The process of paying or denying claims submitted after comparing them to the coverage or benefit requirements in the insurance industry is known as claims adjudication. The medical claims adjudication process involves a series of steps: an insured person submitting the claim, the insurance company receiving it, and then manually processing the claim or using software to make a decision.
The claim process will be referred to as auto-adjudication if it’s automatically done using software from automation service providers like Smart Data Solutions. Some claims are still submitted on paper and manually processed by insurance workers, though. However, there’s no denying that automating claims not only improves efficiency but also reduces expenses, usually required for manual adjudication.
Do you ever wonder what exactly happens to your medical insurance claim once it finally leaves the office of your doctor? You’ll learn everything you need to know about it here.
Submitting a Claim
The claim is submitted to the insurance company typically by your provider or doctor. It holds especially if they’re part of your plan. However, when you visit a physician outside your plan, you may have to submit it yourself. If you ever find yourself in this rare situation, below are some steps you can take to make sure that your claim actually gets processed smoothly.
- Check to see if you’re using the claim form specifically from your benefits plan
- Don’t miss essential information, especially the procedure codes, which you can obtain from the office of your doctor
- Make sure to write legibly if you’re going to fill the form out by hand
- Be prompt in filing the paperwork, making sure it doesn’t go beyond the time limit
- If needed, make sure to include pre-approval
- Verify your plan covers the treatment claim
Receiving The Claim
Once the claim reaches the insurance company, it will undergo a thorough review. The process can be divided into two phases: patient information review and validation of physician and NPI or National Provider Identifier designation. Learn more about them below.
- Review of Patient Information – Your claim will be placed in a “lineup” and finally starts through the process of medical claim adjudication. The software begins to review patient information, especially if the form is received electronically (which happens in most cases) by the insurance company.
A unique identification number gets assigned to the patient. It’s the first piece of information the software verifies, allowing the edits to recognize the different information associated with the patient’s assigned insurance plan.
If the name of the patient doesn’t match with the ID number, the medical claim adjudication may end prematurely at this step. These details must be associated with each other. If not, the physician will receive a rejection letter, either through electronic means or mail, explaining the reasons for the denial. The patient will also get a copy of the rejection letter.
Other information that the software edits will verify are the gender of the patient and date of birth. In each step, if a specific piece of information isn’t attached to the patient’s ID number, it may trigger rejection or stop notification.
The diagnosis code and the medical information represented by procedural codes are also vital pieces of claim information. The software will match the procedure with the medical reason or diagnosis code for the service provided.
The software then confirms whether or not the procedure actually is included in the patient’s insurance plan. The software can either deny the claim or send it for medical review at this point.
- Physician and National Provider Identifier (NPI) Validation – The software will continue to review the claim and validate the NPI designation and physician’s name. This is an essential step in determining the reimbursement amount. The edits in the software will verify whether the physician is out of network or has an existing contract with the insurance company.
The software will also review the co-pay and any other payments of the patient to determine if the portion of the payment the patient has to make has actually been made. The software also checks if the patient’s payments have been subtracted from the billed amount correctly.
Medical Review
As already mentioned, the software can send the claim to undergo medical review. A medical review desk will receive the claim electronically and will conduct the medical review process. An authorized nurse will review the claim’s information. The patient’s prior claims and health insurance policy will be checked to determine the appropriate procedure and medical necessity.
Once the medical review desk receives the claim, and the information is being reviewed, the claim will remain in development and suspension.
The nurse may involve doctors from the insurance staff when reviewing all documentation. Once the review is completed, the authorized nurse or doctor may approve or deny the claim based on criteria set by the insurance company and the medical staff.
Final Step
When a claim is approved, the patient will receive an EOB or Explanation of Benefits detailing how the medical care he received is being paid by the insurance plan.
Your doctor may also send a final bill for services to you around the same time. It’s best to compare the EOB with the final bill for rendered services. Make sure the details match before paying your doctor.