What does undistributed payment mean in patient medical billing?

Undistributed payment in patient medical billing refers to funds received by a healthcare provider that have not yet been allocated to specific patient accounts or services. This can occur when payments are made in bulk or when there is uncertainty about how to apply the payment, such as when multiple patients have outstanding balances. As a result, it can lead to delays in account reconciliation and may affect a patient's billing statements or outstanding balances until the payments are properly distributed.