> ## Documentation Index
> Fetch the complete documentation index at: https://www.practiceownersguide.com/llms.txt
> Use this file to discover all available pages before exploring further.

# How your practice gets paid

> The machine most of your revenue arrives through — claim, adjudication, remittance, money, and reconciliation — and where the leaks are.

Most of your revenue arrives through a machine few owners have seen the inside of. This page opens it.

## The five stages

```mermaid theme={null}
flowchart LR
    A[Visit] --> B["Claim (837)<br/>via clearinghouse"]
    B --> C[Payer<br/>adjudication]
    C --> D["Remittance<br/>835/ERA or paper EOB"]
    C --> E["Money<br/>ACH, check, or virtual card"]
    D --> F[Posting +<br/>reconciliation]
    E --> F
```

**1. The claim.** Your PM system generates an X12 837 with diagnosis and procedure codes, routed to the payer through a clearinghouse that checks formatting first.

**2. Adjudication.** The payer pays, reduces, denies, or pends each line. Days to weeks.

**3. The remittance.** The payer's explanation of what it decided. Electronic: an [835/ERA](/concepts/what-is-an-835). Paper: an [EOB](/concepts/era-vs-eob). Every reduction carries a [CARC/RARC code](/concepts/carc-rarc-denial-codes) saying why.

**4. The money.** Sent separately: ACH deposit (EFT), paper check, or a virtual credit card that quietly costs 2 to 3% in fees unless you demand ACH instead (your right under 45 C.F.R. § 162.1602). Money and remittance travel different routes; rejoining them is [reassociation](/concepts/eft-reassociation).

**5. Posting and reconciliation.** Payments and adjustments get posted against open claims, and someone confirms the money the payer *said* it sent actually landed. That confirmation is [reconciliation](/concepts/reconciliation), the step most practices skip.

## Where the leaks are

* **Unworked denials.** A denial is a code, not a verdict. Many are correctable, but only if someone reads them.
* **Virtual card fees.** Negotiable to zero by switching that payer to ACH.
* **Unposted paper.** Checks and EOBs from small payers pile up and break the link between claims and cash. This is what [lockboxes](/concepts/lockboxes) fix.
* **Stale enrollments.** After any bank change, every payer must be re-enrolled. The missed ones keep paying the old account. See [switching banks](/guides/switch-banks).

## The monthly truth test

Your financial reality lives in two documents: remittances (what payers say they paid) and the bank statement (what arrived). If month-end ties them together, your revenue is real. If not, you're estimating.

<Note>
  **Lemma aside:** Lemma is a bank account that reads remittances natively. It parses 835s and EOBs, matches them to deposits, and flags what doesn't tie out.
</Note>

## Next

<Card title="Setting up your practice's banking" icon="arrow-right" href="/start-here/03-setting-up-your-banking">
  The account structure that determines whether your books are easy or miserable.
</Card>