Everything About Claim Submission Process In Medical Billing

Touseef Riaz

July 25, 2022

medical claims vs hospital claims

One of the key steps in the medical billing process is insurance claim submission. In simple words, the claim submission process involves the healthcare provider submitting the claim to the insurance payer for reimbursements. The healthcare provider’s reimbursements depend on the proper submission of the insurance claim. Based on the medical claim being submitted, the insurance carrier decides if, what, or how much amount will be covered for the procedure rendered. As mentioned, it is an essential step in medical billing, meaning it requires time to be done correctly. Therefore, the insurance claim must be error-free, according to the payer’s requirements, and submitted within the timeline. If done correctly, the claim processes fast, and the healthcare provider receives the payments in time as well. Failing to do so may result in claim denials, rejections, late payments, or lost revenues.

claim submission process in medical billing

An overview of Medical Claim

One of the major data sources for any healthcare organization is a medical claim. But is a medical claim a bill?

The medical claim contains all the information regarding a billable patient’s visit, from diagnosis to procedures performed. Insurance medical claim is submitted to the insurance payer by the provider for reimbursements. This medical claim also contains codes for diagnosis and treatment provided to the patient in their visit. These codes cover or describe the service, including:

  • Medical services
  • Medical procedures
  • Medical supplies
  • Medical devices
  • Medical transportation
  • Pharmaceuticals

Medical Claim Vs. Hospital Claim

Note that medical claims and hospital claims are two different kinds of claims. Medical claims are the insurance claims submitted by a doctor, whereas hospital claims are submitted by a clinic or facility.  

Claim Submission

When we talk about the medical billing process, the claim submission process begins after the medical coding and claim preparation. Today, medical claims are submitted electronically via Electronic Data Transfer (EDI). To ensure proper claim submission, the following are the three steps to be followed:

  • The relevant information in the claim form is checked by the electronic health record (EHR) software. It checks whether required fields are filled along with their codes or not in the claim form.
  • Patient information like name, date of birth (DOB), policy coding errors, name of the policy, etc., are verified by a third-party vendor.

Lastly, the insurance payer also verifies the information of the patient present on the claim along with:

  • Policy
  • Coding errors
  • Or whether the requirements have been fulfilled.

In case any discrepancies are found in the medical claim, the insurance payer can deny or reject the claim. Properly following the Medicare claim submission process helps in preventing claim denials or rejections. 

What information is included in a medical claim?

A medical claim displays information specific to the patient and their encounter with the physician. The medical claim file is divided into two parts; a claim header and claim detail.

Claim header

A claim header comprises a summary of the necessary information. It contains:

  • NPI – National Provider Identifier (for the attending medical healthcare provider and service facility.
  • The primary diagnosis codes
  • DRG – Diagnosis Related Group
  • Name of the insurance company (the payer) of the patient
  • The complete charge for the claim being made
  • If applicable, an in-patient procedure

A claim header also contains the patient’s confidential information, including:

  • Date of birth (DOB)
  • Gender
  • Zip code

Claim detail:

Claim detail part of a medical claim comprises secondary diagnosis and procedure/services information. It includes:

  • Date of service
  • Procedure code
  • Corresponding diagnosis code
  • National Drug Code (NDC), if applicable
  • Attending physician’s NPI number, and
  • Charge for the service

What is an electronic claim in medical billing?

As the name suggests, an electronic claim is entirely digital, i.e., it doesn’t involve any paper or printing. Medical billing software comprising a healthcare practice management system can typically create the claim. Submitting a clean claim is a necessity for proper medical billing and reimbursements. A clean claim is a medical claim with correct and valid information, accurate codes, and submitted in time.

Guidelines for submitting a clean claim:

If your clean claim rate is below 95%, it means your healthcare practice is losing revenues moreover increasing expenses due to rejected claims. Note that the first submission is what determines the percentage of clean claim rate. To run a profitable healthcare practice, keeping the clean claim rate higher is essential. 

Tips for achieving a 95% clean claim rate:

Now the question arises, how to achieve a 95% of clean claim submissions rate? Following are some strategies and tips to improve the clean claim rate and, therefore, the revenue cycle of your healthcare practice.

1. Maintain the updated information of the patient:

A medical claim contains all the information regarding a patient’s visit to the healthcare provider, from the patient’s personal, medical and insurance information to the provider’s and the insurance carrier’s information. Now obviously, this information can change. Incorrect or invalid patient information in the medical claim can result in claim denials or rejections. For this reason, keeping the patient information updated is extremely important. Confirm and verify the information before the patient’s visit and to avoid any delays, use precise documentation. Correct documentation plays a crucial role in proper medical billing.

2. Prior authorization of the eligibility before the date of service:

There are two forms of patients for a healthcare provider, i.e., 1) established and 2) new patients. Now one of the major sources of lesser clean claims or higher claim denials is outdated insurance information. Hospital or management staff often assumes that the insurance information of established patients hasn’t gone through any recent changes. This is the reason why to reach the 95% of clean claim rate percentage; one should always check primary, secondary and tertiary insurance information. This should be confirmed and verified at least 5 days before the procedure or service day. Along with that, prior verification of eligibility, patients’ copayments, out-of-the-network benefits, and deductibles should be confirmed.

3. Documentation of the patient must be detailed and organized:

Detailed documentation is another way to ensure a higher clean claim rate. Proper patient documentation includes the details of procedures or services performed, medical history, case history, or any other information required.

Proper documentation is also very important in the medical billing process as billers have to translate the information in the documentation into codes. Incorrect documentation leads to the use of incorrect codes and therefore results in claim denials and rejections. Patient documents can also be kept as a supplemental record to use when the need arises.

4. Keep up with insurance payer’s guidelines and timelines:

Preparing and submitting a medical insurance claim in time is a hassle itself, and above all, there are specific guidelines for every insurance payer. Insurance payer’s coding guidelines may include the compatibility between ICD & CPT, electronic or paper-based medical claims, etc. Not following the guidelines and requirements of the insurance payer(s) can result in claim denials and rejections.

To have a higher clean claim ratio, the healthcare provider must fulfill all the requirements and keep an eye on the claim submission deadlines. In case there is any discrepancy in the patient coverage, resolve the issue before the claim submission to avoid any denials. To be safe, healthcare providers may aim to verify at least five days before the day of service.

5. Ensure error-free claims, i.e., use of correct codes and modifiers:

Errors in medical coding can be any human error, use of incorrect, outdated, or deleted code, or mix-up of numbers or alphabets. These errors result in the medical claim being denied or rejected, therefore, a lesser clean claim rate. To keep up with the high percentage of a clean claim rate, submitting error-free claims in the first go is necessary.

Not just the codes, using the correct modifier is also essential for an error-free claim submission. Note that modifiers are not supposed to change the meaning of code; they just provide additional information regarding the code (procedure or service performed). For this reason, double-check or verify the modifier used in the medical claim. To use the correct modifier, keep up with the official guidelines provided. Along with using the correct modifier, accurate modifier usage is also essential for submitting a clean claim.

Medical billing process:

Till now, the importance of the medical billing process for healthcare practice is quite clear. The revenues and reimbursements for the services provided by the provider or physician depend on proper medical billing. The entire medical billing process comprises ten steps in total. These steps include:

  1. Patient registration
  2. Confirming the financial responsibility
  3. Meeting with the physician (a.k.a., the encounter)
  4. Medical transcription
  5. Medical coding
  6. Preparing the medical claim
  7. Claim submission
  8. Monitoring adjudication
  9. Generating patient statements
  10. Follow-up and denial management

Several healthcare practices choose to outsource their billing process to medical billing outsourcing services companies. Now choosing the right medical billing company for your practice is a crucial part. There are ways to find the best medical billing company for your practice. But before starting the process of choosing one, understanding the kind of medical billing company you are looking for is important. These types are, for instance,

  • Small-scale billing company
  • Professional medical billing
  • Physician practice management company

Factors to consider in a potential medical billing company:

They include:

  • The medical billing outsourcing services company must be HIPAA Compliant.
  • Experience of the company matters – choose a company with a good experience and reputation in the healthcare industry.
  • Security of patients’ information is crucial and a major concern for any healthcare practice, which is the reason why discretion, privacy, and transparency (between provider & billing company) are important. UControl Billing offers 100% discretion, confidentiality, and privacy when it comes to your patients.

Why choose UControl Billing?

UControl Billing is a well-reputed medical billing outsourcing services company with skilled and highly professional medical billers on board. A team dedicated to making your healthcare practice profitable and grow. We offer:

  • Competitive pricing
  • Maximized revenues and reimbursements
  • The lesser risk of errors
  • Billing 24 hours
  • Timely follow-ups
  • Uninterrupted service
  • Reducing your overall expenses
  • A team of highly skilled professionals
  • Enhancing your efficiency
  • Streamlines workflow and cash flow
  • Improved quality

All of this, so you have to worry less about reimbursements and administrative tasks and focus more on providing quality patient care. UControl Billing is like your remote business office; we are always ready to answer any of your queries and concerns. 

Frequently Asked Questions (FAQs)

What is the process of claim processing?

This process involves the insurance payer checking the claim for required information, its accuracy, and validation. Once done, the insurance payer(s) may decide on approving, denying, or rejecting the claim. 

What is the first step in processing a medical claim?

The claim processing begins with the submission of a medical claim by the healthcare provider. This claim consists of all the necessary information required by the insurance payer.

What are the steps in the medical billing process?

The medical billing process comprises several steps (back-end and front-end). These steps include:

  • Patient registration
  • Confirming the financial responsibility
  • Meeting with the physician (a.k.a., the encounter)
  • Medical transcription
  • Medical coding
  • Preparing the medical claim
  • Claim submission
  • Monitoring adjudication
  • Generating patient statements
  • Follow-up and denial management

What are the two types of claim submission?

There are two different types of methods for submitting a medical claim. It involves an electronic method or the old-fashioned way, i.e., paper claims. The two most common claim forms are CMS-1500 and UB-04. 

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