Cash Posting

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Cash Posting or Payment Entry Department|
* Posting of the details contained in the EOB * Should post the relevant charge in the appropriate patient’s account * Initiate the process for the denied claims. Payment Entry Process - Flowchart| |

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CASH POSTING OR PAYMENTS|

When a claim has been processed and paid, the amount paid will have to be applied to the amount charged for individual patient’s treatment in the Medical Billing Software.  This makes it possible for the billing office to track the payments received from different angles.  The billing office would want to track the payments received based on differed criteria.

Cash posting or the correct application of payments to their respective charges in the medical software is very important as any wrong posting may result in wrong accounting.  Cash postings will be done based on checks and Explanation of Benefits (EOBs) that are sent by the insurance companies and the checks sent by the patients.  An EOB is usually sent with a check and explains what charges have been paid, for which patient, and for which Date of Service how much was paid.  In case of a denial, and EOB alone is sent and it explains which charge has been denied and for what reason.  The EOBs will be used to verify any discrepancies from the expected payment.  EOBs are the only hard-copy evidence the billing office has of the insurance company receiving and processing the claims sent to them and will have to be filed carefully for future reference.

Before getting deep into payments let us understand a few terminologies that we may come across in a typical EOB.Billed Amount.  This is the amount charged by a physician as a compensation for his services.  The billed amount will reflect on the claim against the treatment that was performed.Allowed Amount.  Most insurance companies have a fixed payable amount for each of the different services performed by the physicians.  They fix this amount based on various in-house calculations like cost of the treatment, geographical location of the practice, average charge of all physicians for that procedure etc., Insurance companies will pay only their allowed amount regardless of how much the physician bills.Write-off:  When the physician’s billed amount is more than a participating insurance company’s allowed amount, the insurance company will pay it’s allowed amount and the difference between the billed and the allowed amount will be written off or adjusted.WRITE OFF=BILLED AMOUNT – ALLOWED AMOUNTParticipating/Non-participating:  A physician can either have a participating or a non-participating relationship with an insurance company.  A participating relationship is one in which the physician accepts a payment of the insurance company’s allowed amount as full payment, for any of that insurance company’s beneficiaries.  This is regardless of how much the physician billed for his services.  If the physician bills over the allowed amount, the insurance company pays the allowed amount and the difference is written-off.  The patient cannot be billed for the balance unless the insurance company’s eob specifically says so.  A doctor billing a non-participating insurance company will also get paid according to their allowed amount.  The difference here is that the doctor can bill the patient for the balance.With an example let us see how a participating and non-participating physician gain or lose when collecting from an insurance company.  The insurance company taken in this example is Medicare.  As a policy Medicare pays 80% of the allowed amount in the case of a participating provider.  They pay 80% on 95% of the allowed amount in the case of a non-participating provider.  Dr.Par is participating and Dr.Non-par is not participating with the insurance company.| |

 | Billed Amount| Allowed Amount| Amount Paid| Amount Due From Patient| Dr.Par| $75| $70| $56|...
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