The Cycle of a Typical Insurance Claim

Education & Learning

Have you ever wondered why after you have had a doctor’s appointment, a hospital stay, or medical emergency how it is processed through the provider to the insurance carrier and finally paid? Have you ever wondered after you get your Explanation of Benefits (EOB) from the insurance carrier, in some cases 12 months later, what was covered really and what was not covered?

These all have to do with Medical coding and billing, and the cycle that it goes through from start to finish to get it completed and resolved! We wish to explore the life cycle of a typical insurance claim. We say typical here, so as to not confuse you with the exceptions, or difficult or disputed claims. We will assume that it is a standard typical insurance claim going through it beginning cycle to payment closing.

Refer to the resources footnoted for reference, and you will see that this cycle has a lot of moving parts, with many entities and providers. It is the coder’s responsibility to make sure that each and every procedure is properly coded for billing.

Medical claims go through a multitude of processesi that can cause the claim to be denied or paid. Let’s look at the steps from this graphicii

The Cycle of a Typical Insurance Claim

As you can see from the above diagram, the claim starts with patient pre-screen and registration. The provider will determine who is responsible financially, the patient, insurance carrier or both. Patient check-in and check-out means that the particular service or procedure was completed!

Now it is the medical coders job to make sure that the proper codes were applied for each and every service and procedure performed for the patient. Review billing errors and then submitted to carrier. The claim then goes through adjudication, patients statements are generated.

Then follow-up statements are generated. Follow-up payments are then monitored after the EOB from the carrier is generated and then it is determined the balance if any that the patient needs to pay.

As one would observe, it is paramount that the medical billing and coding be accurate in coding the correct codes to the correct procedures. Learning this professional and marketable skill is extremely important and creates a position in demand. We encourage you to take a serious look at learning this skill if you desire to work in this industry. Please go to Medical Coding and Billing for more details.