How to Handle Provider Adjustments

 

Provider adjustments are basically adjustments to the check amounts from a payor that may or may not relate directly to the claims included in the ERA/EOB.

Remember that it is important to either post these or you will have to adjust the amount of the payment in ReLiMed in order to get the payment to balance. In other words, if you do not post the included provider adjustments, your payment will end up in “Open Payments” with an unapplied amount which could be negative or positive.

The following is a list of Provider Adjustment codes and below we give a couple examples of how we recommend posting for these.

• Forward Balance (FB) - Used to reflect a balance being moved forward to a future remit or a balance that is brought forward from a prior RA
• Overpayment Recovery (WO) - Used when a reversal and corrected claim are reported and the overpayment is not immediately recouped. WO prevents the prior claim payment from being deducted from the transaction.
• Interest Owed (L6) - Used to report interest paid on claim
• Penalty (L3) - A Penalty is a deduction made in the financial payment to the capitated provider as a result of non-fulfillment of a requirement stipulated in the contractual agreement between the provider and the MCO. Generally, the actual sum forfeited is defined in the agreement. 
• Adjustment (CS) - Used to report the reissued payment amount for a lost check, or to Reduce a FB balance if payer writes off an amount a provider owes

Forward Balance (FB) Example : Use this help document link--> https://relimed.happyfox.com/kb/article/511-how-to-handle-fb-provider-adjustments/

Overpayment Recovery (WO) Example

BCBS payment $0 with Provider Adjustment amount = ($166.68)

 

The 3 claims included in this ERA show 3 reversals of prior payments and then re-paying at a lower rate. However, since the check was $0 they mean to give the overpayment amount = $166.68 to later claims. The “Adjustment IDs” in this case just point to these 3 claims in this ERA:

 

 

In this case we recommend after AP has posted the reversals and the re-posting to add the following adjustment and payment to each claim so the check amount balances to $0:

A contractual adjustment of ($55.56) which increases the balance and a payment of $55.56 with a note of “WO Provider Adj”

 **or you can add a new adjustment reason code of Provider Adjustment through Admin -> Lists -> List Item Entry and select the Adjustment Reason Codes list if you wish.

Later, you will notice these Provider adjustments to be positive in a follow up ERA/EOB:

This means now that they are taking it back and you can actually use the Adjustment ID as an ICN# and search in ReLiMed Auto Post screen for the previous ERA/EOB.

First click Clear to clear out the New status:

 

Then, after letting Auto Post post the claims in this ERA normally, you will be left with a negative unapplied amount and to post the recoups, you would post:

A contractual adjustment of $55.56 and a payment of ($55.56) with a note of “WO Provider Adj”

Interest Owed (L6) Example

 

For this one, it is just interest that they are paying, so you can pick any claim on this ERA to post it to as a negative adjustment (to increase the balance) and a payment. If you did this, you could add a new Payment Reason Code of “Interest” and be able to pull out the totals per month. However, if you would rather keep track in your separate accounting system, you can simply adjust the payment amount of this check/payment from the Batch Management screen.

Search the payment with the Reference ID and then click on the payment amount and change it so it matches the Applied Amount and you can also add comments in the Comments cell:

Penalty (L3) Example

 This is actually a deduction in the payment. So, even though they adjudicated and paid the claims included in the ERA/EOB, they are withholding some of the funds as a Penalty. In these cases, you will want to let Auto Posting post these payments and adjustments normally and then either Post the deduction to a dummy patient to keep track that they did not pay the full amount OR, if you are keeping track of payor payments in your accounting system and do not need to post the penalty, it is fine to adjust the payment amount from the Batch Management screen.