This article originally available on podcasts, click here to listen to podcast. How do you know if you received the money that gets posted in collections? In other words, did it get into the bank account?
Several problems exist. Different issues cause mismatches between what gets posted in quote collections and what gets put into the bank account. Sometimes, there is an EOB that gets received without a check attached. And that payment can get posted, perhaps, incorrectly, depending upon how well the process gets set up.
It is rare and possible that an ERA and no ACH or ACH do not match ERA. That is less common. I think missing checks are much more common.
Sometimes, insurance companies make a quote mistake. We have talked about this type of error in other podcasts.
Those mistakes, as you may recall, typically benefit the payer pretty much all the time. In rare cases, when a payer makes a mistake and helps the provider. The insurance company figures that out quickly and takes the money back. They never do the opposite. They never find the error where they underpaid you, or there is somehow some mistake in their benefit, and they came back and corrected that mistake.
What happens in the case of quote offset?
There is often an offset where the EOB might say, for example, that $100 got paid. Maybe, an intermediary keeps that money as a fee, or there is some other problem where that money did not make it through a TPA or whatever the intermediary might be. The billing system shows a $100 payment posted, but perhaps $50 made it into the bank account or nothing at all. Maybe, 0 of that $100 made it into the bank account.
- Most billing systems do not set up to handle these types of complex issues. Essentially, that money disappears into the void.
- There are other issues as well that can come up. For example, we got a client at one point that we took over where they had in-house billing. And the quote biller stuffed checks into a drawer for an extended time because they were too busy to make it to the bank until many of those checks had expired. They did not clear it.
- There are other types of issues. There are chances of mismatch between the system collections and what got deposit into the bank account. Can even be instances of fraud. So many different ways that this can happen that is another podcast in terms of what kind of scam. Might exist and what you could do to detect that type of fraud.
We will not detail that here, but know that that is another collections. The primary way there could be a significant mismatch. That fraud could be in-house or could be a billing company. It could be all kinds of different things.
Why a mismatch?
Very often, the mismatch between what got posted. And what gets deposited into the bank account is entirely the other way, meaning you receive payment. You do not have a collections corresponding EOB or enough detailed information to post all of those clear payments to the individual patient accounts. Therefore, you have more money that got deposited into the bank account than what got published.
I am going to make up an example. You collected a million dollars in a month, but actually, $1,050,000 came in in payments. $50,000 of that was not able to be posted. You have a surplus of $50,000 in that month. Because there is that problem, it can sometimes hide the opposite situation. We gave you some of these other examples before, where you did not receive the money because most people do straightforward reconciliation.
What to do in case of a mismatch?
We post a million bucks in the bank account. Let us say you posted a million, and a million went into the bank account, but $50,000 was in payments that you could not post. Then, there was $50,000 that was missing, meaning you got EOBs or you got some information or something like that. It may seem like you are close to matching out. You will get close enough, but you are short of 50 grands because you will be able to post that $50,000 that came in, where you could not publish it in this period. Then, you will have posted $1,050,000 and only deposited a million. There is a huge need to do reconciliation.
Accountants frequently want to do reconciliation and compare. There are often real problems in doing this because you get into period overflow issues.
Collections reconciliation in the industry. Here you compare what made it into the bank account to what got post. In the system to identify losses to find those and recoup them. Next podcast or in one of the short future of podcasts, we will discuss what to do about all this.