Cash flow management is one of the most critical aspects of a healthcare provider's financial health. Efficient cash posting can play a significant role in optimizing accounts receivable (AR) processes, reducing delays in cash flow, and improving overall financial performance. By driving efficiencies in cash posting, hospitals and healthcare organizations can accelerate AR and improve their cash flow—ensuring that revenue streams are captured accurately and quickly.

In this blog, we'll explore key strategies and best practices for optimizing cash posting processes, with a focus on automation, proper setup of transaction codes, and operational excellence.

Automating Cash Posting for Efficiency

Automation is a game-changer when it comes to cash posting. By automating repetitive and time-consuming tasks, hospitals can significantly speed up the process and reduce errors. Automated systems can handle tasks like:

• Electronic Remittance Advice (ERA) Posting: ERAs allow insurance payments to be automatically posted to patient accounts. By setting up ERA workflows and utilizing claim adjustment reason codes, hospitals can automate denials and adjustments, saving hours of manual entry.
• Automated Contractual Adjustments: Many hospitals underutilize contract management automation. By setting up automatic adjustments based on expected reimbursement rates, hospitals can ensure accurate payment posting without the need for manual intervention.
• Online Bill Payments: Hospitals can leverage systems like Red Spring PersonaPay to automatically post online patient payments into their financial systems, ensuring timely updates to patient accounts.

Efficient use of automation helps hospitals reduce the administrative burden of manual cash posting, minimize delays in payment posting, and create a more transparent and manageable cash flow process.

Optimizing AR Transaction Codes

Another crucial area for improving cash posting efficiency is the proper setup and use of AR transaction codes. Transaction codes help define how payments, adjustments, and denials are posted within the financial system. It's essential to regularly review and update transaction codes to ensure they align with the hospital’s needs.

For example, a hospital may need to create specific transaction codes for high-volume payers, such as Medicare Advantage or Medicaid Advantage, to distinguish between various payment types and adjustments. This allows for more granular reporting and easier reconciliation of accounts.

Additionally, hospitals should consider setting up codes for scenarios like:

• Point of Service Payments: If the hospital collects payments at registration or point of service, transaction codes can help track these payments and offer insights into upfront collections.
• Charity Adjustments and Discounts: Creating separate transaction codes for charity adjustments, administrative write-offs, and prompt-pay discounts ensures proper tracking for financial reporting and compliance purposes.

Having the right transaction codes in place ensures accurate posting, enables better reporting, and simplifies the overall cash posting process.

Best Practices for Managing Unapplied Cash

Unapplied cash is another area where many hospitals struggle. Unapplied cash refers to payments received that have not yet been posted to specific patient accounts due to missing remittance information. It’s critical to implement a process for tracking and remediating unapplied cash to prevent it from sitting idle.

One best practice is to create a monthly industrial account for unapplied cash. For example, a hospital might create an account named "Unapplied Cash – October 2024" to track all unapplied payments for that month. Once the corresponding remittance advice is received, payments can be reversed from the unapplied account and properly posted to the correct patient account.

This process not only ensures that unapplied cash is managed efficiently but also helps prevent it from negatively impacting the hospital’s financial statements.

Leveraging Technology for Long-Term Success

Hospitals should also take advantage of their existing technology to streamline cash posting and enhance their overall revenue cycle management. For example, MEDTEAM’s cash posting services offer hospitals the ability to automate many of these processes while providing transparency through daily balancing reports.