For Healthcare Professionals Office Management Billing & Coding The Basics of a Remittance Advice Learn About These Medical Claim Notifications Print By Joy Hicks Updated November 26, 2018 Carolo7/Getty Images More in For Healthcare Professionals Office Management Billing & Coding Staffing & Operations Patient Relations Personal Health Information Geriatric Care Healthcare Compensation Medical Technology Medical Supplies A Remittance Advice (RA) is a document supplied by the insurance payer that provides notice and explanation of reasons for payment, adjustment, denial and/or uncovered charges of a medical claim. It usually accompanies Medicare and Medicaid payments. Often it is referred to as an explanation of payment (EOB) by other insurance payers. Types of Remittance Advice Electronic Remittance Advice (ERA): an RA that is transmitted in an electronic formatStandard Remittance Advice (SRA): an RA that is submitted in a paper format Most insurance payers have implemented the use of the ERA. The benefits include the ability to post payment information automatically and quickly identify denials made during initial billing to make necessary corrections. The ANSI 835 is the electronic payment and remittance advice standard format for health care claims. HIPAA regulations require the use of 835 as a set of rules to replace paper EOB's when health care providers receive electronic payments. What Is Included on a Remittance Advice Remittance Advice should include some or all of the following information: Payer Paid Amount: the dollar amount paid by the payerApproved Amount: the approved amount equals the amount for the total claim that was approved by the payerAllowed Amount: the allowed amount equals the amount for the total claim that was allowed by the payerPatient Responsibility Amount: the amount of money that is the responsibility of the patient which represents the patient copay, coinsurance, and deductible amountsCovered Amount: the covered amount equals the amount for the total claim that was covered by the payerDiscount Amount: the dollar value of the primary payer discount or contractual adjustmentAdjudication date: the date the claim was adjudicated and/or paid The remittance advice may also show the payers internal control number (ICN), check number, service codes, description of services, denial reason codes, and remark explanations. Electronic Remittance Advice (ERA) Using electronic remittance advice (ERA) is a fast and accurate way to post your payments as well as adjustments and denials. The ERA, however, is not effective without the electronic funds transfer (EFT). EFT will assure that your payment will post directly to your bank account to reflect your ERA. You can sign up for these benefits directly or through a clearinghouse. The process will work similar to the electronic billing process. Example: Sample Remittance Advice This sample remittance advice reflects the basic information, category names and other information may differ based upon the insurance payer. ABC INSURANCE COMPANY PATIENT NAME: JOHN DOEPATIENT ACCT: 123123123MEMBER ID NO: 554554554PAYER ICN NO: 123456789XYZDATE OF SVC: 01/01/2012PAYMENT DATE: 01/15/2012SERVICE DESCRIPTION: OFFICE VISITTOTAL CHARGES: $100.00ALLOWED AMOUNT: $80.00DISCOUNT AMOUNT: $20.00COPAY: $20.00COINS: $8.00 (10%)PATIENT RESPONSIBILITY: $28.00PAID AMOUNT: $52.00 REMARKSPAYMENT PAID ACCORDING TO CONTRACT Other terms related to Remittance Advice include: Account Number: a number assigned to each patient visit to identify the charges and payments made for a specific date of service.Coinsurance: indicates how an insurer and an insured split the cost of the medical bill after the deductible has been met. Once the out-of-pocket maximum has been reached the insurer will assume responsibility for 100 percent of any additional costs.Copayment: An amount of money designated by the insurance health plan for the patient to pay for a specified service, usually a flat amount.Deductible: is the portion of any claim that is not covered by the insurance provider and must be paid by the insured before the benefits of the policy can apply. Was this page helpful? Thanks for your feedback! Get tips on how to better manage your health practice. Email Address Sign Up There was an error. Please try again. Thank you, , for signing up. What are your concerns? Other Inaccurate Hard to Understand Submit Continue Reading