Published in MEDITECH bulletin June 2010 issue
One vital element of receivables management and cash flow is the processing of insurance payments. Timely posting of accurate payment and adjustment information can accelerate cash flow by advancing the patient account to the next stage of billing or collections. Although HIPAA implemented a standard format for electronic remittance of data, the ANSI 835, a majority of the remittance documentation received by hospitals today is still on paper.
The healthcare industry spends 15% of each dollar on payment processing compared to only 2% in retail industries1. Of the remittances processed by healthcare facilities, 80% – 90% are still provided on paper.
Paper insurance remittances are generally translated manually into payment and adjustment transactions for each documented account. This process is very time consuming and prone to error. In addition, vital details about these payments are often excluded in the interest of time. For example, charge level denials and other detailed adjustments that are often available in the electronic remittances or on the paper equivalent are often summarized or excluded. Continue reading