What is the primary purpose of a remittance advice?

The primary purpose of a remittance advice is to communicate payment information to providers. This document serves as a notification of the payment amount and outlines how the payment was determined, including adjustments, denials, and any patient responsibilities. It provides healthcare providers with detailed information regarding what services were reimbursed and what claims have been processed, enabling them to reconcile their records and understand the financial aspects of the care rendered.

While coding guidance, patient billing notifications, and documentation of medical necessity are important in the healthcare process, they are not the main function of a remittance advice. The focus of this document is specifically on the financial transactions between insurers and providers, making it a crucial element in the billing and reimbursement cycle.