Reconciling insurance deposits to your bank statement

Why reconcile insurance deposits?

Every insurance payment leaves two trails. The payer sends a remittance (an EOB, EOP, or 835) that explains which claims it paid and how much. Separately, the money arrives in your bank account as a check deposit, an ACH credit, or a virtual card settlement. Reconciliation is the work of proving that the two trails agree, and that what you posted in your practice management system agrees with both.

It catches problems that posting alone won't:

• Money with no explanation. A deposit arrives but nobody has the remittance, so the claims it paid still show as outstanding and may get resubmitted or worked as unpaid.
• Explanations with no money. A remittance was posted, but the payment never arrived, or arrived short. Patient ledgers say the claim is paid; the bank says otherwise.
• Quiet deductions. A payer recovers an old overpayment or a card processor takes a fee, and the deposit is smaller than the claims it covers.

If you only check that your posted total matches the remittance, you'll miss all three. The bank statement is the one record the payer doesn't produce, which is what makes it the best check on the others.

The three records you're matching

The trace number is what ties them together. On a paper check it's the check number. On an electronic payment it's the EFT trace number the payer assigns, which appears in the 835's TRN segment and, if your bank shows it, in the deposit's description. Record it every time you post a payment; a posted batch without one is much harder to match later. For more on the remittance side, see our guide to dental insurance payment posting.

Reading an insurance deposit on your statement

Paper checks are the easy case: your deposit slip lists each check, and the bank line is the slip total. If you deposit several payer checks together, keep the slip (or a scan of it) with the remittances, because the bank will show one amount for all of them.

Electronic payments carry more information, but it's often hidden. Healthcare EFTs are sent through the ACH network in a standard format: the company entry description reads HCCLAIMPMT, and an attached addenda record carries a copy of the 835's TRN segment. A deposit line might look like this:

DELTA DENTAL     HCCLAIMPMT  ACH CREDIT   $4,218.60
TRN*1*1Z8840027*1941234567\

The middle value of the TRN line (1Z8840027 here) is the trace number, and it should match the trace number on the remittance. The last value is the payer's tax ID with a leading 1, which helps when the company name on the deposit isn't the plan you expected.

A few things that commonly get in the way:

• The bank hides the addenda. Many banks show only the company name and amount on statements and in online banking. Ask your bank for the full ACH addenda (sometimes called the CCD+ addenda or reassociation data) on healthcare deposits. Some business banking portals have a setting for it; others will send a separate report.
• The name isn't the plan. Many plans pay through a payment vendor, so the deposit shows the vendor's name rather than the insurer's. The trace number and amount still match the remittance.
• The dates differ. A remittance and its deposit don't arrive on the same day. Payers that follow the industry's operating rules release the 835 and the EFT within three business days of each other, so allow a window of about a week when matching by date.

From claim to bank: a sample timeline

It helps to see where reconciliation fits in the life of a single payment. Here's a typical electronic payment for a claim sent on a Monday. Turnaround varies by payer, but the order of events doesn't.

1. Day 0 Mon, Oct 6

   Claim sent

   The office submits the claim to the payer through its clearinghouse.

   About two weeks

2. Day 14 Mon, Oct 20

   EOP released

   The payer adjudicates the claim and publishes the EOP and 835.

   Don't post yet

3. Day 15 Tue, Oct 21

   Pending at the bank

   The ACH credit shows in online banking as a pending transaction, usually without its trace number.

   Don't post yet

4. Day 17 Thu, Oct 23

   Deposit clears

   The deposit posts with its trace number. Match it to the EOP and mark it reconciled.

   Ready to post

5. Day 17 Thu, Oct 23

   Post the payment

   Enter the payment in your practice management system, dated to match the deposit.

The gap that matters is between the EOP and the cleared deposit. Once the payer releases the EOP it's tempting to post right away, and many offices do. But the EOP only says a payment is on its way. A pending transaction is closer, but a pending ACH credit can still be returned, and most banks don't show its trace number until it settles. Waiting the extra two or three days means every payment you post in Dentrix, Eaglesoft, Open Dental, or whatever system you use is one you've already matched at the bank, and the posting date lands in the same period as the deposit.

Reconciling deposits, step by step

Pick a period, usually a week, and work through it in one sitting.

1. Pull the insurance deposits for the period

   Export the bank statement or filter online banking to credits. Separate insurance deposits from patient card settlements and other income. HCCLAIMPMT in the description and known payer or vendor names make this quick.

2. Match each deposit to a remittance by trace number

   For electronic deposits, look up the trace number from the bank description among your remittances. For check deposits, use the deposit slip to break the bank line into individual checks, then match each check number.

3. Confirm the amount

   The deposit should equal the remittance's payment total, not necessarily the sum of the claim payments on it. If they differ, find the reason before moving on (see when the amounts don't match).

4. Match by amount and date when there's no trace number

   For deposits without addenda, look for a remittance from the same payer with the same total, dated within about a week. If two remittances from one payer have the same amount, don't guess; get the trace number from the payer's portal or your bank.

5. Confirm the remittance was posted

   Check that the batch in your practice management system exists, carries the same trace number, and totals the same amount. A deposit matched to a remittance that was never posted means patient balances are still wrong.

6. Mark it reconciled and list what's left

   Note on the payment (or in your tracking sheet) that it cleared the bank and the date. Everything that didn't match goes on the exceptions list with a dated note.

When the amounts don't match

When a deposit and its remittance disagree, the cause is usually one of these:

Recoupments deserve the most care. The payer is taking money back for a claim that may have been posted months ago, so the fix touches two patients: the one on the current remittance, who was paid in full, and the one whose earlier payment is being reversed. For how adjustment codes decide who owes what, see our guide to dental claim adjustment codes.

Working the exceptions list

Whatever doesn't match falls into one of two groups, and each has a different next step.

Deposits with no remittance

• Search the payer's portal or your clearinghouse for a remittance with the trace number or amount.
• If the deposit came through a payment vendor, check the vendor's portal; some send remittances there instead of to the plan's portal.
• If you can't find it in a few days, call the payer with the trace number and deposit date and ask for a copy.
• Until it's found, track the deposit as unapplied. Don't post it to a patient as a guess.

Remittances with no deposit

• Give it the matching window first; an ACH can trail its 835 by a few days, and a mailed check by longer.
• If the remittance says the payment was a check, confirm it wasn't received and set aside undeposited.
• If it was a virtual card, check whether anyone processed the card number.
• If none of those explain it, contact the payer with the trace number. A check may need to be reissued, or the EFT may have gone to an old bank account.

Give every exception an owner and a date. An unapplied deposit with no name on it is easy to leave for next month, and next month it's harder to trace.

A weekly and month-end routine

Reconciling weekly keeps the exceptions list short enough to work. A routine that holds up:

• Weekly: match the week's insurance deposits, confirm each matched remittance was posted, and work the exceptions list.
• Month-end: compare the month's total insurance deposits at the bank with the insurance payments in your practice management system's deposit report. The difference should equal the open exceptions, and nothing else.
• Post with the right date. If your system lets you, date insurance payments so they land in the same period as the bank deposit. That keeps the month-end comparison clean.

Multi-location groups often receive every location's insurance payments into one bank account. Match deposits at the group level, then check that each payment was posted to the right office's ledger. The group can balance while one location is over and another is short.

Common questions

How do I match an insurance deposit to its EOB?

Use the trace number. For a check it's the check number; for an ACH payment it's the EFT trace number on the remittance, which also appears in the deposit's bank description when your bank shows the ACH addenda. Then confirm the deposit amount equals the remittance's payment total.

What does HCCLAIMPMT mean on my bank statement?

HCCLAIMPMT is the standard ACH company entry description for a healthcare claim payment. It marks the deposit as an insurance payment, and the attached addenda record carries the trace number that matches the payer's 835 or EOB.

Why is my insurance deposit less than the EOB total?

The most common reasons are an overpayment recovery (the payer took back money from an earlier claim, shown as a PLB WO adjustment in the 835), a virtual credit card processing fee, or several remittances being matched to the wrong deposit. Check the provider-level adjustments at the end of the remittance first.

How often should a dental office reconcile insurance deposits?

Weekly works well for most offices, with a month-end check that total insurance deposits at the bank match the insurance payments in your practice management system. Waiting a month makes missing remittances and short payments much harder to trace. If you use a tool like RevCanvas, it can reconcile automatically every day.

What should I do with a deposit that has no EOB?

Keep it as an unapplied deposit and don't post it to a patient as a guess. Search the payer's portal and any payment vendor's portal by trace number or amount, and if you can't find the remittance within a few days, ask the payer for a copy.

Related guides

• Dental insurance payment posting, start to finish