GBSS: Accounts Receivable, Follow-up Quick Reference Guide

Applies to: All Stakeholder(s): New Onboards

Section B: Revenue Cycle Management

Chapter 2: INTERPRETING REMITTENCES/EOBs

1.1 UNDERSTANDING REMITTENCES/ EOBs

Once a claim is processed by the Insurance payer,

Remits are generated. Remits are also referred as
Explanation of Benefits (EOB). EOB is a statement
explaining costs paid or denied by the Insurance.

Remits are sent to a provider as a hard copy via

paper mail or electronically via an 835 feed.
Electronic Remits are referred as 835 feed or
Electronic Remittance Advice.

1.2 REMIT TERMINOLOGIES

Remit
Definition
Terminologies

Billed Amount The amount charged by the provider for the services
rendered to a patient for a particular ‘Date of Service’.

Contractual
The amount of money a provider must adjust or write-off per
Adjustment
their contract with the payer.

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GBSS: Accounts Receivable, Follow-up Quick Reference Guide
Applies to: All Stakeholder(s): New Onboards

Allowed Amount The maximum amount of money that an insurance carrier

allows for a specific procedure or service.

Charges for the service performed or billed are not covered

Non-Covered
by patient’s insurance.
Charges
Example:
Vision care are majorly non-covered by Insurance plans

Reason Codes Reason Codes communicate why a claim was paid differently
than it was billed

‘CO’ group code pertains to the adjustment or write-off to be

Contractual given by the Provider.
Obligation (CO) Basically, Provider is financially liable for any CO reason
codes.

Reason codes starting with ‘PR’ pertains to Patient

Patient
Responsibility, like deductible, coinsurance, and copay
Responsibility
adjustments.
(PR)
Patient is financially liable for all PR codes.

‘OA’ group codes are used when no other group code applies
to the adjustment. OA codes are used when claim contains
Other inconsistent or missing information.
Adjustments
(OA)
OA For example:
• Male patient treated for pregnancy. The diagnosis is
inconsistent with the patient's gender.
• The date of death precedes the date of service

‘CR’ codes are used for correcting a prior claim. It applies

CR
Corrections and
when there is a change to a previously adjudicated claim.
Reversals (CR)
It explains the reason for change and is used in conjunction
with PR, CO, or OA to show revised information.

PI
Payer Initiated Reason codes starting with ‘PI’ pertains to contract between
Reductions (PI) the provider and the payer and is not the patient's
responsibility.

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GBSS: Accounts Receivable, Follow-up Quick Reference Guide
Applies to: All Stakeholder(s): New Onboards

1.2.1 REMIT CALCULATION

1.2.2 FEE SCHEDULE

Insurance uses ‘Fee Schedule’ to determine the amount allowed for each service. Centers for Medicare and Medicaid
Services, also known as CMS develops a fee schedule - It is a comprehensive listing of fee maximums used to reimburse
a provider.

1.2.3 SAMPLE EOB

EOB are different from payer to payer, however, the components included will remain the same in all EOBs.

Let’s look at a sample EOB from one of the payer:

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GBSS: Accounts Receivable, Follow-up Quick Reference Guide
Applies to: All Stakeholder(s): New Onboards

Indicator Remit details Description

You will find the name of the provider along with the Remit date
1 Provider and Date As per the Remit, provider name is listed as St. Vincent fishers Hospital
and date as 12/18/2018
2 Check Number The Check Number is via which the payment was made

Payer who made the payment. As per the EOB, its Anthem Blue Cross
3 Payer Name
Blue Shield

Patient’s name and patient’s account number are listed in Patient

4 Patient Information
Information section

5 Dates The Admit and Discharge dates are listed in Dates section

HIC Number & Claim HIC Number is the patient’s Insurance policy ID# and Claim Number is the
6
Number Payer’s processed Claim number
Type of Bill is a four-digit code which gives three specific pieces of
information, beginning with zero, the second digit identifies the type of
facility; for example: Hospital or Skilled Nursing Facility, etc. The third
7 Type of Bill classifies the type of care being billed, for example: Inpatient and
Outpatient care. and the fourth digit specifies the sequence of the bill for
a specific episode of care. Referred to as a "frequency" code. For
example: corrected claim or fresh claim

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GBSS: Accounts Receivable, Follow-up Quick Reference Guide
Applies to: All Stakeholder(s): New Onboards

8 Reason Codes Reason Codes explains the payments made on the claim

9 Total Charges Total Charges are the charges billed by the provider to the Insurance

Allowed Charges are the total amount allowed by the insurance against
10 Allowed Charges
each procedure or service item billed
The amount for which Patient is financially liable for, like deductible,
11 Patient Responsibility
coinsurance, and copay
Contract Adjustment is the amount a Provider adjusts or writes-off and
12 Contractual Adjustment
Provider is financially liable for the amount

13 Payment Amount an Insurance company Paid for the claim

14 Service Line Detail section Service Line Detail section of an EOB provides all the payment details

Procedure, Modifiers & All billed Procedure codes, Modifiers and Revenue codes are found in this
15
Revenue Codes section
Contractual Adjustment has been applied for these service lines.
16 CO applied Provider is financially liable for these charges as they are inclusive within
line item no. 5
Patient Responsibility has been applied on this service line as non-
17 PR applied
covered. Patient is financially liable for these charges

18 Paid Amount It indicates the line item which has been paid

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