Claim Submission Process in Medical Billing: Guide
Medical billing supports the critical task for healthcare providers of getting paid for the services performed. However, making claims and processing them is rarely an easy task, as one small mistake in the information of one's insurance, coding, or clerical error, and it can result in claims being denied or delayed plus more clerical work.
It is therefore essential for healthcare providers, medical billers and practice managers to understand the claim submission process in medical billing.
A smooth workflow reduces the likelihood of errors and claims rejections, thus cutting down on administrative hassle and speeding up revenue cycle management. This guide provides an overview of the claim submission process, the common issues during the billing cycle and how to streamline claim submission.
Clean Claim Submission Process in Medical Billing
Medical claim submission is the process of submitting a healthcare claim or invoice to a payor (insurance company) for processing and reimbursement. The claim includes the patient’s and provider’s data, diagnosis, procedure, and charge information, which is reviewed and approved by the payer based on the patient’s benefits and the provider’s contract terms.
The claim submission this process involves several steps, including the billing team’s verification of the claim, checking the insurance and coverage details, pre-authorization and/or referrals, patient eligibility, and claims submission and tracking.
How To Submit a Medical Claim: Step-by-Step
1. Verify Patient Insurance and Eligibility
The first step in the claim submission process is verifying the patient’s insurance information and eligibility. Billing staff reviews the patient’s insurance eligibility and benefits. In addition, the team usually checks whether the procedure needs pre-authorization or a specialist’s referral.
For instance, the claim details may not be found in the practice management system due to an expired insurance ID number or an incorrectly chosen insurance plan. By verifying patient eligibility, a medical provider can ensure that few or no claims are denied due to invalid information or lack of insurance coverage.
2. Review Medical Documentation
The next step to the submission of a claim is the review of the patient’s documentation and records according to proper medical billing guidelines. The documentation serves as the source of information on diagnoses, procedures performed, and services delivered and determines what claim items are billable.
In case of missing documentation, unclear information, or absence of records, claims risk being denied or delayed, and the biller may ask the billing team to clarify before moving on.
The documentation is essential to the process since insurance companies may audit the records to ensure that the CPT codes billed by medical practices correspond to the services rendered.
3. Complete Medical Coding and Charges
Medical billing coders apply the appropriate diagnosis and procedure codes in accordance with the documentation as part of the claim submission process. Coders may assign ICD-10-CM diagnosis codes, CPT, and HCPCS procedure codes based on the services rendered and check the applicable modifiers and units.
Inaccurate coding leads to improper or denied reimbursement, delayed claim processing, or other administrative challenges. For example, coders may use CPT codes that are not supported by the documentation during the claim submission, resulting in claim denial by payers.
Accurate coding is essential to ensure appropriate reimbursement during the claim submission process.
4. Check and Scrub the Claim
Before submitting the claim to the insurance company, the biller reviews and checks the claim to ensure that there are no missing or incomplete claims. This method is commonly known as claim scrubbing, a process where the biller and coders review the claim against industry standards and remove errors, such as missing or invalid codes or patient or provider information, before submitting the claim to the insurer.
Correcting errors before they become problematic during the claim submission process is necessary, although most billing software can perform claim scrubbing automatically. Experienced medical billers still need to review the claims submission process and verify that everything matches the supporting documents.
5. Submit a Claim Electronically
Following the claim scrubbing process, the biller submits an electronic claim to the insurance payers for approval. Most medical claims in the United States are electronically submitted, where claims submission software routes the claim to a clearinghouse, an independent billing entity that checks claims for accuracy and compliance and then forwards them to the appropriate payers. The standard format for electronic professional healthcare claims submission is the X12 837 transaction.
The claims submission process may not be complete once the biller has submitted the claim electronically since the insurance company still needs to accept the claim for processing. Therefore, the biller needs to follow up to ensure that the claim has passed all submission checks.
6. Follow-Up on Claim Rejections
After the electronic claim’s submission, the biller follows up on the claims submission status and responds to any rejections or errors identified by the insurance company. If a claim is rejected (e.g., because of missing information), the biller needs to check if the insurance company requires any changes to resubmit the claim. When a claim is rejected, the billing team makes the necessary corrections and resubmits the claim within the specified timeframe to avoid further delays.
Following up on claim rejections is important for a smooth claims submission process and eliminating avoidable administrative errors.
7. Follow Up on Insurance Processing and Payments
After a successful claim’s submission, the insurance company reviews the claim in accordance with the coverage terms and contracts, approves the claim, denies it partially or fully, or requests additional information.
The billing team reviews the claim and the explanation of benefits or electronic remittance advice to understand the payer's decision. The practice then posts the payment to the patient's account and follows up if any other balance is due.
8. Follow-Up on Claim Denials and Unpaid Balances
Insurance companies may deny the claim during the claim’s submission process for various reasons, ranging from coverage issues to incomplete documentation. The biller reviews the claim denial reason and updates the claim, submits an appeal to the insurance company, or takes other corrective action as needed during the claim’s submission process. The follow-up on denied claims is critical to ensure claims are not delayed when they should be approved.
The claim submission process requires timely follow-ups on unpaid balances to ensure that the healthcare practice is reimbursed for the services rendered and that the practice does not miss any deadlines for filing or appealing denied claims.
Common Issues in the Medical Claim Submission Process
Healthcare providers can encounter several claim submission issues during the billing cycle, even when having an established billing process. These issues include
• Incorrect patient insurance data
• Ineligible or inactive insurance coverage
• Missing pre-authorization or referrals
• Ineligible or incorrect diagnosis or procedure codes
• Incomplete documentation
• Duplicate claim submission
• Missing provider enrollment details
• Lack of compliance with a specific payer's requirements
• Late follow-ups on the rejected or denied claims
These problems can add to the administrative complexity and result in additional expenses for medical practices. Understanding the causes of these errors is essential to managing the claims submission process more efficiently and reducing recurring mistakes that may lead to denied claims.
How to Streamline the Claim Submission Process in Medical Billing
There are several ways to optimize the claim submission process in medical billing, including
Verifying patients' insurance information: Healthcare practices can avoid errors during the claim submission by verifying insurance eligibility and benefits, pre-authorizations, and other requirements before rendering services.
Improving coding accuracy: Accurate medical coding ensures that providers are paid for services rendered and reduces claim rejections, denials, and delays during the claim’s submission process.
Using the claim scrubbing software: Claim scrubbing allows the medical biller to review the claim to ensure that there are no obvious errors before claim submission to the insurance company.
Monitoring the claim submission performance:
Monitoring the submission process helps the practice identify opportunities for improvement, such as the number of first-pass rejections and denied claims, reasons for claim rejections, and the number of accounts receivable days in the practice's billing cycle.
Following up on unpaid claims:
A robust follow-up on denied, rejected, and unpaid claims is essential to ensure that the practice is reimbursed for the services rendered and avoids additional administrative challenges.
Automating repetitive billing and follow-up tasks: Medical billing automation is an essential element of a streamlined claims submission process. By automating tasks, such as claim submission, practices eliminate manual clerical tasks and ensure that claims are routed to the appropriate payers. However, human intervention may be necessary for specific complex tasks.
How Can Medical Billing Services Improve the Claim Submission Process?
The claims submission process requires time, human resources, billing and practice management software, and follow-up with insurance companies. For many practices, it can be an added administrative challenge that causes additional stress for the practice's billing team. Outsourcing the claim submission and management process to professional third parties can help reduce the administrative burden for the practice.
Medical billing services can assist healthcare practices with verifying patient eligibility, claim submission and follow-up, claim rejections and denial management, payment posting, and accounts receivable follow-up. All State RCM offers medical billing services and services to improve the healthcare revenue cycle to help practices streamline their billing and follow-up processes with payers.
Our services focus on ensuring claims are properly submitted, followed up on, and reviewing recurring issues that may impact the practice's revenue cycle. Learn more about our medical billing services and denial management services
FAQs
What is the claim submission process in medical billing?
The claim submission process includes verifying patient eligibility, reviewing the documentation, completing the medical coding, claim scrubbing, submitting a claim to the insurance payer, and following up on the claim submission status.
What is a rejected claim, and what is a denied claim?
A rejected claim fails initial submission requirements (e.g., claim scrubbing) and requires corrections before resubmission. A denied claim is reviewed by the insurance company but is not approved for payment in whole or in part, and the next steps depend on the reason for the denial and the claim submission terms with the payor.
How can healthcare providers reduce medical claim denials?
Healthcare providers can reduce claim denials and claim submission errors by verifying the patient's eligibility, pre-authorizations, and referrals, reviewing the patient's documentation and records thoroughly, and completing the coding accurately. Practices should also monitor the claims submission and follow up on the payer's response.
Why is electronic claims submission essential?
Electronic claims submission allows practices to digitally submit claims to the insurers. The claims submission software typically routes the electronic claims to a clearinghouse, an independent billing entity that the submitted claims and forwards them to the appropriate payers.
How can medical billing services improve the claim submission process?
Medical billing services help practices with claim submission, following up on the submission status, claim rejections, denied claims, payment posting, and accounts receivable follow-up. An efficient billing process reduces errors in the submission of claims and ensures that the practice is aware of the reasons for rejections and denied claims.
Conclusion
The claim submission process in medical billing is one of those critical elements that underpin the healthcare revenue cycle. From checking insurance details to creating and sending electronic claims and following up on denied billing, each step is of great importance. The billing process can have a tremendous impact on a practice’s revenue. Therefore, any organization that wants to improve its billing cycle must ensure it has the appropriate clean claim submission, coding, follow-ups, and denial management in place. With the right professional support and strategies in place, you can ensure fewer billing errors occur and devote more time and energy to patient care.
All State RCM offers medical billing and administrative services to help healthcare practices with claim submission and denial management and other revenue cycle needs.
