What is Remittance Advice (RA)?

Remittance advice is used across various industries.
In relation to healthcare specifically - Here’s how remittance advice works. A healthcare provider receives remittance advice from an insurance company or patient when payments are being made for medical services.
What is it exactly?
Remittance literally means to pay back.
Remittance advice, or RA, is giving further details about a payment that is being made. RA issues documentation to providers that payment is on the way from the payer. This means that the provider can expect payment soon.
However, this is not necessarily proof of payment, but confirmation that payment is en route. Let’s take a few steps back.
After a patient appointment, a healthcare provider will send out an invoice to the payer, whether that be the patient or their form of insurance, that specifically states the services given.
An invoice in simple terms is like a bill for all the services provided.
It shows what care was offered thus what is owed. Once the claim is reviewed and approved the payer will reimburse the provider.
Remittance Advice notifies the provider that payment for the invoice has been transmitted and will be received soon from the payer. How soon? Very soon. Remittance advice is not required but can be issued or requested from either party.
It’s important due to the fact that it ensures payments are correctly applied to outstanding invoices, serves as proof that payment is on its way, and helps maintain accurate financial records.
The RA document tells the provider 3 key things; Which invoices are being paid. How much is being paid. And When the payment is being made.
There are 2 types of remittance advice: Electronic Remit Advice, or ERA, and Standard Paper Remit, or SPR. Electronic Remit Advice is a digital version of the details of payment for the healthcare service. ERA helps streamline the payment and record-keeping processes in healthcare billing.
Standard Paper Remit also known as EOB (or Explanation of Benefits) is a physical, paper document that is sent by a payer. In 2024, it’s no surprise that we are submerged in the digital era.
Due to the fact that most payments are now made digitally and received immediately, SPR is not used as commonly for invoicing, but it is still there.
Some time ago, remittance advice used to be sent alongside a check. This check contained all the information necessary for whomever was processing the check to help them allocate the funds to the correct invoice.
Accounting programs today are able to do this whole process automatically using AI.
But whether it’s documented digitally or on paper, remittance advice will commonly include these things: It includes the Invoice number, the invoice amount and the amount paid, the payment date, as well as any other relevant reference numbers or discounts.
Remittance advice is most commonly used now when transferring large amounts, urgently expected payments, international transfers, or when combining payments.
Remittance ultimately aids in the process of making certain that open balances get settled and providers are being compensated.
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