Remittance advice

The remittance advice is the payer’s side of the ledger. For each claim it adjudicated in that payment cycle it shows the billed charge, the allowed amount, the amounts assigned to deductible, coinsurance and copay, the contractual adjustment, the amount paid, and the CARC and RARC codes that explain every difference between billed and paid. It also lists claims denied in full, claims forwarded to a secondary payer, and any offsets or recoupments taken out of the check. The electronic version is the X12 835, the ERA; paper remittances carry the same content in the payer’s own layout.

It is the only document that ties the deposit to the accounts. A bank total tells you what arrived, not which patients it belongs to. Days in A/R, the aging buckets, the net collection rate and the denial list all come from posted remittance data. A remit that arrives and sits unposted leaves paid claims showing as open balances and denied claims looking like they are still in process, and both of those hide inside otherwise normal reports.

The mistake is treating it like an EOB. The EOB goes to the patient and uses plan language; the remittance goes to the provider and uses code sets, and the two can differ in detail. Enroll for ERA with every payer that offers it, work the paper remits in the same posting cycle, and read the provider-level adjustments at the bottom of the remit, because that is where offsets live.