Chapter 28 — Key Takeaways

The document

Remittance advice generally · ERA electronic · SPR paper · 835 the transaction. Same information; only one can be posted by a machine.

   CHECK / EFT LEVEL
     └─ CLAIM  (patient control number ◄── Ch. 26 §26.2)
          └─ SERVICE LINE
               adjustments: GROUP CODE + CARC + AMOUNT
               remark codes (RARCs)
     └─ PROVIDER-LEVEL ADJUSTMENTS — things done to YOU

Claim payments + provider-level adjustments = the payment amount. CHARGE = PAID + the sum of the adjustments. Every line. Always.

When your posting does not balance, you have missed an adjustment — and the missing one is frequently the interesting one.

The EOB says something else on purpose

Remittance → the PROVIDER. EOB → the PATIENT.

It explains a benefit, not a payment · shows the charge prominently · "you may owe" is an estimate · and arrives on its own schedule.

Fields you do not have: the deductible and out-of-pocket ACCUMULATORS — frequently the reason a patient's bill is larger than expected.

Group codes

The GROUP CODE decides WHO OWES. The CARC decides WHY.

Both usually come from a rule mapping a CARC to a destination without checking the group code. The check: any CARC appearing under more than one group code.

Ch. 22 §22.7's ABN is the instrument that decides whether a necessity denial arrives as CO or PR — GA/GX/GY/GZ are how you said so in advance.

CARCs and RARCs

A report configured to suppress RARCs turns every CO-16 into a phone call. Check the setting.

Read together — CO · 97 · N19 · \$128.40 on a 99214-25:

"The office visit was part of the injection."

A claim about clinical reality, and wrong — Ch. 15 §15.5 documented three chronic conditions separately assessed and Ch. 14 §14.4's modifier 25 asserts it. "Line 1 denied" leads to a write-off. That sentence leads to an appeal that wins.

Four adjustments, four different next actions — and only ONE is an appeal.

Posting

   CHARGE − CO − OA/PI − PR = PAYMENT
   CHARGE − ALLOWED = the contractual adjustment
   ALLOWED − PATIENT RESPONSIBILITY = the payment

Post at the LINE. Post what the remittance says, not what you expected. Post the ZERO lines — they carry the group code, CARC, and RARC that explain why.

The copay already collected: the payer reports PR and does not know you have the money. The posting must apply the existing payment against it. This is the single most common source of "you billed me for something I already paid," and it is a posting SEQUENCE problem.

Adjustment versus write-off

   CONTRACTUAL · ADMINISTRATIVE (PREVENTABLE) · SMALL BALANCE
   · CHARITY/FINANCIAL ASSISTANCE · BAD DEBT

The middle one pays for itself — preventable administrative write-offs are your own failures, priced. Ch. 29 §29.7 builds the report; the data has to be created here. Charity must never be mixed with bad debt.

A CO-97 posted as a contractual adjustment makes an account that looks PAID IN FULL.

Nothing ages. No denial is logged. No queue receives it. Nobody appeals a write-off.

Autoposting

Good at: volume · speed · consistency (the precondition for detection). Requires ERA enrollment — Ch. 27 §27.5 — separate, per payer. A practice with paper remittances usually has an enrollment gap, not a technology gap.

Four failures: posts denials as adjustments · applies group codes from rules · cannot see an underpayment · handles the exceptions worst.

Ask: "who works the exception queue, and what is the oldest item in it?" The second answer is diagnostic. In a healthy practice it is measured in days.

Underpayments — the promise six chapters made

An underpayment does not deny, does not reject, appears on no exception report, arrives as a

payment — and it RAISES your net collection rate.

Because the denominator shrinks with the numerator. Ch. 23 §23.10.

   1. EXPECTED ALLOWED — from the contract, per line
   2. ACTUAL ALLOWED   — from the remittance
   3. VARIANCE
   4. THRESHOLD        — dollar or percentage floor
   5. CLASSIFY         — CONTRACT wrong · CLAIM wrong · PAYER wrong

Step 1 is the whole difficulty. (Ch. 23 §23.6: 133.03% / 124.21% / 115.44% / 100.00%, blended 128.55%, and not one line is at 128.55%. A blended check finds every line wrong and no line wrong.)

Contract wrong is most common on a first pass. Claim wrong looks identical to a payer error. Payer wrong is systematic — it is a configuration, applying since it was made.

\$6.40 × 40/month = \$3,072/year; over 26 months, \$6,656. Same finding, two presentations. Start with your top twenty codes at your top three payers.

Offsets, reversals, and the balance that moves

A takeback is the recovery; an offset is the mechanism. They live in the provider-level adjustment section, alongside interest, capitation, penalties, and advance-payment recovery.

Post every claim at its FULL remitted amount and post the offset separately. Never net the claims down to match the deposit — that creates false balances, leaves the overpaid claim uncorrected, and generates fake underpayment variances on every line.

Read the offset's reference. It names a claim, and that claim is a finding. Ch. 31 §31.9.

A reversal and a correction are one event. Post both halves.

COB: the primary's PR is not yet the patient's. The secondary considers it first; what survives is the patient's. Do not assume crossover — the remittance usually says whether the claim was forwarded. A PR-2 billed to a QMB is prohibited (Ch. 3), not merely awkward.

Key terms

remittance advice · ERA · SPR · 835 · EOB · CARC · RARC · group code · CO/PR/OA/PI · CO-45 · CO-97 · CO-16 · N19 · allowed amount · contractual adjustment · write-off · preventable administrative write-off · line-level posting · zero-pay line · autoposting · exception queue · underpayment · expected allowed amount · variance threshold · takeback · offset · provider-level adjustment · reversal and correction · coordination of benefits · secondary claim · crossover

Monday morning

You should be able to:

• Balance any remittance line without a calculator's help.
• Say who owes an amount by reading two letters.
• Read a CARC and a RARC together and state the payer's assertion in a sentence.
• Route a denial somewhere other than the contractual adjustment bucket.
• Name your write-off categories — and have one for preventable.
• Say whether you can autopost, and if not, whether it is enrollment.
• Compute one expected allowed amount from a contract. Start with one.

The Encounter — day 17.

   LINE 1  99214-25  CHG 185.00  PAID  0.00   CO-45 56.60 · CO-97 128.40 · N19
   LINE 2  20610-RT  CHG 150.00  PAID 62.88   CO-45 71.40 · PR-2 15.72
   LINE 3  J1030     CHG  18.00  PAID  5.02   CO-45 11.72 · PR-2  1.26
   LINE 4  36415     CHG  14.00  PAID  2.40   CO-45 11.00 · PR-2  0.60
   ───────────────────────────────────────────────────────────────────
   PAID 70.30  ·  PATIENT RESPONSIBILITY 17.58  ·  OPEN DENIED 128.40

Line 1 carries TWO adjustments. CO-45 \$56.60 prices the visit at \$128.40; CO-97 then takes the whole allowed amount away as bundled. The payer priced it and declined to pay for it — which is why the appealable amount is \$128.40, not \$185.00 (Ch. 23 §23.7).

The \$30.00 copay does not move. The E/M line paid nothing and produced no PR-3; the payer never adjudicated a copay because it never paid the visit. It finds its home on day 66, when the second remittance pays \$98.40 and reports \$30.00 as PR-3. That is why the statement waited until day 70 — and why it shows \$47.58 of responsibility, the \$30.00 credit, and a balance due of \$17.58.

Three lines paid. The arithmetic balanced. An EFT arrived.

And the account was \$128.40 short in a way only a person routing the CO-97 on purpose would ever see.

Q4 remains open.