services provided by a healthcare practice. It ensures that the financial information captured during the billing process is properly reflected in the organization’s revenue records. It serves as the financial checkpoint, ensuring every dollar received is accurately recorded and that any outstanding amounts are checked and settled on time.
This blog talks about the process of posting payments, including its importance and challenges. So let’s get started right away!
Importance of Payment Posting Process in Medical Billing
As emphasized above, payment posting, or cash posting, is an essential part of the revenue cycle. Or more precisely, it completes the revenue cycle, helping the healthcare practice reconcile its accounts and check whether the billed amounts match the payments received.
The advantages listed below further highlight the need for accurate payment posting in medical billing.
A Healthy Cash Flow
In the healthcare sector, your practice is not going to thrive without an active cash flow. Poor cash flow results in lower profit, poorer employee satisfaction, and ultimately impaired operations and services for the practice. As a result, your practice won’t be able to offer patients high-quality care.
Healthcare firms can see incoming revenue in real time when payments are posted consistently. That’s why posting payments on time makes it easier for practices to handle payroll, operating costs, and expenses.
Accurate Revenue Tracking
Posting payments helps practices in tracking their incoming payments from insurance payers and patients. Understand it this way: suppose an insurance payer or the patient has not made a full payment. Instead, they pay a portion of your total reimbursement.
Posting the payment will help you identify the remaining balance. So, the process provides a clear view of the revenue that practices have collected and their outstanding balances.
Identify Payer Problems
Payment posting in medical billing also helps track the payer’s payment records. Your posting data will show your payer reimbursement trends, such as their payment speed, denial rates, and reimbursement accuracy.
It enables the practice to modify its follow-up plan by providing a clear report on the specific payer that delays payment or the recurring reason for claim denials.
Reduces Billing Errors
Accurate posting of payments also prevents practices from erroneous billing. It identifies if a payment is mistakenly applied to the wrong patient account and protects the practice from duplicate claim submission.
Healthcare practices now implement automated posting systems that highly reduce the chances of claim denials due to coding errors, thereby maximizing reimbursements and minimizing write-offs.
Improved Patient Satisfaction
Patients may get dissatisfied as a result of poor cash posting. Why? Because improper recording of payments will generate inaccurate patient statements. This can cause miscommunication with the patients and lead to arguments and a loss of trust.
When patients receive accurate payment statements, it gives them a sense of security that they are only billed for what they owe.
Patient satisfaction increases through open communication, prompt billing, and correct account balances.
What Are the Steps Involved in Payment Posting?
Now that you are fully aware of the benefits of payment posting in medical billing, let’s learn step by step how you can accurately manage this process in your healthcare practice.
Receiving Payment
The first step in the payment posting process is receiving payments from payers and patients. You can receive payments from payers or patients through various channels. However, some of the most common ways are electronic funds transfers (EFTs), credit cards, checks, and cash payments.
Reviewing and Verifying Details
In the next step, before you post payments, your billing staff must verify that the payment information in the Electronic Remittance Advice (ERA) matches the correct patient accounts and the practice’s internal billing records. Simply put, the billed amounts must match the payments received.
Posting of Payments
This is the stage where payments are posted in the ledger. The payer’s paid amount is recorded along with contractual adjustments, write-offs, and non-covered services, with the relevant denial and adjustment codes.
Check for Denials and Underpayments
In this step of the payment posting process, denials and underpayments are addressed. The billing specialists either rework and resubmit a claim or file an appeal to receive their rightful reimbursements.
Patient Statements
The balance payment, meant to be the patient’s responsibility, is sent to the patient’s account after insurance payment and adjustments have been posted.
For the remaining deductible amount, the practice will generate a patient statement and send it to the patient.
Account Reconciliation
This final stage confirms that every transaction is accurately recorded and any inconsistencies are noted for quick correction.
Types of Payment Posting in Medical Billing
There are various ways to post payments in medical billing, depending on the source and method of payment.
Insurance Payment Posting
This involves recording payments received from insurance payers such as Medicare, Medicaid, and commercial payers.
Patient Payment Posting
This includes payments made directly by patients through copays, deductibles, coinsurance, or self-pay balances, which are posted separately.
Manual Payment Posting
This happens when ERAs aren’t available, usually with the smaller payers, so the billing staff posts payments manually. However, this method is time-intensive and prone to posting errors.
Electronic Payment Posting/ERA Posting
It is the automated processing of electronically received payments. It allows payments to be auto-posted directly into billing software via EDI 835 transactions.
Payment Posting Challenges Faced by Healthcare Practices
Payment posting challenges may affect the revenue cycle performance. The following are some of the main obstacles that healthcare providers often encounter when posting payments.
High Volume of Claims
Typically, large practices have a high claim volume and, as a result, a high volume of payments that must be posted and reconciled within a limited period.
It is labour-intensive work for those practices that have not transitioned to electronic remittances. Managing large volumes of paper remittance advice increases the risk of lost documents and manual entry errors.
Payer-Specific Rules
Payer-specific rules are the most common challenge billers face at every step. Every insurance payer has its own fee schedules, denial reasons, and adjustment codes. As a result, healthcare practices’ internal billing teams frequently struggle with payment posting while adhering to payer-specific restrictions.
Underpayments
Insurance payers often deny claims or underpay due to incomplete documentation. If these underpayments are not recognized during payment posting, practices may lose revenue that could otherwise be recovered through appeals and follow-up.
Staffing and Training Gaps
Lastly, accurate posting of payments requires expert billing staff with financial knowledge who can understand payer logic, denial codes, and reconciliation procedures. An inexperienced or newly hired payment poster may incorrectly record payments, affecting the practice’s financial reports.
Final Thoughts
Healthcare practices should not take payment posting lightly, as a minor error could disrupt the revenue cycle.
If you, as a healthcare organization, are experiencing difficulties posting payer and patient payments, you can opt for payment posting services from industry experts.
At NeuraBill, we employ a team of experts who are well-trained and knowledgeable about every aspect of medical billing and coding. We can efficiently handle every step of the revenue cycle, relieving your staff from unnecessary burden. As a result, your team will have more time to focus on providing better healthcare to patients.
