Medical Claim Processing Cycle: Explanation and Tips for Improvement

Touseef Riaz

March 9, 2021

Medical Billing Services

You probably know that medical claims processing starts when a healthcare provider, such as a hospital, has submitted a medical claim request to the insurer. Did you know that sometimes, medical billers submit claim requests directly? In contrast, sometimes, they do it via a clearinghouse. It is worth noting that there are several steps that a piece of patient data has to go through to get the medical bill to the payer.  

Many practices still use outdated processes, such as paper medical records. There are, however, ways to ensure accuracy and reliability while also improving the medical claim process cycle. There is no doubt that the medical claims process cycle is the foundation for any healthcare provider.

You may know that the medical claim process cycle can be cluttered with many complex nuances, leaving plenty of room for billing errors and mistakes at both the clinical level as well as the billing level. Did you know that mistakes and errors can delay payment unnecessarily? This can add months to a medical claim’s life cycle, and you don’t want that. This is why understanding and identifying claim mistakes and errors early in the process is important to decreasing errors and increasing collections.

Did you know that the issues can start as soon as a patient calls in order to schedule a medical appointment? It is important that your medical staff verify insurance, confirm the coinsurance or copay, and review whether there is an open balance to settle. 

Medical Billing Process Explained

We can define the medical billing process as the communication process between the medical provider and the insurance provider. This is also known as the medical billing process cycle. Did you know that the billing cycle may take up to several months to complete? It is worth noting that the medical billing process starts when a patient visits the medical care provider.

The staff at the medical office updates the patient’s health record and summarizes the diagnosis, treatment, and any other relevant information. Note that from the patient’s record, and evaluation of medical care is determined. After that, a 5-digit procedure code is assigned. You should know that the next step in the billing process is the transmission of these codes to the pertinent insurance provider.  Did you know that in most cases, professionals do this electronically with an ANSI 837 file? After that, providers process the claim.

It is worth noting that medical claims adjusters usually process these claims. However, note that when higher amounts are involved sometimes, medical directors will evaluate the validity of the medical claim. After approval of the claim, the physician receives the reimbursement. On the other hand, you will receive rejected claims, usually in the form of Electronic Remittance Advice or Explanation of Benefits (EOB).

Improving Your Medical Claim Processing Cycle

Here are some tips to improve your medical claim process cycle.

Use a Comprehensive Checklist to Ensure Adequate Patient Registration

You will be glad to know that the start of the medical claim cycle presents many opportunities for the financial growth of your medical practice. It is worth noting that eligibility and medical claim status have an electronic utilization of about 40%.

This means that as a healthcare provider, you have a big opportunity to lower the 20% of medical claims that providers reject because of bad eligibility and other reasons. One of the best practices that you must implement in admission and eligibility is a comprehensive registration checklist for every patient encounter.

Note that the individual registering the patient must photocopy their insurance card. They should also review the insurance and verify all patient information, such as contact information and identity, at registration.

Consolidate Workflows

You probably know the different steps a medical claim goes through in order to reach its destination. There is no doubt that processing medical claims can be lengthy and arduous if things are not well-organized. Within your medical office, a medical claim should be restricted to how many hand-offs take place.

While HIPAA has many regulations and rules that dictate how medical claims should be processed electronically, note that still some manual processes are involved. If a claim goes through more hands, the risk for error increases. This is where outsourcing can help you.

Use Ongoing Reviews during the Claims Scrubs Process 

It is no secret that there are several key reasons for medical claims denials. Also, note that according to several studies, payers deny medical claims for many reasons. Some of these reasons are patient ineligibility, missing supplemental attachments, incomplete plan or patient information, incomplete service information, and duplicate claims.  

The good news is that you can fix all these mistakes relatively easily with some better management and oversight of claims submission. It is important to look at a payment when it comes back and determine whether it is partial or zero pay. If a provider has denied several medical claims because they are missing medical information, you should go back to your medical records department and figure out why they have been denied.

Outsource Claims Management Services

There is no doubt that hiring an external agency to take care of all your medical claims management services will be highly beneficial for your practice. You should know that when you outsource claims management to a third party, they will usually have more tools and resources to use the data more efficiently and effectively than you may do in-house.

And that is not all; outsourcing claims management will free up space and time for other tasks within your medical facility. Also, it can save you money while helping you avoid issues, such as turnover and training. Did you know that outsourced teams may also take the pain and hassle out of the negotiation processes?

Request Payers to Send Remittances Electronically 

Did you know that around 46% of claim remittances are sent electronically? Also, note that just 10% of payments are sent electronically. You can improve your medical claim process cycle by receiving electronic payments. Also, an online medical billing system and low-touch or no-touch payment systems can help you maintain a steady revenue stream.

Automate Medical Claims Processing

You should know that medical claims processing automation now falls into the broad arena of BPA (business process automation). The best thing is that with BPA, businesses, such as medical practices, rely on technology in order to automate repetitive, regimented, and redundant daily processing tasks. It is no secret that the automated process helps speed up the way work is done. This is possible by distributing data to the most suitable person in the claim processing chain, relying on several user-defined actions as well as rules.

You may know that nothing slows your medical practice down faster than repetitive and tedious activity. The productivity of your medical billing will improve considerably when you take several time-eating tasks, such as individual claims filing, coding updates, payment reminders, and more, and convert them into an efficient automated process. If you automate many of your small billing tasks, your staff will be able to refocus their energy and time on important revenue-impacting solutions.

There is no doubt that the medical claims process is multi-faceted and, in many cases, quite complex. The best thing about medical claims process automation is that it can revolutionize how everybody receives the appropriate medical services and payment for these services in full and in a timely manner.

Here are some additional benefits and advantages to investing in claims processing automation for your medical practice:

  • Helps your healthcare organization achieve goals by enhancing patient service excellence
  • Lowers overall costs while increasing efficiencies at every stage in the claim process for all parties
  • Executes tasks more effectively and faster through technological solutions
  • Decreases the level of human involvement in many mundane tasks, like the monitoring of services
  • Lowers the need for reconciliation intervention by various stakeholders
  • Allows your organization to focus more on core tasks that need specialized and clinical expertise and experience
  • Provides you with a detailed and clear claim entry process, which allows for more control over the process
  • Eliminates manual tasks, hard copy filing, paper-based transactions, and phone interactions

Categorize Payers

If you have an organized and streamlined structure for your billing schedule, then your practice can optimize medical billing productivity as well as secure more timely payments that will improve your bottom line. Keep in mind that this structure should have the ability to differentiate easily between which payers allow for medical billing at different times of the month.

Final Thoughts

Now more than ever, healthcare providers should adopt solutions that can help them operate more effectively and efficiently. You should know that electronic medical claims have already improved the operational efficiency of many medical practices in the country. You should take make the most of this capability by incorporating our tips throughout all phases of your medical billing process.

If you need help, you can contact UControlBilling for more information on how the company can help you make your medical billing process as simple and efficient as possible so that your practice can thrive. 

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