Medical practice remittances: reconciling claims, adjustments, and cash

Match payer remittance records to claims and deposits. CMS describes electronic remittance advice as a way to communicate payment and adjustment information. Finance needs that detail to understand what the payer actually settled.

Keep the relevant payer, service period, provider, and transaction reference. Protect patient information and share only what the accounting task requires through the approved process.

The amount billed can differ from the contracted or approved amount. Identify payer adjustments, denials, patient responsibility, refunds, and remaining receivables using the practice's reviewed billing records.

Do not assume every difference is collectible from the patient or should become a bad debt. Have the billing and accounting owners assess the category and evidence.

A bank deposit may combine several remittances, and a remittance may involve timing differences. Use payer references and settlement records to build an explained match.

For illustration, $10,000 of billed charges may result in $7,000 of approved amounts and $6,000 of payer cash, with the remaining $1,000 requiring a documented patient or other balance. Those figures are hypothetical; the actual remittance establishes the adjustment and responsibility.

Assign an owner to missing documentation, coding questions, resubmissions, and payer follow-up. Keep collection status separate from the accountant's assessment of reported receivables.

Avoid patient-level detail in general management reporting when a summarized view answers the business question. Preserve the sensitive source in the appropriately restricted system.

Reconcile approved collections, adjustments, refunds, and closing balances to the ledger under the practice's accounting policy. Record material differences and their owners.

At close, retain the reconciliation and approved reporting totals without duplicating unnecessary patient data. The practice should be able to explain its collections and outstanding balances using remittance evidence, with clinical and billing judgments handled by the responsible specialists.