| Table of Contents |
| 1. Introduction to Payment Posting in Medical Billing 2. Why Payment Posting is Crucial for Revenue Cycle Management 3. Step-by-Step Breakdown of the Payment Posting Process 4. Difference Between Manual and Automated Payment Posting 5. Decoding ERA and EOB Adjustment Codes in Payment Posting. The Key to Accurate Medical Billing 6. Common Errors in Payment Posting and How to Avoid Them 7. Best Practices for Accurate Payment Posting 8. How MedAlign Solutions Simplifies Payment Posting 9. Conclusion 10. FAQs |
1. Introduction to Payment Posting in Medical Billing
The posting process in the Medical Billing Process is one of the most critical steps in healthcare revenue cycle management. It involves recording the payments received from insurance companies and patients into the practice management system.
A well-executed posting process ensures transparency, reduces claim denials, and helps medical billing teams identify payer trends quickly. At MedAlign Solutions, accuracy is at the heart of our RCM strategy.
2. Why Posting is Crucial for Revenue Cycle Management
Accurate posting acts as the financial backbone of the revenue cycle. When healthcare providers accurately record payments, they can track underpayments, denials, and delays easily.
For instance, if a payer consistently reimburses below the contracted rate, payment posting reports reveal that trend immediately, allowing for fast action and appeals.
At MedAlign Solutions, we integrate automation tools that track every remittance and reconcile them against payer contracts for 100% transparency.
3. Step-by-Step Breakdown of the Payment Posting Process
Here’s how payment posting in medical billing works step-by-step:
Step 1: Receive ERA (Electronic Remittance Advice) or EOB (Explanation of Benefits)
Payers send an ERA or EOB indicating claim payments, adjustments, and patient responsibilities.
Step 2: Match Payments with Claims
Medical billers match ERAs/EOBs with corresponding claims in the billing software to ensure accurate mapping.
Step 3: Post Payments in the System
Payment details such as insurance amount paid, patient responsibility, and write-offs are entered.
Step 4: Verify and Reconcile
Reconciliation ensures the total payment amount matches bank deposits and payer statements.
Step 5: Report Generation
Finally, payment posting reports provide insights into payer performance, denial trends, and pending balances.
4. Difference Between Manual and Automated Payment Posting
| Aspect | Manual Payment Posting | Automated Payment Posting |
|---|---|---|
| Speed | Slow and prone to human error | Fast, accurate, and consistent |
| Resources | Requires large staff | Uses RPA and software bots |
| Accuracy | 85–90% average | 99.9% accuracy with automation |
| Reporting | Manual compilation | Real-time dashboards |
Automation in payment posting minimizes delays, enhances efficiency, and eliminates manual entry errors, something MedAlign Solutions excels at through its advanced RCM software.
5. Decoding ERA and EOB Adjustment Codes in Payment Posting. The Key to Accurate Medical Billing
When performing payment posting in the medical billing process, understanding ERA (Electronic Remittance Advice) and EOB (Explanation of Benefits) adjustment codes is essential for achieving accuracy, transparency, and compliance in the healthcare revenue cycle.
These codes, such as PR (Patient Responsibility) and CO (Contractual Obligation), define how payments and adjustments are applied to each medical claim. Correct interpretation of these codes ensures that both insurance payments and patient balances are posted precisely, preventing under- or over-billing.
PR (Patient Responsibility) Codes
PR (Patient Responsibility) codes identify the portion of the payment that must be billed directly to the patient. These adjustments explain why an insurer did not pay certain amounts and transfer responsibility to the patient.
| Code | Description | Use in Payment Posting |
|---|---|---|
| PR-1 | Deductible Amount | Applied to the patient’s deductible by the primary insurance. If secondary insurance exists, it may be sent for reimbursement; otherwise, billed to the patient. |
| PR-2 | Coinsurance Amount | Applied to the patient’s Coinsurace by the primary insurance. If secondary insurance exists, it may be sent for reimbursement; otherwise, billed to the patient. |
| PR-3 | Co-payment Amount | Patient’s copay amount due at the time of service. |
Purpose: These PR adjustments are posted to the patient balance. The medical billing team must ensure these amounts are billed to the patient promptly to maintain accurate accounts receivable.
CO (Contractual Obligation) Codes
CO (Contractual Obligation) codes indicate adjustments that are not billable to the patient because they arise from agreements between the payer and provider. These ensure compliance with payer contracts.
| Code | Description | Use in Payment Posting |
|---|---|---|
| CO-45 | Contractual Adjustment | The difference between the billed amount and the payer’s allowed amount. Not billable to the patient. |
Purpose: Used to adjust off the contractual difference, CO-45 ensures correct net receivables and prevents billing the patient for disallowed amounts.
Government Adjustment, Sequestration Fee (CO-253)
| Code | Description | Use in Payment Posting |
|---|---|---|
| CO-253 | Sequestration | A mandatory federal payment reduction (approximately 2%) applied to Medicare payments. |
Purpose: Must be recorded accurately to reconcile Medicare reimbursements and ensure that sequestration reductions are reflected correctly in financial reporting.
Other Common Adjustment Codes in Payment Posting
Several other ERA/EOB adjustment codes commonly appear during the payment posting process and are critical for maintaining billing precision:
| Code | Description | Notes |
|---|---|---|
| CO-97 | Payment included in another service/procedure | Used when a service is bundled. |
| CO-16 | Claim/service lacks information | Denial code indicating missing or invalid data. |
| OA-23 | Payment adjusted due to prior payer’s payment | Appears in secondary payment postings. |
| PI-204 | Service not covered under patient’s current plan | Billable to patient after eligibility verification. |
Summary of Essential Codes for Payment Posting
| Category | Common Codes | Purpose |
|---|---|---|
| Patient Responsibility | PR-1, PR-2, PR-3 | PR-1 and PR-2 are applied by the primary insurance and may be paid by secondary insurance if available; PR-3 is directly billed to the patient. |
| Contractual Adjustment | CO-45 | Write-off (not billable) |
| Government Adjustment | CO-253 | Sequestration deduction |
| Bundling/Info Errors | CO-97, CO-16 | Internal follow-up |
| Other Insurance Adjustments | OA-23 | Coordination of benefits |
These payment posting codes form the foundation of accurate medical billing reconciliation, ensuring every claim, adjustment, and payment is recorded properly within the revenue cycle management system.
6. Common Errors in Payment Posting and How to Avoid Them
- Incorrect ERA Mapping → Use validation scripts to ensure claim IDs match.
- Unposted Secondary Payments → Always reconcile secondary payer payments.
- Duplicate Entries → Automate duplicate detection in your billing software.
- Unapplied Cash → Regularly audit unapplied funds reports.
At MedAlign Solutions, our QA team ensures error-free processes through advanced audit trails and AI-based matching systems.
7. Best Practices for Accurate Payment Posting
- Regular reconciliation of bank deposits with EOBs
- Automating ERA imports and matching
- Training staff on payer-specific posting rules
- Weekly audits of underpaid or denied claims
Implementing these payment posting best practices leads to faster cash flow and fewer revenue leaks.
8. How MedAlign Solutions Simplifies Payment Posting
At MedAlign Solutions, we provide end-to-end payment posting services, from ERA imports to denial resolution. Our process includes:
- Automated ERA/EOB posting
- Payer-wise accuracy tracking
- Real-time claim reconciliation dashboards
- Custom reporting tools for providers
This ensures faster revenue cycles and transparent financial insights for all healthcare clients.
9. Conclusion
The process in the Medical Billing Process is more than just data entry; it’s a vital part of financial control. With automation, real-time reconciliation, and consistent auditing, providers can achieve 99.9% accuracy and maximize reimbursements.
Partnering with MedAlign Solutions means leveraging expertise, technology, and transparency, empowering your healthcare business to grow profitably and confidently.
Let MedAlign Solutions Be Your Guide.
Contact us today for a free revenue cycle assessment. Our experts will help you analyze your denial trends, implement best practices, and unlock your full revenue potential. Stop leaving money on the table protecting one. This strategic approach is what truly separates high-performing practices from those struggling with revenue recovery.
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Email us: Info@medalignsolutions.com
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10. Frequently Asked Questions (FAQs)
What is Payment Posting in Medical Billing?
Payment posting is the process of recording and reconciling payments from insurance companies and patients against submitted claims.
Why is Payment Posting important for revenue cycle management?
Because accurate posting ensures correct financial tracking, helps identify underpayments, and prevents claim denials.
What tools are used for Payment Posting Automation?
Tools like RPA bots, API integrations, and EHR billing modules automate ERA/EOB posting efficiently.
How does MedAlign Solutions improve payment posting accuracy?
MedAlign Solutions uses AI-driven verification and automated reconciliation to ensure every payment is correctly recorded and reported.
