You submit a claim, and it is approved.
No, this is not easy; there is a lot happening behind the scenes.
After the submission of a claim, there is a process of reviewing claims known as claim adjudication in medical billing. Each claim has to go through this detailed process by insurance companies. Keep reading to understand the claim adjudication process and see how it works. Also, get to know about its types in medical billing.
What is Claims Adjudication?
Before jumping into the details and the types, let’s discuss the claim adjudication meaning. It is the process of insurance providers reviewing claims. Moreover, the company closely looks at the accuracy of a claim. They make sure that CPT codes are used accurately and that all the information is correct.
The billing staff must use correct codes and information to avoid claim denials and face delays. However, if the claim is denied, the healthcare provider has to resubmit it after resolving issues, and this process sometimes turns out frustrating.
Additionally, there are three possible outcomes of the claim adjudication. The first type is when the providers get full payment, which is the ideal outcome of the claim. Next, the provider gets a partial amount, insurance provider cuts off the unnecessary payments and reduces the reimbursement payment. Lastly, we have rejected or denied claims. This happens due to the errors in claims.
Types of Claims Adjudication in Medical Billing
After we submit the claim, it goes through the process. This determines how the payment will be given and whether the insurance companies will accept the claim or not. Understanding the three main types of adjudication in medical billing helps prepare accurate claims to avoid denials.
Approved Claim:
It happens when the claim is accepted, and payers give full payment to the providers. It happens if the claim is error-free, complete and all the information is correct.
Denied Claim:
This is the most annoying act of insurance companies. However, it happens due to the carelessness of the billing staff. Insurance companies usually deny claims because of incorrect information. The other reasons for adjudicated claims denial are missing information, adding services that don’t come under insurance policies, or the claims not fulfilling the pre-authorization protocols.
Partially Paid Claims:
In this case, the insurance companies agree to pay but not the full amount. There are several reasons for payment adjustments, such as the patient’s co-insurance amount and service exceeding the limit or more.
Claim Adjudication Process in Healthcare
When a patient gets services, the doctor prepares a bill for the services that he gave to the patient. These services might be just an examination, surgery major/minor, medications, or consultation.
The bill includes the personal information of a patient and the services that are provided, procedural codes, and more. After submitting the claim, here comes the claims adjudication. The process in which claims are being reviewed closely, and then payers determine how much they will pay.
Moreover, if there is an error in the claim, the payment gets delayed and might end in claim denial. So, it is important to prepare and double-check the claims properly.
Role of Adjudication in Medical Billing
Adjudication is the most important step in medical billing. Adjudicated claims determine how much should be paid to the provider or whether the claims should be accepted or rejected.
Well, it all depends on the accuracy of claims, the correct information matters, accurate use of CPT codes, and the other information that is required to prepare a perfect medical claim. Besides this, the medical billing payment and claim adjudication are linked. If there is a delay in the claim reviewing process, the providers will face a delay in payments, and hence, the whole revenue cycle of medical billing is affected.
This is why it is important to carefully check the claims before submitting them to the insurance companies and follow all regulatory rules. For instance, if the provider fills in the wrong patient information or in the correct procedural code, it affects the claim. The payers will reject, which causes a delay in payment.
Conclusion
All in all, claim adjudication is a critical process, and it must be accurate. If there is a slight mistake in the claim, the company might delay the payments and reject the claim. So, it is the responsibility of the provider to have an accurate knowledge of all these things.
The provider must know how and when to use CPT codes correctly to avoid claim denials. Moreover, to avoid claim rejections, each patient’s information must be entered correctly and double-checked.
Since it’s the most important step of medical billing, it must be done by professionals. At DWP Medical, we have expert and highly trained staff that take care of billing procedures. So, if you want to improve your revenue cycle, contact us. We guarantee that the insurance company will accept your claim and won’t delay reimbursements.
Our staff make sure that each claim is prepared carefully and accurately. Moreover, we submit claims on time to avoid claim rejections. So, to increase your Hospital RCM and minimize your claim denial rate, get our services today!