ABA Therapy Payment Application Best Practices

A critical area in ABA Therapy insurance reimbursement is the payment application process. Follow these tips and steps as best practices for this area of revenue cycle management and you will always be on top of the game.

We’ve talked about Billing best practices, and I’m a firm believer that investing up front in timely and accurate billing will pave the way for better Collection outcomes. In this blog, we will talk about what happens in between billing and collections, which I refer to as “payment application.” Keeping payment application as a specific step with focused attention will allow you to immediately act upon any insurance reimbursement issues and keep your documentation organized. Some providers get overwhelmed with the collection process, understandably, but having good payment application steps will help provide structure for the necessary follow up. The payment review and application process is a tool that should be used often.


  1. First, let’s talk software. Do you have an adequate software application that will track your payments against what you have billed? If not, you need to set up something in Excel or Access, some means to track what is coming in against what you have billed. You could be losing money by not tracking this critical information.
  2. Are you billing at fee schedule or a contracted rate? If you are billing at fee schedule, you will want to keep that in mind for revenue projections based on amount billed, but also when your payments come in, you expect to see an adjustment.
  3. Review Explanation of Benefits (EOBs) closely, not only for denials but also for short pays, skipped payments, or incorrect payments.
    • Things to watch for:
 incorrect contract rate allowed,
processed as out of network instead of in network, everything showing allowed but reflected as all patient responsibility later in the year when deductibles have already been met.
  4. Set up a process to contact insurance companies at least weekly regarding all items in #3 to resolve. Don’t let them pile up to where they become unmanageable.

Steps to accurate payment application:

  1. If you do not have an accounting department that manages the daily deposits, treat your business as if you do. Photocopy or scan copies of all checks from insurance and families to save and create a “batch” of daily payments.
  2. Deposit checks frequently and according to the batches created in step 1. Having this information organized will be beneficial for year-end tax information.
  3. If you are getting Electronic Fund Transfers (EFTs) to your bank account, print the EOBs or match up from the mail and save with the other daily payments above.
  4. Use your software or Excel or Access files that you have created to post your payments on a regular basis. If not daily, at least once a week.
  5. When posting payments, pay close attention to the patient responsibility versus an insurance error that needs to be followed up on (see Tip #4).
  6. Tie out the total amount applied to the check amount. Tie out all checks applied to the deposit amount in your bank account. Keep in mind that your practice management software or Excel information needs to provide solid documentation for your accounting software or to your accountant for year-end taxes.
  7. Appropriately allocate patient responsibility amounts during payment application.
  8. Follow up with patient invoices weekly, semi-monthly, or monthly based on the payment application. Note: if you have Copay amounts, you are allowed to collect those up front.

Take control of your Accounts Receivable by adding these simple steps in your process flow. Following this flow will keep you in touch with what insurance companies are doing with your billing and alert you early to issues that you may need to attend to. And, if you have someone working on collections, having up to date payments will save time and effort on phone calls for follow up on outstanding claims.

Having a great Payment Application process in place is your best secret weapon for managing your receivables. Knowing what insurance owes from incorrect posting or new billing versus what families owe can help you make critical decisions in your business.

If you have any questions about these practices, contact us or call (520) 800-4740 and we can help. Or, if you’d like help establishing these practices in your office, we can help with that as well and get you set up for success! No client is too small, and we would love to talk and see how we can help.