Health Insurance Claims Process

Health Insurance

The medical billing insurance claims process starts when a healthcare provider treats a patient and sends a bill of services provided to a designated payer, which is usually a health insurance company. The payer then evaluates the claim based on a number of factors, determining which, if any, services it will reimburse.

Let’s briefly review the steps of the medical billing procedure leading up to the transmission of an insurance claim. When a patient receives services from a licensed provider, these services are recorded and assigned appropriate codes by the medical coder. ICD codes are used for diagnoses, while CPT codes are used for various treatments. The summary of services, communicated through these code sets, make

Medical billing specialists typically use software to record patient data, prepare claims, and submit them to the appropriate party, but there isn’t a universal software application that all healthcare providers and insurance companies use. Even so, insurance claims software use a set of standards, mandated as by the HIPAA Transactions and Code Set Rule (TCS). Adopted in 2003, the TCS is defined by the Accredited Standards Committee (ACS X12), which is a body tasked with standardizing electronic information exchanges in the healthcare industry.

There are two different methods used to deliver insurance claims to the payer: manually (on paper) and electronically. The majority of healthcare providers and insurance companies prefer electronic claim systems. They are faster, more accurate, and are cheaper to process (electronic systems save around $3 per claim). But because paper claims have not yet been completely removed from the insurance claims process, it is important for the medical biller and coder to be well versed with both electronic and hardcopy claims.

Filing Electronic

The clearinghouse is a third-party operation that primarily acts as a middleman between healthcare providers and insurance carriers.

Think of the clearinghouse as a central hub, or a single location where all claims are sent to be sorted and directed onward to all the various insurance carriers. Typically, clearinghouses use internal software to receive claims from healthcare providers, scrub them for errors, format them correctly in accordance with HIPAA and insurance standards, and send them to the appropriate parties. Clearinghouses generally keep medical practices in the loop during this process by providing reports on the status of claims.

This third party is necessary because healthcare providers typically have to send high quantities of insurance claims each day to a variety of different insurance providers. Each of these insurance providers may have their own submission standards. If a medical practice’s billing staff was solely responsible for transmitting insurance claims under both insurance and HIPAA requirements, the potential for error would increase dramatically, not to mention the time required for formatting each claim to specific insurance