Reversals can be tricky to understand and post correctly, but the key is simple: Always map the reversal exactly the same way you mapped the original EOB.
Once the reversal is posted, it cancels out the prior transaction and you can then post the new decision from the payer.
Example of reversals
Lets take a look at a few examples to better understand what a reversal is and how to handle them in Patient Studio.
We’ll use this claim for the examples below:
1. Denied → Then Paid
In this scenario, the payer originally denied your claim. Since a denial does not include any payments, the charges remain fully outstanding.
After fixing the claim (for example, by adding the GP modifier) and resubmitting, the payer will first send a reversal to back out the denial, followed by a new decision with payment.
1.1 Original claim submitted
You consider these denied and map the response to the denied. It’s important to understand that when you map to denial you do not post any payments, so the balance of these 2 charges is still. (You fix these claims by adding the GP modifier and resubmit to the insurance.)
The payer now sends 2 responses. A reversal of their previous response and a new decision. These reversals will be negative values designed to reverse or “back out” the original EOB posted.
1.2 Reversal (Negative values backing out the original payment)
In this example, we marked these as denied originally and should do so in the reversal. Once the reversal is posted, you are free to post the new decision.
1.3 New Decision
2. Units corrected and resubmitted
In this scenario, the claim was originally submitted with fewer units than intended. After realizing the mistake, you resubmitted the claim with the corrected units.
To account for this change, the payer sent an EOB that reverses the original payment (backing out the old transaction) and then applies the new payment based on the updated claim.
2.1 Original EOB response (with fewer units than you intended)
2.2 Reversal
After posting any reversal, the claim should look like nothing was ever posted. Now you can resubmit the claim with the correct units.
3. Paid → Then Denied
In this scenario, the payer originally paid the claim. Later, they reprocess it and then decide that the services are not covered. To correct this, they first send a reversal to take back the original payment, followed by a new decision showing the charges as denied.
3.1 Original EOB response
3.2 Reversal (Negative values backing out the original payment)
3.3 New Decision
Avoid Mismatched Mapping on Reversal (Common Pitfall)
From an accounting standpoint if you always match the transaction type of the original EOB and the reversal, you will be good to go.
In the example below the original ERA was mapping $80 to write off and $5 for the patient. However in the reversal ERA the user changed the mappings and now the reversal will not revert the original ERA.
Original $80 - $60 from the reversal = $20
Original $5 - $25 from the reversal = ($20)
The goal of a reversal is to get back to $0 so both of these would be incorrect.
Key Takeaways
Reversals = payer backing out a previous EOB.
Always map reversal lines the same way as the original.
After posting the reversal, the claim balance resets to the original charges.
Only then should you post the new decision.