Process of claim preparation in medical billing cycle

  • Written by Yash Rajan
  • Monday 5th September 2022
Process of claim preparation in medical billing cycle VLMS Healthcare

The US has the highest per capita health expenditure when compared with any other country. The healthcare system in the US is wholly based on health insurance. The US has both private as well as public health insurance services. According to the United States Census Bureau, in 2020, the population with health insurance was around 91%. Out of this, almost 67% of the population had private insurance, and 33% had public insurance. For any healthcare professional to get paid for their services, it is essential to file an insurance claim. The insurance provider then reviews the claim. On a successful insurance claim, the healthcare provider gets paid the complete reimbursements for their services. In contrast, an improper insurance claim results in the denial of that claim, i.e., loss of revenue. Hence, it is vital to file a precise claim without any errors. The US uses an electronic filing process, filling the health insurance digitally using medical billing software. The software allows keeping track of every service which is provided to the patient. Keeping track of everything helps later make a charge an entry for an insurance claim. Although electronic billing has reduced the stress on healthcare workers, making mistakes in filing an insurance claim is still very easy. Hence, a healthcare worker must know the how-tos of insurance and the errors they should avoid.

The process of claim filing starts with verifying the patient’s eligibility and benefits. A patient’s eligibility and benefits verification inform the healthcare worker about whether the respective medical service is covered under their health insurance or not. The healthcare professional should verify this before 48 hours of appointment with the patient. Once the patient is cleared in benefits verification, the healthcare professional should gather their personal and insurance details for documentation.

Correct entry of patients and their insurance information avoids documentation errors. Once the diagnostics and therapeutic services are provided to the patient, the following process is handled by the medical coder. The medical coder assigns the respective code to the services offered to the patients. These codes are necessary to identify the service during the medical billing cycle.

After the medical coding is done, a charge entry is made as a part of an insurance claim. The charge entry consists of the charges assigned to the respective medical service and the general charge sheet of the healthcare organization. Charge entry contains various information such as medical codes for the services provided, medical supplies used during the treatment, patient details and insurance authorization, etc.

On preparing a charge entry, it is then checked for accuracy. The medical codes used for the services are scanned for correctness to see whether the proposed service is billable. This process is also called scrubbing. When the claim is passed through the scrubbing process., it is then submitted to the portal of the health insurance provider.

Once the submission is completed, the health insurance provider reviews the claim and sends an Electronic Remittance Advice to the healthcare organization. It contains information about the claim approval or rejection, the amount reimbursed, and the demand for additional information if needed. Upon a claim denial, the ERA provides the reason for denial. It is then the resp[onsibilty of the healthcare provider to appeal the denial.

Upon successful claim filing, the patient is billed for the services not covered under their medical insurance. The billing process is done through the patient statement. The reimbursed amount is managed through the accounts receivable or A//R. A/R keeps the report of pending transactions from the patient and the payer. Successful management of A/R and complete claim preparation and filling process avoids the loss of revenue.