3.2: Insurance Claims
- Page ID
- 137419
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)The Health Insurance Claims Process
The health insurance claim process ensures that healthcare providers receive payment for services rendered and that patients obtain the benefits covered by their insurance plans. This process begins when a patient receives medical care, and the provider documents the visit, including diagnoses and procedures performed. Medical coders then assign standardized codes (ICD-10, CPT, and HCPCS) to ensure accurate billing. Once coded, the claim is prepared and submitted—either electronically or manually—to the patient’s insurance company for review.
The insurance company then processes the claim by verifying patient eligibility, reviewing coverage details, and ensuring that any required prior authorization was obtained. If the claim is approved, the insurer pays its portion, and any remaining balance, such as co-pays or deductibles, becomes the patient’s responsibility. If the claim is denied due to missing information, incorrect coding, or lack of prior authorization, it must be corrected and resubmitted, which can lead to delays in payment and patient care.
Accuracy in the claim process is critical. Even minor spelling or grammatical errors in patient names, policy numbers, or service descriptions can cause mismatches in the system, leading to claim rejections. Proper documentation and coding are essential to avoid compliance issues, denials, and potential fraud allegations. Additionally, some services require prior authorization, meaning the provider must obtain approval from the insurance company before proceeding with treatment. This step ensures medical necessity, controls healthcare costs, and confirms adherence to insurance guidelines. If prior authorization is not secured when required, the claim may be denied, leaving the patient financially responsible or delaying necessary care.
A well-managed claim process supports the financial stability of healthcare facilities while ensuring that patients receive timely and appropriate medical treatment. By prioritizing accuracy, attention to detail, and adherence to insurance policies, healthcare professionals can help minimize errors, reduce claim denials, and streamline the reimbursement process.
How does the insurance claims process fit into the cycle?
Fig. 3.2 The Medical Billing Cycle: Pre-Register patients, Establish financial responsibility, Check in patients, Check out patients, Review coding compliance, Check billing compliance, Prepare and transmit claims, Monitor payor adjudication, Generate patient statement, Follow up payments & Collections.
Image Source: Denial Management in Medical Billing: The Ultimate Guide. JTS Health Partners. September 2022.
Sources
- State of Maryland. 2020. Understanding the Health Insurance Claim Process.
- Some content was originally written by me (Kaitlyn Junk). ChatGPT (OpenAI, 2024) was used to enhance clarity and professionalism through suggested edits. Final content was reviewed and approved by me.
- Denial Management in Medical Billing: The Ultimate Guide. JTS Health Partners. September 2022.