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Healthcare Providers Need a Robust Reconciliation Process to Streamline Patient and Payor Payment Processing

January 14, 2025

As patients bear a larger share of healthcare payments, providers’ financial management processes become more complex. Adding more people to the process or creating more work for the existing people working the process is costly and impractical. A robust, automated bank reconciliation process ensures accurate financial management and compliance.

Revenue cycle management (RCM) solutions that are interoperable and designed to integrate or interface with upstream and downstream applications make bank reconciliation easier. A proper reconciliation process aligns the bank account with deposit batches created in your revenue cycle management (RCM) system. Automated bank reconciliation processes can streamline this task, reducing errors and ensuring all transactions are accounted for, which can be a game-changer for healthcare providers.

5 Benefits of Automating Bank Reconciliation

  1. Reduce Manual Processes and Errors: Manual reconciliation is time-consuming and prone to errors. Automating the process eliminates the tedious task of cross-referencing bank transactions with deposit batches in the RCM system. This ensures accuracy and frees up valuable staff time for more critical tasks.
  2. Detect Unrecorded Payments: Payments sometimes appear in your RCM system but not in the bank. These unreconciled items could be due to timing issues, such as delays in electronic fund transfers (EFTs). Automated reconciliation helps highlight such cases for resolution.
  3. Identify Missing Payor Remittances: Automated reconciliation can also quickly identify any instances where payor remittances appear in your bank account but not in your RCM system. This visibility allows your team to investigate and resolve discrepancies promptly.
  4. Facilitate Daily Bank Fund Confirmation: Automating daily reconciliation allows providers to confirm bank funds promptly, expediting payment posting and enhancing cash flow management. This real-time insight ensures timely identification and resolution of any variances or discrepancies.
  5. Create an Auditable End-of-Month Record: Automated systems maintain a complete and accurate record of reconciled and unreconciled transactions, ensuring compliance and simplifying audits. This traceability is crucial for month-end reporting and financial transparency.

Example: How Automated Bank Reconciliation Works with XiFin RPM

XiFin RPM’s bank reconciliation automation exemplifies how technology can simplify this essential financial process. Here is an overview of how it works:

  1. Bank Data Integration: XiFin RPM requests BAI2 data files from the provider’s bank. These files detail all transactions in the provider’s bank account(s) reflecting EFT, ACH, and other debits and credits. A lockbox is configured to receive a direct file from the provider’s bank.
  2. Deposit Creation: EFTs, ACHs, and other deposit types are recorded in the RCM system, either manually or automatically.
  3. Automated Matching: XiFin RPM reconciles bank transactions with deposits recorded in the system and matches deposit transactions in the BAI2 file to the XiFin deposit batches. The system compares the electronic file transfer (EFT) identification (ID) and dollar amount to ensure correct reconciliation.
  4. Payment Posting: The payment processing team can quickly identify reconciled deposits in XiFin RPM to facilitate timely posting.
  5. Reporting: The results of the automated reconciliation are published in two XiFin business intelligence (BI) reports.
    • Unreconciled Deposits: Highlighting discrepancies for resolution.
    • Reconciled Deposits: Confirming matched transactions for audit purposes.

Employees then use these reports to research any unreconciled items and determine the next action

The Valuable Role of Employee Oversight

While this automated workflow ensures accuracy, human oversight provides additional due diligence, addresses unreconciled items, and ensures processes are executed correctly.

  • Step 1: Employee verifies that the daily bank file has been loaded.
  • Step 2: Employee reviews Unreconciled Detail Report to identify deposits in the RCM system.
  • Step 3: Employee updates RCM system deposit with Bank Transaction ID, as needed.
  • Step 4: Employee bank or payor to resolve discrepancies.

The Role of Automated Bank Reconciliation in Provider Success

Automated bank reconciliation is more than a technical upgrade—it is a necessity in today’s healthcare operations. By aligning financial records with real-time banking data, providers can avoid costly errors, improve cash flow, and support compliance. Whether dealing with complex payor arrangements or managing patient payments for clinical services, automation provides the tools to keep your financial operations running smoothly.

Implementing a robust automated bank reconciliation solution saves time and gives provider teams actionable insights. This helps make better-informed decisions and allows scarce employee resources to focus on higher-value activities.

Want to know more about automated bank reconciliation and robust RCM automation?

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Revenue Cycle Management

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