NHIA Reimbursement Training Center

Cash Posting

EOB sample and explanation

 

Cash posting for Home Infusion Pharmacies

This document outlines the steps each home infusion pharmacy should go through as it relates to tracking cash receipts and posting cash.  Payments and denials for infusion pharmacies are more unique than other medical billing due to the volume of claims that require billing for denial and also that there is not one consistent coding standard for billing for home infusion, so often you are playing a guessing game in trying to determine the correct methodology to use.  In the interim, you may be paid more than you allowed. 

 

Types of Cash received

There are several ways that payments can be made to a home infusion pharmacy.  Below is a summary of the types of deposits often used:

  • Electronic Fund Transfer (EFT):   The most secure way to receive a payment is from the payer directly to your bank.  This removes any middleman.  The funds hit your bank account immediately.  This is the preferred methodology for many large payers.  This process saves both the provider and the payer time and money.  The only downfall to this process is that you will need to put a process in place to alert your cash poster(s) when payments are made to your account as they will need to retrieve the EOB (explanation of benefit) or to post the payments manually or ERA (electronic remittance) to post he payment electronically to the patient’s account. 
  • Electronic Remittance Advice (ERA):  An ERA provides claims payment explanations in a HIPAA-compliant format.  The industry standard electronic ERA is HIPAA X12 835 (commonly referred to as an 835) which is essential when auto-posting any payments to your database system.
  • Explanation of Benefits (EOB):  An EOB is the paper version of the ERA.  It typically describes the patients that were processed as part of the payment or zero remit.  It also includes data such as:  ID#, HCPCS codes billed, amount billed, amount paid or denied.  Often an EOB also includes a code or detailed description of why the payment is less than the original amount you billed.
  • Zero Remit:  A zero remit is typically when the total value of the claims paid is less than or equal to the total value of claims being recouped.  Thus, there is no need for an actual check to be issued.
  • Bank Lockbox:  If setting up an EFT is not possible, the next best option is setting up a lockbox with your bank.  A lockbox is a service provided by a bank whereby the bank receives, processes, and deposits all of a company’s receivables.  The payer or patient will send the payment to a P.O. Box with the Provider’s name.  The Bank opens and sorts all the mail.  The bank scans each piece of correspondence to the Provider’s account.  The provider can download all of the correspondence at their convenience.
  • Local Deposit:  This process is the least desirable as you have the greatest possibility that funds are lost, or worse yet, stolen.  Checks are mailed to the provider’s address.  An employee of the Provider will open the mail, endorse the checks, copy the back-up/correspondence, then go to the bank to make the deposit.  Additionally, any payments made by cash will have to be deposited at a local bank as well.  While it is rare that cash is received, it certainly does occur from time to time.
  • Virtual Credit card – payer:  It is becoming more commonplace that payers are paying for the claims using virtual credit cards.  When paying via virtual credit card, payers send single-use credit card payment information and instructions to the provider via mail, fax, or e-mail.  The provide then processes the payment as they would any credit card payment.  The downfall is that the average fee for this transaction is 3-5% of the total paid!!!   With margins squeezed and rates at an all-time low, most cannot afford to get hit with a 3-5% reduction.  Most payers will allow a provider to “opt out” of a virtual credit card payment.  Since each payer process is different, you will need to research the process that makes the most sense for you.
  • Credit card – Patient:  Patients will pay their bill by cash, check, or credit card.  It is key to accept as many credit card payments as possible.  While there is a fee associated with the credit card payment, securing the patients financial responsibility before dispensing the goods is a great practice to get into. 
  • Full Payment, Partial Payment, or Denial

Each claim will either be paid in full, partially paid (meaning that there was a deductible or copay that applied; or one or more line items was not processed/paid); or the claim was denied for a variety of reasons.  Regardless of which system you use to management your business, each of these transactions must be posted to the patient’s account.  The more detailed you are in your posting process; the more value you will get in reporting or even in AR resolution.  This includes associating a code/description to each transaction.  Below is a summary of the types of transactions that will be posted to the patients’ accounts.

  • Payment in full: If you have done everything correctly (from billing codes, modifiers, authorizations, documentations, etc.), you will hopefully receive payment in full.  However, even payment in full payments should be coded as such.   
  • Partial payment: A partial payment can be a variety of different scenarios such as those listed below.  When posting cash to a claim that is not paid using a code in your posting process can help to streamline the process for resolving the balance that remains on the claim.  Additionally, if the primary payer has paid in full, the cash poster can transfer the balance to the next payer.  Often I see that the cash poster merely puts the payment on the correct claim.  However, if you are not auto-posting your payments, why not have the cash poster resolve as much as they can since they already have to review the claim and the payment to determine how much and where to post the patient.  Getting the balance in a secondary bucket to print or self-pay queue to bill, saves a lot of time overall. 
  • Denied claim: It is imperative that you log all denials if you want to maintain a clean AR.  Unless you are billing Medicare, or any payer, to purposely receive a denial, no one wants to receive a denial yet everyone will receive denied claims even if you submitted a clean claim.  A denial does not necessarily equate to a mistake made by either the provider or the payer.  A patient’s policy could have terminated and they may not have given you the new information.  There could be something wrong with the referring physician’s information.  There are many reasons why claims are denied.  Most importantly you need to track why they denied and what you can do to prevent them in the future.  Recommendations for denials:
    • Log them:  All denials should be logged into your system.  By doing this you can track receipt of the denial (proof of timely filing).
    • Code them:  It is VERY important to log your denials with a code that signifies the reason the payer denied the claim.  This will allow you to run reports to determine the route cause. 
    • Resolve them:  If you are logging your denials in your system, you can ensure they are assigned to someone to resolve each denial within the file limit for each payer.
    • Prevent them:  If you are logging/tracking denials as they occur, there is likely actions you can take to prevent many of the denial from reoccurring.  Example:  if you receive a denial for invalid PECOS number for a physician, you can be sure to update that MD and avoid the denial from occurring again in the future. 
    •  
Miscellaneous
  • Balance deposits to postings: Regardless of how you receive your payments, there will be a variety of different types of deposits made on different days.  You should ensure that you tie out what is posted in your system to what was deposited in your balance.  This is an important check and balance step that is often overlooked.
  • Distribute EOBs if not paid in full:  Whether electronically (preferred method) or on paper, you should have some way to distribute the EOBs that are not paid in full for the staff to resolve.  The EOBs often have enough detail to determine the next step or action that should be taken in ensuring the claim is paid in full
  • Celebrate success:  Accuracy in the cash posting process, as with any process, is critical; however, it is often “expected” that cash is posted with 100% accuracy versus appreciated.  Even if the majority of your cash is posted electronically, there is human intervention in that process.  Don’t forget to acknowledge your cash posting team and celebrate their successes when they are error-free.  A little bit of recognition can go a long way to motivate your staff.
  • Electronic Remittance Advice (ERA) Enrollment:  In order to receive an ERA, you must enroll with the payer.  The enrollment process establishes an electronic mailbox where the ERA will be received.  The application includes information such as:  Receiver information, provider information (the two can be different), provider’s tax ID, and a signature of an individual who is authorized to sign documents for your facility.  (In other words, it cannot be signed by a biller to expedite payments.)  Once the enrollment is complete, you will receive an electronic receiver ID and password.