Payment Posting 101 for Medical Billing: A Simple Guide for Providers
2 days ago
10 min read
Introduction
Imagine this common situation. Your clinic is busy every day. Your therapists are working hard with patients, and your front office is sending out dozens of claims to insurance companies every week. You feel like business is doing great.
But when you look at the company bank account, the numbers do not match the work you are doing. Money seems to be missing. Patient bills are piling up on a desk, and you are not sure exactly who owes what.
What went wrong?
For many ABA and therapy practices, the problem is not the therapy itself. The problem is not even the way you send claims. The issue is usually in the final step of the revenue cycle. This step is called payment posting.
Many people in healthcare overlook payment posting in medical billing. They think it is just boring data entry or simple typing. But in reality, it is the most important step to knowing if your business is actually making money. If you do not get this step right, you are flying blind.
This guide will explain exactly what is payment posting in medical billing, why it is so important for your practice, and how you can fix your process to stop losing revenue.
What Is Payment Posting in Medical Billing?
To understand this concept, think about your personal checkbook or your banking app. When you buy groceries, you see money leave your account. When you get your paycheck, you see money enter. If you never looked at your transaction history, you would not know how much money you really have to spend.
So, what is payment posting in medical billing? It is the process of recording payments into your practice management software. It is the moment when "potential money" becomes "real money" in your financial books.
It involves taking information from three main sources and logging them into your system:
EOBs (Explanation of Benefits): These are paper documents sent by insurance companies. They explain what they paid for a specific claim.
ERAs (Electronic Remittance Advice): These are digital versions of the EOB. They come directly into your software from the insurance company.
Patient Payments: This includes cash, checks, or credit card swipes taken at the front desk for copays, deductibles, or coinsurance.
The "101" on The Missing Piece
Payment posting in medical billing includes more than just logging the check amount. To do it right, you must also log three other things:
Adjustments: This is the difference between what you billed the insurance and what they agreed to pay. You usually have to "write off" this amount based on your contract.
Denials: If a claim is not paid, the insurance company sends a code explaining why. You must log this code so you can fix it.
Patient Responsibility: This is the amount the insurance says the patient must pay.
It is important to know what this process is not. It is not the same as sending a claim. It happens after the insurance company has made a decision. It is the final step that closes the loop on a patient visit.
Why Payment Posting Matters: Key Impacts
When your team handles payment posting correctly, your business runs smoothly. When they do it poorly, it creates a chain reaction of problems. Here is how it affects different parts of your practice.
1. Cash Flow and Revenue
This is the most obvious impact. If you do not post payments quickly, your reports will show that you have less money than you actually do. Or worse, if you miss posting a physical check, that money might sit in a drawer and never get used. Accurate posting lets you see exactly how much cash is available to pay rent and salaries.
2. Accounts Receivable (A/R) Clarity
Accounts Receivable, or A/R, is the money owed to you. If your posting is slow, your A/R report is wrong. You might have staff calling insurance companies to chase a claim that was actually paid two weeks ago. This wastes time and frustrates your staff. On the other hand, if a claim was denied and you have not posted the denial, nobody knows it needs to be fixed.
3. Denial Management
This is where many practices lose a lot of money. Insurance companies often deny claims for small reasons. Maybe a name was spelled wrong, or a code was missing. When you post payments, you also post these denials.
Good Posting: The denial is flagged instantly. Your team fixes it and resends it within a few days.
Bad Posting: The denial is ignored or posted as a "zero payment" without a reason. The claim sits there until it is too late to appeal.
4. Secondary Billing
Many ABA patients have two insurance plans. For example, they might have a private plan from a parent's job and Medicaid as a backup. You cannot bill the second plan until the first plan has paid and the payment is posted. If your posting is backed up, your secondary billing stops completely. This delays your revenue by months.
5. Keeping Your Books Clean for Audits
If an auditor looks at your books, they want to see that every penny is accounted for. If you have "phantom" balances or payments that do not match bank deposits, you could be in trouble. Accurate posting protects your business integrity and keeps you safe from compliance issues.
Common Pitfalls and Hidden Risks
Even smart billing teams make mistakes with payment posting in medical billing. Here are the most common traps that ABA and medical practices fall into.
Manual Data-Entry Errors
Humans make mistakes. If a staff member types "$100.00" instead of "$1000.00," your books are off by $900. If they type the wrong patient account number, they might apply a payment to Mrs. Jones that belonged to Mr. Smith. Now Mrs. Jones thinks she is paid up, and Mr. Smith gets an angry letter about a past-due balance. This creates unhappy patients and inaccurate records.
The "Lag" Effect
Some practices wait until Friday to post all the payments from the week. This creates a "lag." For those five days, your data is old. If a patient comes in on Wednesday and asks, "Do I owe anything?" the front desk might say "No" because the payment from Monday has not been posted yet. Later, you have to call that patient back and ask for money. This looks unprofessional and makes collecting money harder.
Ignoring "Zero-Pay" EOBs
Sometimes you get an EOB that says the insurance paid $0. This usually happens because the money went to the patient's deductible. Lazy posting teams might throw this paper in a "to-do later" pile because there is no check attached. This is a huge mistake. That EOB is telling you that the patient now owes you money. If you do not post it, you cannot bill the patient.
Poor Reconciliation
Reconciliation is just a fancy word for matching. You must match the total amount posted in your software to the total amount deposited in the bank. If the bank says you got $5,000, but your software says you posted $4,800, you have a problem. Without daily matching, money can disappear without anyone noticing.
Best Practices for Effective Payment Posting
If you want to fix your process and master what is payment posting in medical billing 101, follow these practical rules. These work especially well for therapy and ABA practices.
1. Use Electronic Posting (ERAs)
Stop typing by hand if you can. Most insurance companies offer ERAs. This is a digital file that uploads directly into your billing system. It posts the payments, adjustments, and denials automatically. Your staff just needs to review it. This reduces typing errors significantly.
2. Create a Standard Operating Procedure (SOP)
Do not let staff guess how to do their job. Write down a set of rules.
When to post: All payments must be posted within 24 hours of receipt.
How to handle denials: If a claim is denied, it must be moved to a specific "denial queue" immediately.
Write-offs: Clearly define when it is okay to write off a balance and who has the permission to do it.
3. Schedule Regular Audits
Once a week or once a month, pick 10 random accounts and check them. Did the payment match the bank deposit? Was the adjustment correct? Catching small errors early prevents them from becoming big problems later.
4. Track Your Numbers
You should keep an eye on specific metrics (Key Performance Indicators).
Posting Accuracy: How often do we make a mistake?
A/R Days: How long does it take to get paid?
Net Collection Rate: Are we collecting everything we are owed?
5. Staff Training
Payment posting is skilled work. Do not just give this job to the newest person in the office. Ensure they understand how to read an EOB and understand the difference between a copay, a deductible, and coinsurance.
Special Considerations for ABA & Behavioral Health
Payment posting in medical billing is even harder for ABA providers than for regular doctors. Here is why.
Recurring Sessions
In ABA, a child might have therapy five days a week. That is 20 visits a month. That means you have hundreds of lines of data to post for just one patient. If you make a mistake in one code (like 97153), you might repeat that mistake 20 times before you catch it. The volume of data is much higher than in a standard medical practice.
Authorization Issues
ABA requires prior authorization. If an authorization expires, the insurance will deny the claim. A good payment poster will see this denial on the very first day. They can alert the clinical team to stop services or get a new authorization. If the poster is slow, the therapists might keep working for weeks for free because they do not know the authorization is gone.
Variable Patient Responsibility
ABA therapy can be expensive. Families often have high deductibles. You need to post payments quickly so you know exactly how much the family owes. If you wait a month to send a bill, the family might owe thousands of dollars all at once. This is hard for them to pay and hard for you to collect.
A Sample ABA Workflow
Claim Sent: You bill for 20 hours of therapy.
ERA Received: The insurance sends a digital response 14 days later.
Auto-Posting: The software posts the payment automatically.
Review: A staff member checks for denials (e.g., "Authorization Missing").
Patient Bill: The software automatically moves the deductible balance to the patient’s account.
Statement Sent: The patient gets a bill within 5 days.
Real-World Impact: Two Hypothetical Examples
Let’s look at two different clinics to see how this plays out in real life.
Clinic A: The Manual Mess Clinic A sees 50 kids a week. They have one person doing billing, and she posts payments manually whenever she has free time. Often, she is two weeks behind.
The Result: One month, an insurance payer changed their rules for code 97155. They started denying it. Because Clinic A was behind on posting, they did not see the denials for three weeks. They kept billing the wrong way. By the time they noticed, they had lost $12,000 in revenue that they could not recover.
Clinic B: The Automated Machine Clinic B uses automated ERAs. They reconcile their bank account every morning at 9:00 AM.
The Result: When the same insurance payer changed the rule for code 97155, Clinic B saw the denial the very next morning. They fixed their coding immediately. They only lost one day of revenue, which they quickly appealed and got back. Their cash flow remained steady, and their staff was less stressed.
Step-by-Step Checklist for Practices
If you want to improve your payment posting today, start with this list:
Check your software: Are you set up to receive ERAs from every payer? If not, call your clearinghouse.
Set a timeline: Make a rule that all EOBs must be posted within 24 hours.
Separate duties: If possible, the person opening the mail should not be the same person posting the checks. This prevents theft.
Create a denial log: Every time a poster sees a denial, they should write it in a shared log for the billing team to fix.
Review patient balances: Once a month, check if patients are being billed correctly after insurance posts.
When to Consider Outsourcing
Sometimes, a practice grows too fast for the front desk to handle. You might want to hire an outside company to do your billing (RCM).
Pros of Outsourcing:
Expertise: Billing companies do this all day. They know the codes and the rules.
No Staff Issues: You do not have to worry about your biller going on vacation or quitting.
Better Accuracy: They usually have strict quality checks.
Cons of Outsourcing:
Cost: You have to pay them a percentage of what you collect.
Less Control: You cannot just walk over to their desk and ask a question. You have to trust them.
Conclusion
Payment posting is the foundation of your financial house. It might not be the most exciting part of running an ABA practice, but it is the most critical for keeping your doors open. It ensures you get paid, it keeps you safe during audits, and it helps you catch problems before they destroy your revenue.
Take a look at your process today. Are you Clinic A or Clinic B? By using automation, setting clear rules, and checking your work, you can stop revenue leaks and focus on what matters most: helping your patients.
Frequently Asked Questions (FAQs)
What is payment posting in RCM?
In Revenue Cycle Management (RCM), payment posting is the step where you record the payments received from insurance companies and patients into your billing system. It is the process of reconciling the money you expected to get with the money you actually received. It allows you to close open invoices and update accounts receivable.
How do you ensure payments and adjustments are posted accurately?
To ensure accuracy, you should use Electronic Remittance Advice (ERA) to automate the entry of data, which reduces human typing errors. You must also perform daily reconciliation, which means matching the total amount posted in your system to the total amount deposited in the bank account. Finally, having a second person audit a random sample of accounts each week helps catch any mistakes.
Why is it important to collect patient payments?
Collecting patient payments (like copays and deductibles) is vital because it makes up a large portion of a practice's revenue. As insurance plans cover less, patients are responsible for more of the bill. If you fail to collect these payments, you are essentially working for a discount. Furthermore, collecting these payments promptly improves your cash flow and reduces the cost of sending multiple statements and making collection calls later.