Reconciling IDR
Payments and Fees

Billed charges describe the original claim. An offer is a party’s proposed payment amount. A determination records the selected offer. Cash received is a payment you can trace and allocate. Putting all of these numbers in one “recovery” column makes it hard to tell the provider how much has actually arrived.

Record the determination or settlement as written, then establish what remains payable after accounting for the applicable prior payments and patient cost sharing. Do not assume the full determined amount is an additional payer payment.

The CMS overview distinguishes the determination from subsequent payment and explains how a negotiated total includes amounts already paid and applicable cost sharing. Check those amounts against the case documents before calculating the balance.

Retain the dispute reference, claim and line identifiers, payer reference, payment date, payment trace, and remittance. A single deposit may cover more than one claim. Match the remittance to the funds, then allocate each amount to the correct claim or dispute.

CMS describes how the electronic funds transfer and remittance advice transactions support payment reassociation in its EFT and remittance guidance. Keep the payment trail available even when your posting system shows a zero balance.

This arithmetic is not a predicted recovery, accounting policy, or instruction to bill a patient. Actual balances depend on the determination or agreement and the full payment record.

Keep federal administrative fees, certified IDR entity fees, service-provider charges, and refunds in distinct entries. Record who paid each amount, the supporting invoice or receipt, who is entitled to any refund, and whether the refund has actually arrived.

Use the fee rules applicable to the dispute and your executed service agreement. Avoid subtracting an expected refund as if it were cash or describing a provider’s net proceeds before the relevant costs are reconciled. Check CMS guidance for disputing parties for the federal process.

• Partial payment: record the matched amount and unresolved difference; retain the follow-up owner.
• Unmatched deposit: hold it for investigation instead of assigning it to the largest open dispute.
• Missing remittance: request the supporting explanation and keep the payment reference.
• Reversal or correction: connect it to the original posting and retain both versions.
• Disputed calculation: document the disagreement and escalation path before closing the record.

Separate disputes in progress, determinations issued, and payments received. A monthly cash report should identify receipts during that month; a determination report should identify decisions during that month. A payment received this month may relate to a determination from several months ago.

If reporting a collection percentage, name the denominator, observation period, included claims, treatment of partial receipts, and whether fees are deducted. Do not divide this month’s deposits by this month’s determinations and present the result as an eventual collection rate.

Name the people responsible for verifying bank receipts, posting payments, checking balances, reconciling fees, and updating the provider. Every unresolved item needs someone to take the next step. Keep its supporting records available through the agreed secure channel.

Use this workflow as a starting point. Your billing team and IDR partner will need to settle the reporting format, division of work, and access to records.