What are "remittance advice" in healthcare reimbursement?

Remittance advice is a critical component in the healthcare reimbursement process. It refers to documents generated by insurers that provide detailed information about payments made to healthcare providers for services rendered. These documents outline the amount billed, the amount approved for payment, any adjustments or deductions made, and the reasons for those adjustments. They serve as a formal notification to providers about how claims have been processed and the payout they can expect.

This information is essential for healthcare providers as it helps them understand the specifics of the financial transaction related to patient care, assists in reconciling accounts, and aids in managing their revenue cycle effectively. By receiving remittance advice, providers can identify any discrepancies in payment and seek further clarification if needed.