Remittance Advice
An electronic remittance advice is an explanation from a health plan to a provider about a claim payment.
What is a Remittance Advice?
Remittance advice is a document sent to healthcare providers that explains payments and any adjustments made by an insurance company. It includes detailed information and codes to help providers understand the payment process and effectively track their revenue.
This document typically contains payment details such as the total amount paid, the date of payment, and the method used. It also specifies the services rendered, including procedure codes and descriptions, and may include Claims Remittance Advice Remark Codes (RARCs) and Claims Adjustment Reason Codes (CARCs) to explain any changes or reasons for payment decisions.
What is the difference between a Remittance Advice and Explanation of Benefits (EOB)?
Remittance Advice (RA) and Explanation of Benefits (EOB) are both documents explaining healthcare payments, but they serve different primary purposes. RA provides detailed payment and adjustment information to healthcare providers, while EOB explains benefits to the patient.
Remittance Advice (RA) is sent to healthcare providers to detail payments and adjustments from an insurance company, helping them track revenue and understand payment processes.
Explanation of Benefits (EOB) is primarily for the patient, explaining how their insurance plan covered the medical services they received.
RA often includes specific codes like Claims Remittance Advice Remark Codes (RARCs) and Claims Adjustment Reason Codes (CARCs) to explain payment decisions to providers.
What are examples of a Remittance Advice?
A patient visits a healthcare provider for a service. The provider submits a claim to the patient's insurance company. After processing, the insurance company sends a remittance advice to the provider detailing the payment amount, any adjustments, and the reasons for those adjustments using CARCs and RARCs. This helps the provider understand how much they were paid and why, and track their revenue.
A healthcare facility receives a remittance advice electronically from a payer. This electronic document includes a breakdown of payments for multiple claims, the services rendered for each, and any contractual adjustments applied. The facility then uses this information to reconcile their accounts and ensure accurate billing.
An automated system generates a remittance advice for a healthcare provider after an insurance company processes a batch of claims. This advice confirms the payments made by the insurance company for the services provided and includes essential details like the payment date and method, helping the provider efficiently manage their billing and collections.
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