Payment Posting: How to Improve this Process to Identify Underpayments

Of the 11 steps in the revenue cycle, payment posting impacts underpayment recovery the most. It’s during the payment posting process that provider staff first notice payer reimbursement deficits. Healthcare organizations with payment posting processes that prioritize accuracy enjoy the best underpayment recovery. 

Review the importance of payment posting and the processes to optimize it so that you can enhance revenue cycle efficiency, improve overall financial health, and notify payers that they need to adhere to contracted rates. 

What is payment posting?

Payment posting is a critical step in the healthcare revenue cycle that involves accurately recording and reconciling payments received from payers against submitted claims. Conducted by specialized billing staff or revenue cycle specialists within the organization's finance department, these staff members:

• record payments received from insurance companies, government payers, and patients
• match payments to the corresponding claims and patient accounts
• reconcile the amounts received against the reimbursement listed in the contracts
• identify and address any discrepancies, particularly underpayments, as these shortfalls can amount to one to three percent of provider revenue.

When a payment does not match the contracted rate, the responsible staff member:

• reviews the explanation of benefits (EOB) or electronic remittance advice (ERA) to understand the reason for the discrepancy
• verifies the accuracy of the original claim and contracted rate
• initiates underpayment appeals with the payers
• documents the discrepancies and follow-up actions in the billing system
• escalates recurring issues to management for potential contract renegotiation 

While some organizations still rely on manual posting, larger physician groups and management services organizations have turned to automation tools to enhance the accuracy and efficiency of this process.

Why is payment posting important for underpayment identification and recovery?

Revenue cycle management (RCM) publications have highlighted the critical importance of accurate payment posting in identifying and addressing underpayments. 

When payments are posted correctly, it allows for:

• precise reconciliation between charges, payments, and contractual adjustments
• identification of discrepancies between expected and actual reimbursement
• timely follow-up on underpaid claims

Without precise posting, underpayments can go unnoticed, leading to revenue leakage over time.

Accurate payment posting’s impact on financial health

By ensuring that payments are recorded correctly and discrepancies are swiftly identified, healthcare organizations can enhance their revenue recovery efforts. This section explores the impacts of precise payment posting on healthcare organization finances.

Clear view of daily revenue stream

Accurate payment posting provides healthcare organizations with a real-time, comprehensive view of their daily revenue stream. This visibility allows financial leaders to make informed decisions based on current data rather than outdated information. Organizations currently growing by acquiring new practices have to use the most recent data to win needed investment and choose the best targets.   

Identification of billing and coding issues

Quick identification of billing or coding issues allows for prompt correction, preventing revenue loss. Rectification of these errors supports increasing revenue going forward. 

Prevention of incorrect patient statements

Accurate payment posting prevents incorrect statements from going out. Accuracy ensures patient satisfaction and reduces administrative costs associated with correcting errors. 

Facilitation of secondary payer claims processing

With accurate primary payer information posted, secondary claims can be processed more efficiently, allowing organizations to realize full payments faster.  

Streamlined denial resolution

Accurate payment posting allows for quicker identification of denied claims and the reasons for denial. This enables faster resolution and resubmission of corrected claims. 

Improve staff payment posting accuracy with these steps

1. Leverage Automation

The exponential growth in healthcare data has overwhelmed even the most proficient manual data entry teams. Healthcare leaders press that automated data entry systems are now crucial for healthcare organizations to effectively validate and manage critical information. 

Some healthcare organizations are still resisting the adoption of automated payment posting. Believing direct human oversight of the posting process is more accurate, they ignore that the precision of machine processing virtually eliminates typographical and calculation errors that occur with manual entry. Moreover, automated systems can process payments at speeds far exceeding even the most efficient revenue cycle staff member, improving overall revenue cycle efficiency. Advanced technologies like AI and machine learning identify underpayments trends so that root causes can be revealed and rectified. 

Another advantage of automated payment posting is its capability to input data from insurers' explanations of benefits (EOBs), an efficiency that reduces the administrative burden. By implementing automated posting, healthcare organizations can redirect valuable staff time toward enhancing patient care and other mission-critical activities. Finally, automated systems – that never tire and can work overnight – offer scalability to handle increasing data volumes.

 A well-designed automated posting system provides clear, organized financial reporting, enhancing visibility into revenue streams and facilitating more informed financial management decisions. Evaluate G2’s top automated payment posting options. 

Choose software solutions with proven track records of integrating well with your EHR and billing systems. For efficient electronic payment processing, use electronic remittance advice (ERA) and electronic funds transfer (EFT). 

Ask about these features in the payment posting automation systems as well: 

• optical character recognition so you can scan and capture payment information from diverse sources like lockboxes, mail, or online portals.
• AI and machine learning features that analyze data and provide insights and recommendations for process improvement. 
• capabilities to prioritize and batch payments, automate workflows and integrate systems.

2. Establish robust quality control

Software that can validate payment data against claims data and flag discrepancies catches the posting errors, finding root causes that can be rectified. Deploy tools that can detect underpayments, overpayments, denials, or adjustments. These tools should also compile these discrepancies in clear reporting and/or send alerts. Leverage analytics to generate reports and dashboards that provide insights into the performance of your payment posting and reconciliation processes.

Take a quick, self-guided tour through a powerful contract management and underpayments identification tool:

3. Invest in Staff Training and Education

Prioritize ongoing training and education for staff on best practices and procedures in payment posting. Share that accurate payment posting helps the organization bring in the revenue to pay better salaries, offer more services, buy more equipment, and compete in the area. Conduct regular training sessions or webinars, and provide up-to-date manuals. Keep staff informed about the latest rules and regulations. Develop and enforce clear policies and standards for handling various payment posting scenarios.

4. Continuously refine processes

Keep a close eye on payment posting processes. Your software solution should automatically aggregate these key performance indicators (KPIs):  

• accuracy rate
• turnaround time
• error rate 

KPIs help justify your investment in the software. 

5. Foster collaboration and communication

Enhance collaboration and communication among internal teams and external stakeholders. Implement secure data exchange platforms, document-sharing systems, and efficient messaging tools. Utilize software that helps manage and monitor communication with payers, patients, and vendors to ensure alignment and quick resolution of issues. Review the best approaches to navigating payer relationships. Keep in mind that payer reps have their own staffing shortages and other struggles. Fostering a positive relationship with them can make a difference. 

6. Engage professional expertise

Revenue cycle management experts and consultants with experience in payment posting efficiencies can help you audit and validate your payment data, processes, and systems. Complex payment posting tasks could require the use of industry best practices, benchmarks, and specialized knowledge. Improving payment posting accuracy may involve a part-time, short-term consultant, well worth the cost for a new process and the technology to limit your underpayments. You can find these professionals on MGMA or HFMA. 

Motivate staff to prioritize payment accuracy

Consider these tactics to get staff on board with improved payment posting: 

• Performance-based bonuses: Offer financial bonuses tied specifically to metrics around payment accuracy and identifying underpayments. This incentive directly rewards the desired behavior.
• Points-based recognition program: Implement a system where staff earn points for accurately processing payments and identifying discrepancies. Points can be redeemed for rewards.
• Public recognition: Highlight top performers in payment accuracy through employee of the month awards or other public acknowledgments. This provides social incentives.
•  Professional development opportunities: Offer additional training or conference attendance to staff who consistently demonstrate high payment accuracy.
• Extra paid time off: Provide additional vacation days or flexible hours to employees who meet or exceed payment accuracy targets.
• Team-based incentives: Set team goals for payment accuracy and offer group rewards when achieved, fostering collaboration.
• Career advancement opportunities: Create a clear path for promotion or expanded responsibilities tied to consistently high performance in payment accuracy.
• Spot bonuses: Give immediate small rewards (gift cards, etc.) for catching significant payment errors or underpayments.
• Gamification: Implement friendly competition or achievement systems around payment accuracy metrics.
• Profit sharing: Tie a portion of profit sharing or bonuses to overall improvements in payment accuracy and reduced underpayments.

Overall, revenue cycle leaders best motivate staff when they:

• clearly communicate the goals and metrics
• make rewards meaningful and achievable  
• provide regular feedback  
• shape incentives to what has proven to motivate your team
• use individual and team-based incentives
• continuously refine your programs based on results

Identify every underpayment with robust contract management software

When prioritized, payment posting accuracy helps rectify the payment and billing errors that erode revenue. Payment posting automation can support staff, and improve speed and accuracy of cash flow while optimizing your revenue cycle. 

Contract management and underpayment identification tool RevFind explores the posted payments to find any that do not match contractual terms, automatically flagging any discrepancies and alerting staff to potential issues. It also conducts performance analysis in healthcare revenue cycle operations, providing critical insights for more effective contract negotiations.

RevFind’s advanced analytics tools also allow managed care contracting teams to model the financial impact of proposed payer rate adjustments. Additionally, provider teams themselves can create their own unlimited scenarios, simulating how various rate and term combinations impact revenue.

By leveraging these powerful modeling capabilities, healthcare organizations can strengthen their negotiating positions and make data-driven decisions to avoid unfavorable contract terms. 

To experience how RevFind can enhance your revenue, schedule a demo that addresses your organization’s unique operational and payer challenges.

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