An RA is the detailed reply sent by a payer in response to a claim for a medical service. The details in the RA assist the biller in reconciling the payment that is received or provides the explanations for any non-paid items.
Many times it can also be referred to as an Explanation of Benefits (EOB).
An RA can come in two forms:
paper EOB : Standard Paper Remittance (SPR)
ERA : Electronic Remittance Advice (ERA)
Both contain similar information, but the ERA format has numerous advantages over the paper format. Most ERA’s are received within days of the claims processing by the payer instead of the weeks in can take for the SPR to arrive via mail.
Most of the best Medical Billing Software enables ERA data to be directly imported into the billing system where it can be auto-adjudicated.
This eliminates the time consuming and error prone task of manually keying in all the data from the RA
Iridium Suite Medical Billing Software by Medical Business Systems contains an integrated automated Payment Posting module that seamlessly imports and adjudicates all of your ERA’s.
The explanation of payment on the RA is typically detailed in a “coded” fashion utilizing combinations of alpha and numeric code sets. Medicare utilizes the most standardized version of these code sets, and they consist of four types:
Group codes: identify the responsible party or category of adjustment and are combined with CARCs
There are five group codes:
- CO-Contractual Obligation
- CR-Corrections and Reversal
- OA-Other Adjustment
- PIR-Payer Initiated Reductions
- PR-Patient Responsibility
Claim Adjustment Reason Codes (CARCs): explain the adjustment of the non-paid amount
For a complete list of CARCs, visit Washington Publishing Company's website by clicking here.
Remittance Advice Remark Codes (RARCs): provide a more detailed explanation of the adjustment of a service line or claim level payment
For a complete list of RARCs, visit Washington Publishing Company's website by clicking here.
Provider Level Adjustment Codes: indicate an adjustment that applies to the pay to provider, not a specific service line or a claim
Provider Level Adjustment Codesare specific to Medicare. For a complete list, see the CMS publication by clicking here.
Follow this link to download an informational white paper on “Understanding Explanation of Benefits Statements.”
The Medicare Learning Network in April 2013 released “Remittance Advice Information: An Overview” Fact Sheet (ICN 908325). You can access this publication by clicking here.
CMS to Update the Benefit Manual for ESRD PPS
CMS details in a recent publication of the “MLN Matters” an implementation date of September 9, 2013 for the revisions to the "Medicare Benefit Policy Manual”. The manual will be updated to reflect change request (CR) 8261 providing information on the end-stage renal disease prospective payment system (ESRD PPS).
ESRD PPSThe background and implication of the ESRD PPS, are as follows:
•In August 2012, CMS released an analysis of patient claims in the new ESRD prospective payment system, which showed that this payment system has had no negative effects on patients’ health.
•The ESRD PPS, first implemented in 2011, expands renal dialysis services included in the single bundled payment to the dialysis facilities and provides for patient case-mix adjustments, facility level adjustments, and outlier payments. It is intended to improve efficiency.
•CY 2013 will be the third year of a four-year transition to the new payment system. The overall impact of the CY 2013 changes is projected to be a 3.0 percent increase in payments.
Hospital-based ESRD facilities have an estimated 3.6 percent increase in payments compared with freestanding facilities with an estimated 2.9 percent increase. Urban facilities are expected to receive an estimated payment increase of 3.0 percent compared to an estimated 2.9 percent increase for rural facilities.
•The ESRD QIP aims to promote continued improvement in the quality of care provided to patients with ESRD. The final rule focuses on clinical measures and has added the following QIP reporting measures to cover a broader range of patients who receive dialysis care:
o To evaluate anemia management
Anemia Management, a reporting measure.
o To evaluate dialysis adequacy
A clinical Kt/V measure for adult hemodialysis patients.
A clinical Kt/V measure for adult peritoneal dialysis patients.
A clinical Kt/V measure for pediatric in-center hemodialysis patients.
• The overall economic impact of the ESRD QIP is an estimated $24.6 million for PY 2015. The total expected payment reductions will be approximately $12.1 million, and the costs associated with the collection of information requirements for certain measures to be approximately $12.4 million.
• The estimated payment reduction will continue to incentivize facilities to provide higher quality care to beneficiaries. The reporting measures that result in costs associated with the collection of information are critical to better understanding the quality of care beneficiaries receive, particularly a patient's experience of care, and will be used to incentivize improvements in the quality of care provided.