8Posting Insurance Payments

and Creating Patient Statements

Learning Outcomes

When you finish this chapter, you will be able to:8.1 Describe how an adjustment is calculated if the

payer pays less than the provider’s usual fee.8.2 List the five steps for processing a remittance

advice.8.3 Demonstrate how to enter insurance payments.8.4 Demonstrate how to apply insurance payments to

charges.8.5 Demonstrate how to enter capitation payments.8.6 Demonstrate how to create patient statements.

8-2

Learning Outcomes (Continued)

When you finish this chapter, you will be able to:8.7 Explain how statements are edited.8.8 Demonstrate how to print patient statements.

8-3

Key Terms• capitation payments • cycle billing • electronic remittance

advice (ERA)• fee schedule • once-a-month billing • patient statement • payment schedule • remainder statements • standard statements

8-4

8.1 Third-Party Reimbursement Overview

8-5

• A fee schedule is a document that specifies the amount the provider bills for provided services– List of the provider’s standard fees– Not necessarily the amount a provider is paid– Difference between amount in fee schedule and

amount paid is an adjustment• A payment schedule is a document that

specifies the amount the payer agrees to pay the provider for a service, based on a contracted rate of reimbursement

8.2 Remittance Advice (RA) Processing

8-6

• An electronic remittance advice (ERA) is an electronic document that lists patients, dates of service, charges, and the amount paid or denied by the insurance carrier

• ERA – uses the ASC X12 835 Remittance Advice Transaction (or 835)

• RA – Paper format

8.2 Remittance Advice (RA) Processing

(Continued)

8-7

• Steps for processing1. Verify all procedures listed on the claim are

represented on the RA2. Review payment amount against expected

amount3. Identify reasons for denials or payment

reductions; resubmit claim or appeal if necessary4. Post payment information in the PMP5. Bill patient’s secondary health care plan (if

appropriate)

8.3 Entering Insurance Payments8-8

• Payment information is entered in Medisoft through the Enter Deposits/Payments option on the Activities menu

• Deposits are created within the Deposit List dialog box

8.3 Entering Insurance Payments(Continued)

8-9

• The Deposit List dialog box lists deposits for a specific date, or all deposits can be viewed– There are several other sorting features as well

8.3 Entering Insurance Payments(Continued)

8-10

• The Deposit List dialog box includes a column where the Payor Type can be identified

• Capitation payments are made to physicians on a regular basis (such as monthly) for providing services to patients in a managed care insurance plan– Flat fee is paid to the physician no matter how

many times a patient receives treatment

8.3 Entering Insurance Payments(Continued)

8-11

• To enter a deposit, click the New button in the Deposit List dialog box and the Deposit dialog box appears

Deposit dialog box

8.3 Entering Insurance Payments(Continued)

8-12

• The type of payor—patient, insurance, or capitation—is selected from the Payor Type drop-down list

Payor Type

8.3 Entering Insurance Payments(Continued)

8-13

• Other information entered about the deposit includes:– Deposit date– Payment method– Check number– Description/Bank No.– Payment amount– Deposit code– Insurance– Codes for payments, adjustments, withholds,

deductibles, and take backs

8.3 Entering Insurance Payments(Continued)

8-14

• Once a payment is entered, it appears in the Deposit List window

• Exercise 8-1 page 258

8.4 Applying Insurance Paymentsto Charges

8-15

• Once a deposit is entered, the next step is to apply the payment to patient accounts– Highlight the payment in the Deposit List and click

the Apply button, opening the Apply Payment/Adjustments to Charges dialog box

Apply Payments/Adjustments to Charges dialog box

8.4 Applying Insurance Paymentsto Charges (Continued)

8-16

• Next, the patient who has a transaction listed on the RA is selected from the drop-down list in the For box– The upper-right area of the dialog box lists the

amount of the deposit that has not yet been applied

8.4 Applying Insurance Paymentsto Charges (Continued)

8-17

• The middle section of the Apply Payments to Charges window is where payments are entered and applied

8.4 Applying Insurance Paymentsto Charges (Continued)

8-18

• The lower third of the Apply Payment/Adjustments to Charges window contains several options that affect claims and statements

• Exercise 8-2 page 26• Exercise 8-3 page 267• Exercise 8-4 page 268

8.5 Entering Capitation Payments8-19

• Capitation payments are entered in the Deposit List dialog box– Capitation is selected from the Payor Type drop-

down list in the Deposit window

Deposit dialog box for a capitation payment

8.5 Entering Capitation Payments(Continued)

8-20

• Capitation payments are entered but not applied

• The charges in each patient’s account must be adjusted to a zero balance to indicate that the obligation has been met by the insurance company and patient

8.5 Entering Capitation Payments(Continued)

8-21

• A second deposit is entered with a zero amount to adjust the account

Deposit dialog box with a zero payment amount

8.5 Entering Capitation Payments(Continued)

8-22

• When zero amount is saved, the deposit appears in the Deposit List window

• Payment column lists “EOB Only,” since no payment is associated with zero amount deposit

• Exercise 8-5 page 274• Exercise 8-6 page 275• Exercise 8-7

page 275