Everything You Need to Know About Medical Claims Adjudication

Medical billing is a grind. It requires time, effort, and a crazy eye for detail. Then there is claims adjudication. It is a total nightmare for most healthcare providers. Why is that? You will get the answer in this guide. So keep reading.

After you submit a claim to the insurance company, they review it and pay you. Seems SIMPLE, right? That remark about the procedure is technically accurate. But it is NOT A PIECE OF CAKE. Every seasoned medical biller will tell you the truth. Each of the three processes we just outlined is complex. The details in each step are what count.

All received claims go through the same process. It is ‘claims adjudication.’ This happens regardless of the reason behind the denial.

Your healthcare facility does not have complete control over the process. However, there are workflows you can use immediately. It increases your chances of receiving payment.

This guide is your ticket. Pass that pending claims adjudication process. It’s keeping you awake at night. So without further ado, let’s get started!

What Is Medical Claims Adjudication?

An insurance payer company uses a process. It is called claims adjudication. This process is drawn-out and intricate. They utilize it to calculate the payment. They need to reimburse a healthcare provider. This is for rendered care services.

The payer checks the claim. They look for accuracy and completeness. They ensure the patient’s personal information is accurate. No important details should be missing. Next, they examine for medical codes. They use CPT and HCPCS codes. Medical examiners occasionally review claims. They ensure services are legitimate and required.

After assessing the claim, they make choices. There are three options:

• Deny the claim.
• Reduce the amount paid out.
• Pay the claim in full.

In case of rejection, the provider can file an appeal. You resubmit the claim for evaluation after fixing mistakes. This causes a delay. It increases the claim processing time.

Medical Claims Adjudication Process

Workflows are used in this process. They determine the eligibility of a claim. Typically, it begins at the physician’s office. It concludes with the insurer’s decision.

Initial Processing: The first step is a processing review. The medical provider submits claims to the insurance company. After receiving it, the payer verifies details. They check name, status, and diagnosis.

Validation: The insurance company examines coverage and policies. They check the coverage date. They look at covered ailments. They check if the submission was prompt. The payer might use software for this. Sometimes they do a manual review instead.

Decision: The insurance company chooses a path. They pay, decrease, or deny the claim. They continue with payments. Or they give a reason for the denial.

Payment Processing: Finally, the provider completes the payment. They use the method specified by the client. It includes a summary of financial obligations. It shows the adjudication date. It lists approved coverage.

The insurance company optimizes this. They implement efficient workflows. It leads to better claims management.

Why Your Claims Get Dumped

Dealing with a denial is the worst. It is the most annoying status a provider sees during adjudication.

Remember the intro? Insurance companies deny 1 in 3 claims on average. Dealing with payers is a massive challenge for healthcare shops. That’s why we mentioned that figure earlier.

A claim goes back to the sender with a “denied” status if it fails any checks. It’s a total fail. Companies reject claims for many reasons. Some are simple. Others are super intricate.

Mistakes in the Paperwork: Payors find misspellings or wrong numbers. Coding problems lead to an initial refusal. Once you fix these errors, you can resubmit the claim.

The Pre-Approval Wall: Sometimes insurers tell you upfront they won’t cover a service. This is a “prior authorization denial.” The good news is you can appeal this. You can try to get it lifted.

Is It Actually Needed: Insurers only pay for necessary services. They want to treat sickness or keep a patient healthy. This is a medical necessity. Patients must prove the procedure is required. It has to improve their life or health.

Double Trouble: Duplicate filings happen a lot. It’s a common reason for denials. Usually, this happens from system glitches or human error. Insurers either toss the new application or swap it for the one with better data.

Speeding Up the Payday

Filing “clean” claims is essential. The financial stakes are huge. Your data must be perfect. This means the right codes, patient info, and dates.

Here are five ways to cut the admin load. Let’s make this process fast.

Buy Into the Machines: Automation saves massive time and cash. It speeds things up for everyone. Payers use data to kill paperwork. Software helps doctors avoid double entries. It tracks policy changes. It assigns the right jobs to the right people.

Check Your Work Early: Payers cross-check your data with their own rules. You have to stay updated on coding laws. Use tools for front-end edits. Payers use software for auto-checks, so you should too. If it fails the first bot, it gets stuck in a manual queue. That delay is a killer.

Tighten Up the Data: Wrong patient info causes rejections. If a discharge name is slightly off, they dump it. Electronic records with a Universal Patient Identifier (UPI) fix this. It’s way better than manual systems. Staff can see claim status in real-time. You won’t miss a beat on denials.

Talk to the Patients: Patients need to help out here. They must provide accurate info on time. Most people want to register online anyway. Every digital touchpoint is a chance to verify data. Collaboration is a total game changer for the workflow.

Make It Standard: Uniformity is king. Standardizing the process removes the guesswork. It reduces errors. It speeds up the whole cycle. This improves your cash flow. It helps your business actually grow.

Tech to the Rescue

Adjudication software helps payers. They use it to check for medical necessity. It tracks coverage and contracts. It also automates the boring stuff. Think benefits, enrollments, and premium invoicing. It just makes things move.

The Bottom Line

Nothing is simple with insurance payers. This includes adjudication. It is one of the most exhausting parts of the revenue cycle. You have almost no control over the final answer.

But don’t panic. Use the strategies in this guide. You can proactively avoid those bad outcomes. Fix the mistakes before you hit send. Your bank account will thank you.