What is the purpose of a remittance advice?

The purpose of a remittance advice is primarily to explain payments made by third-party payers. This document serves as a notification to healthcare providers regarding the payments processed for services rendered to patients. It details the amount billed, the payment made by the insurer, any adjustments that have been made, and reasons for denials, if applicable. This information is vital for providers to understand how much they will receive from the payer and what the patient may still owe.

While informing patients about deductibles, alerting providers of upcoming audits, or requesting additional information from providers are relevant aspects of healthcare reimbursement, they do not capture the essential function of a remittance advice. This document is specifically designed to provide clarity and transparency regarding payment transactions between insurers and healthcare providers, ensuring accurate financial management and facilitating the resolution of any discrepancies in billing.