Medical billing processes are more complex than ever before. Despite these complexities, it’s vital that healthcare providers ensure accurate and timely payments from insurance companies. Remittance advice in medical billing represents a critical tool in this process.
Our guide explores remittance advice in medical billing, as well as common challenges associated with remittance advice. You’ll also learn practical strategies and best practices for protecting your revenue cycle.
Remittance advice (RA) is a document that healthcare providers receive from insurers detailing the status of submitted claims.
Since the majority of correspondence now occurs electronically, RA is commonly called electronic remittance advice (ERA). These documents help providers track payments and identify what adjustments the payer made.
Remittance advice in medical billing also plays a crucial role in understanding and disputing denials. Healthcare organizations can use electronic remittance advice data to identify which claims should be resubmitted and which have a low chance of being approved.
Remittance advice in medical billing typically includes the following details that help you track and manage claim payments:
Take a look at a few electronic remittance advice examples to break down some additional information that is included in ERAs, which can include:
These electronic remittance advice examples are among the most common. It’s important to look for these codes and identify trends where they appear frequently.
Remittance advice in medical billing has a direct impact on your revenue cycle. You can use ERA data in several ways.
Review remittance advice in medical billing to determine when a payer underpays or denies a claim. CARCs and RARCs explain why an amount was reduced or denied.
It’s important to respond to denials promptly so your organization can recapture lost revenue and protect cash flow. You can also identify instances where you were underpaid.
Analyzing remittance advice in medical billing can help you pinpoint denial trends. For instance, if a specific payer frequently denies claims related to a certain billing code, it's important to find out why. In many cases, procedural errors can be to blame. In these instances, you can adjust your policies to reduce denials and avoid payment delays.
However, if a payer has a history of denying procedures and treatments that are addressed in your current contract, it’s important to discuss these concerns during negotiations. Presenting analytics data can support your position during negotiations and open the door for more favorable terms going forward.
RA provides a breakdown of insurance payments. Pay close attention to fields like:
These fields allow you to confirm you are being paid appropriately.
Ensuring correct payments and appealing inappropriate denials helps you avoid unexpected billing errors. In turn, you can reduce the burden on patients and promote compliance with the No Surprises Act. Minimizing patients’ out-of-pocket costs can also boost your practice’s reputation.
Managing remittance advice presents some challenges.
Your organization undoubtedly deals with multiple payers. Each likely issues RAs in different formats. These discrepancies can make it tough to track payments across multiple platforms, especially if you are relying on manual processes.
Implementing automated workflows will promote efficiency and eliminate this barrier to timely payments.
Insurance companies use standardized codes. However, sifting through these codes and adjustment protocols requires time and expertise. These complexities can make responding to denials tedious and costly.
Fortunately, there are modern revenue cycle management solutions that empower your team to understand and address denials at scale.
Different payers have varying rules regarding claim adjudication and adjustments. They also have slightly different appeal processes. It’s vital to stay apprised of each payer’s specific rules so that your organization can appeal denials within set time constraints. Otherwise, lost revenue will be a recurring problem.
To optimize the processing of remittance advice in medical billing, your organization can adopt the following best practices.
Use denial management software to automatically sort through ERA data. These digital tools allow you to reconcile payments and flag underpayments. Use these insights to negotiate better terms with payers and identify patterns of underperformance.
Data analytics tools allow you to track trends in denials and identify issues that can be resolved through better documentation. You should also find and fix any leakage issues, such as inefficient billing practices that are leading to increased denial rates.
Denial management software optimizes your denial appeals processes and facilitates proactive follow-up. This solution helps your team identify and prioritize valuable and high-percentage denials so they can avoid wasting time on claims that are unlikely to yield notable revenue.
Rivet Health’s Claim Resolution streamlines the management of remittance advice and denials. With Rivet, your organization can:ve your denial rates unless you are watching the right data. Use KPIs to track the ROI of your denial prevention efforts, such as the following:
Rivet Health provides all of the tools and resources necessary to modernize your revenue cycle. Schedule a demo with Rivet Health today.
