Tips to Improve Your Electronic Remittance Advice (ERA) Process

The advent of technology has helped to create systems to ease the billings and collections processes of clinics and medical practices all across the board – including ABA therapy practices.
One area that has received a meaningful upgrade is the processes involved in Remittance Advice (RA) notices of payment. ABA therapy practices are now able to benefit from Electronic Remittance Advice rather than deal with the standard paper format.
ERAs provide data and administrative efficiencies that are not available through the standard RA notices.
Amvik Solutions recognizes the value of converting manual practices into automated tasks handled by computers and programs. Additional benefits of utilizing ERA include:

• Improve communication and payment notification
• Faster account reconciliation
• Automation of follow-up action items
• Ability to export data
• Additional detailed information
• Lower operating costs
• Report creation

These ultimately enhance worker and clinic productivity.

Reminder

ERAs are intended to work in unison with your practice management system (PMS) and improve the efficiency of your electronic transactions. It is important to recognize, however, that ERAs and PMS will not always allow for 100% automation. Because of variations in PMS, some electronic transactions will require for personnel to intervene and correct issues – such as in the case of denials.
Thus, it is important that your billing department and responsible staff members be properly trained in your particular PMS and understand how to provide ERA support.

ERA Process Flow

While payers may have a few varying specifics in regards to processing payments, there are a few general steps that are fundamental to processing ERAs.
Questions your billing department should ask include:

1. Paid claims
   1. Contractual reductions to allowed amount should be equal to related fee schedule.
      • Yes – Continue process
      • No – Personnel must intervene
   2. Note contractual reductions on patient’s account.
   3. Does the patient’s portion of the payment make up the difference between the payment and the allowed amount?
      • Yes – Continue process
      • No – Personnel must intervene
   4. Note payment to patient’s account and record patient responsibility details (deductibles, co-pay responsibilities, etc.).
   5. Remaining balance.
      • Yes – Bill co-insurance or supplemental insurer or patient
      • No – Account is settled
   2. Rejected claims because of incomplete information
      1. Billing personnel needs to identify the missing information and re-submit to payer.
3. Denied claims
1. Understand the reason for denial and who is responsible for payment (insurer, patient, or contractual obligation) and compare to your clinics PMS payer configuration.
2. Is staff review required?
   • Yes – Write-off reduction or denial
   • No – Personnel will need to review claim and submit appeal with the necessary supplemental documentation and information
3. Remaining balance?
   • Yes – Bill supplemental insurance and/or patient
   • No – Account is settled
4. Claim reversal procedures – this occurs when payer changes payment allocation or patient responsibility.
   1. Analyze initial claim contractual reduction and have billing personnel post opposite amount.
   2. Identify initial payment and post opposite amount.
   3. Archive patient responsibility amounts from previous claims that may no longer be correct.
   4. Note changes to account and any other claims or patient bills that are out.
   5. Note claim in your clinics PMS as pending and wait for corrected claim amount.

Dealing with ERA Payment Errors

One of the biggest benefits of the use of ERAs in tangent with an effective PMS is that your team should be able to flag and readily identify errors that can negatively affect claim outcomes. This will help billings and collection staff with work efficiency.
Vital terms that your team should familiarize themselves when dealing with an ERA include:

• Claim Adjustment Group Code (CAGC): CAGCs generally identify responsibility for adjusted amounts. The format for CAGC is two alpha characters and include:
  • CO – Contractual Obligation
  • CR – Corrections and Reversal
  • OA – Other Adjustment
  • PI – Payer Initiated Reductions
  • PR – Patient Responsibility
• Fee Schedule: Your PMS can ensure the appropriate fee schedule is utilized for adjudication and matches with the appropriate insurer fee schedule.
• Class of Contract Code: Contained in the REF segment, this detail notes the product or contract under which a specific claim was settled.
• Allowed Amount: The sum the insurer will reimburse to cover each service. The patient may be responsible for any amount exceeding the allowed amount.

These data elements within an ERA can be identified by your clinics PMS to properly match payments with services. When necessary, these flags can be used by your billing and collections staff to appeal denials, correct rejections, or develop write-offs.

ERA Overpayment Recovery Process

The overpayment recovery process is initiated in cases in which you receive an excess of amounts properly payable under the insurer’s contracted standards. Overpayments occur because of:

• Administrative and processing errors
• Incorrect or insufficient documentation
• Medical necessity errors

In many cases, claim details are sent via ERA notification, or through email, letter, or facsimile. The timeframe for the overpayment recovery process is dependent on the time of length specified by the insurer or contract requirements. Some remittance periods range from 30 to 90 days. When the provider does not return funds within the specified amount of time, the process is initiated.
Overpayment recovery processes can be a complicated and tedious task for billing departments as they require offsetting adjustments to return the overpayment recovery amount until monies are recovered in a later ERA.
This process requires your clinic’s billing department to remain diligent and track data against future ERAs and through their accounts payable system.
Your PMS should be capable of handling and tracking overpayment related processes, tasks, and items:

• Overpayment notifications from payers through multiple channels
• Overpayment settlement checks
• Delayed recovery of overpayments
• Receipt and crediting of settlement checks

Your personnel should initially react to an overpayment report to ensure that an appeal – or other action – is not necessary.

Let Amvik Solutions help you better understand ERAs and their role in your PMS.

You need flexible practice management system software that can effectively work with the ERAs you receive from insurers.
Amvik Solutions’ WebABA practice management software is perfectly designed to automate processes associated with an ERA so that you can enhance your clinic’s flow of tasks, better manage business aspects, and improve the billings and collections process to increase your finances.
Our WebABA can support your ABA therapy practice in a number of operations and tasks including:

• Billing—private insurance, school, regional center or private pay
• Automatically using correct CPT Category III codes for billing
• Automation of ERA processes
• Payroll
• HR module
• Electronic signature feature
• Customizable reports
• 24/7 access on any platform
• HIPAA complianc
• Management control

If you haven’t implemented a practice management software in your practice yet, now is the time. Contact Amvik Solutions today at (805) 277-3392 to find out more about our WebABA services, billing services, credentialing services, and other options we provide.