Insurance Payment Posting
When a Remittance Advice (RA) or
Explanation of Benefits (EOB) is received
from the insurance, each patient payment
must be posted and reconciled with the
patient’s account.
Balances


As you recall from the LEDGER
exercise, any charges increase the
patient’s account balance, and any
payments decrease the patient’s
account balance.
Adjustments or Write-Offs also
decrease the patient’s balance.
Fields from the EOB/RA



BILLED. This is what you billed. It’s
the doctor’s fee for the service.
ALLOWED. This is what the
insurance determined was a
reasonable charge or the contract
rate on the provider’s contract.
PAID. This is the amount the
insurance paid.
Out Of Pocket EOB/RA Fields


Deductible. Amounts applied to the
patient’s deductible are owed by the
patient to the doctor.
Co-Insurance. This is the
percentage of the charges that the
patient owes to the doctor.
Non-ALLOWED Amounts

Be VERY careful about non-allowed
amounts. Sometimes they are to
be written off (adjusted) and
sometimes they are to be billed to
the patient.
Non-ALLOWED Amounts



The difference between the BILLED charge and
the ALLOWED charge is tricky!
Contracted network (participating or preferred)
providers must WRITE OFF or ADJUST their bill to
the ALLOWED charge which is the contract rate.
On Medicare this will be listed as a CO-42 on the
RA.
Non-contracted providers often do not have to do
this write-off and can bill the patient for the
difference. HOWEVER: on Medicare providers
cannot bill the patient more than the Medicare
Limiting Charge if they are non-participating.
Non-ALLOWED Amounts
Medicare Participating Provider Example:
 Billed $140
 Allowed $100
 Paid $80 (80%)
 Co-insurance $20 (20%).
 Write off the $40 difference between the billed
and allowed.
 Collect the $20 co-insurance from the patient.
 Patient should now have a zero balance on this
$140 bill.
Non-ALLOWED Amounts
Medicare Non-Participating Example #1:
If provider “Accepts Assignment” it’s exactly the
same as for the Participating:
 Billed $140
 Allowed $100
 Paid $80 (80%)
 Co-insurance $20 (20%).
 Write off the $40 difference between the billed
and allowed.
 Collect the $20 co-insurance from the patient.
 Patient should now have a zero balance on this
$140 bill.
Non-ALLOWED Amounts
Medicare Non-Participating Example #2:
If provider “Doesn’t Accept Assignment” the
LIMITING CHARGE is all he can bill:
 Doctor’s normal fee is $140
 Medicare Limiting Charge is $115
 Medicare Allowed is $100
 Patient owes the doctor the Limiting Charge of
$115 and NO MORE.
 Provider bills Medicare on behalf of the patient
and the PATIENT receives a check from Medicare,
reimbursing patient for 80% of the allowed.
DENIALS - HMO


DENIALS must be handled carefully.
If the patient is HMO, they only
have co-payments for their HMO
services. The only denials possible
would be non-network nonemergency services that were not
authorized.
Find Limiting Charge

Go to this link!
http://www.palmettogba.com/palm
etto/providers.nsf/DocsCat/Provider
s~Jurisdiction%201%20Part%20B~
Browse%20by%20Topic~Fee%20Sc
hedules~Medicare%20Physician%2
0Fee%20Schedule%20and%20Upda
tes~927LJA5728?open&navmenu=|
|
Finding Limiting Charge
Finding Limiting Charge
DENIALS - PPO

On a private PPO plan, denials
should be appealed if possible
before collecting the money from
the patient. IF the service was
denied because the provider failed
to follow contract rules or obtain an
authorization for service, some
contracts forbid the provider from
billing the patient for denied
services.
DENIALS - Medicare



Denials on Medicare must be handled with CARE!
If the RA has a “PR” (Patient Responsibility) code
by the amount, it is possible to bill the patient for
the denied amount. It may still be necessary to
appeal the denial if the service should have been
covered.
If the RA has a “CO” (Contractual Obligation)
code by the amount, it MUST be written off as an
adjustment to the patient. It may still be
necessary to appeal the denial if the service
should have been covered.
Denial Reasons




Denial reasons fall into several categories:
Eligibility. Patient is not insured.
Coverage. Patient’s insurance doesn’t ever cover
this type of service. Medicare calls this a
Statutory Denial. Examples might be cosmetic
surgery, intersex surgery, self-inflicted injury.
Lack of Medical Necessity or Lack of
Authorization. These often can be appealed by
explaining the situation or seeking authorization.
True emergency services should not be denied for
an authorization and should always be appealed
explaining the situation and the “Prudent
Layperson” rule.
Medicare Medical Necessity

Medicare has special rules about
Medical Necessity. Under Medicare,
the doctor cannot bill for services
that Medicare thinks are
unnecessary. These are denied as a
“CO” by Medicare and must be
written off. These can be appealed.
Medicare Medical Necessity



When a patient requests a service that likely will
be considered not medically necessary by
Medicare, the provider cannot charge the patient
unless the patient signed an “Advanced
Beneficiary Notice” prior to receiving the service.
If the ABN is signed by the patient, the patient
may pay out of pocket for the service and if
Medicare is billed, the charge should have a GA
modifier (ABN was signed by patient).
Medicare will then either pay the charge or deny it
with a “PR” which allows the provider to bill the
patient. Without the ABN and modifier GA,
Medicare would deny with “CO” and the service is
a freebie to the patient!