What is Payment Posting in Medical Billing?

Medical billing seems to be a simple process for someone outside this industry. But it is considered a complex structure, consisting of multiple steps such as reconciliation, appeals, denial management, payment posting, etc. Accurate payment posting helps the healthcare provider keep a close eye on the payment received from patients and insurance companies, identify the outstanding balance, and report the financial records.

Let’s dive into this blog to better understand the basics of payment posting, the process involved, methods of payment, tools used and the role of payment posting in medical billing.

What is Payment Posting in Medical Billing?

Payment posting is a process of recording payments in medical billing software received from various sources, such as insurance companies, patients, and third-party payers. It allows healthcare providers to view payments from Explanation of Benefits (EOB) and patients, as well as insurance checks from Electronic Remittance Advice (ERAs).

Payment posting systems are essential for effective daily incoming payment tracking and influence the overall financial performance and status of healthcare organizations.

Process of Payment Posting in Medical Billing

Receiving Payment Information

The process starts when payments are received through various means, such as cash, checks, credit cards, electronic fund transfers (EFT), etc. The important information, such as the date of payment, amount paid, patient’s details, and relevance number, is fetched.

Verifying the payment details

The most important step of payment posting is verification of details. Payment posters verify their accuracy by cross-examining the payment details with the corresponding medical claims.

Payment Allocation

For patients with multiple outstanding bills, the payments are allocated among different accounts. For insurance payments, the process is quite different. Funds are distributed among different billing codes or lines.

Denials and Adjustments

Adjustments are made for contracts, write-offs, and contractual agreements based on the terms and conditions discussed with the healthcare payer. Payment posters have a duty to find out the status of the claim and make adjustments if the claim is partially paid or denied.

Manual or Electronic Payment Entry

The next step is to enter the information into the billing system. This depends on the type of payment method used by the healthcare facility. If it’s manual, all the payment information is added manually to the billing system. In electronic payment posting,technology automatically enters the payments into the billing system.

Updation of  Patient Account

All the patient information is fetched and updated. This step ensures that the changes in the patient’s account balance are properly updated and the financial status and record are accurate.

Reconciliation

Reconciliation is important as it makes sure that the posted payment actually matches the expected payments based on claims, denials,or any contractual agreement. Issues are filtered and resolved promptly.

Reports

Reports are generated about the financial performance of the healthcare provider and healthcare facility. These reports sum up the details, such as outstanding balances, payment trends, financial analysis, and decision-making.

Methods of Payment Posting

There are two major methods of payment posting:

• Manual Posting
• Electronic Posting

Manual Posting

In manual payment posting, all the payment information is added manually to the billing system. This type of payment posting is used when payment is collected in non-electronic form, such as checks, cash, etc. It is a traditional approach where human involvement is necessary for accuracy.

Manual Posting Process

Step 1: The process starts when the payment is received in the form of checks or cash. The payment poster then gathers all the important details, such as the payment amount, patient details, date,relevant reference number, etc.

Step 2: The next step is the manual entry of the information into the billing system. This step is important to ensure accuracy in recording the transaction.

Step 3: All the adjustments and allocations are manually added to the system. The adjustments are based on the payment distribution. Denials and contractual adjustments are also taken into account.

Step 4: The process is slow as all the processing and handling of the documents is manual, which leads to slower processing as compared to electronic posting.

Electronic Posting 

In electronic payment posting, technology automatically enters the payments into the billing system. Electronic payment posting is used in Electronic Remittance Advice (ERAs) as well as for Electronic Funds Transfer (EFT).

Electronic Posting Process

Step 1: The process starts when the electronic remittance advice (ERA) files are received from the patients and insurance companies. All the important details, such as payment information, patient details, and denials, are gathered.

Step 2: The information from the files is automatically fetched and updated in the billing system. All the patient accounts and financial records are updated.

Step 3: Adjustments are automatically generated due to predefined rules and contractual agreements with the health insurance companies.

Electronic payment posting reduces the hassle of manual data entry. The margin of error is reduced as machines are less likely to make mistakes.

What are the Payment Posting Tools?

Practice Management System

The practice management system features include integration with the billing process, automation, and reports to manage the whole revenue cycle.

Electronic Remittance Advice (ERA) Processing Tools

ERA processing tools handle the ERA files received from healthcare insurance companies. These tools help to extract important information such as payment details, denials, adjustments, etc.

Revenue Cycle Management (RCM) Software

RCM software generally streamlines the whole revenue cycle process. The features include automated reporting and reconciliation that affect the financial aspects of the healthcare facility. 

Cash Flow Management

Accurate payment posting allows a steady and smooth cash flow for healthcare providers. Accurate recordings and processing of payments streamline the revenue cycle process and thus enhance efficiency. This directly reduces the chances of delays in reimbursements.

Reconciliation of Payments

The step of reconciliation in payment posting ensures that the posted payment actually matches the expected payments based on claims, denials, or any contractual agreement. Issues are filtered and resolved promptly.

Efficient Handling of Payer Information

For accurate financial reporting and analysis, efficient handling of payer data is crucial. All the important data, such as payment amounts, denials, and adjustments, provided by healthcare payers is managed in the electronic remittance advice (ERA) file.

Financial Accuracy

Accurate payment posting directly affects the financial accuracy of the patient’s account. Reconciliation of payments helps to make sure that the financial records match the revenue earned from patient care.

How Medheave can Help you in Payment Posting?

Payment posting in medical billing plays a significant role in the healthcare RCM. Outsourcing this process to a reliable medical billing company like Medheave can bring significant enhancements in terms of accurate reconciliation of payment posting methods, managing adjustments, denials, and contractual obligations, optimizing reimbursement, and reducing revenue loss. Medheave utilizes electronic remittance advice (ERA) processing and provides reports and analytics on the financial status as well as outstanding balances and payment trends. This ultimately leads to effective revenue cycle management. Contact us today for seamless payment posting for your healthcare organization.