800 792 1826
Knowledge Center

Medical Claim Reimbursement

 Medical claim reimbursement is the process of getting reimbursement of medical expenses incurred by the claimant (patient) in getting medical treatment. The process involves a number of formalities. In case of any error the claimant may be required to re-submit the claim with the health care providers or the insurance company. The claimant may also be denied from medical claim reimbursement in case of failure eligibility and procedural failures.

Medical claim reimbursement is initiated by an interaction between a health care provider and the insurance company (called payer). The interaction begins with the office visit: a doctor or their staff will typically create or update the patient's medical record. Upon the first visit, the provider will usually give the patient one or more diagnoses in order to better coordinate and streamline their care. In the absence of a definitive diagnosis, the reason for the visit will be cited for the purpose of claims filing.

The medical claim reimbursement is a tedious process involving determination of the correct level of service. The level of service, once determined by qualified staff is translated into a standardized five digit procedure code drawn from the Current procedural terminology database. The verbal diagnosis is also translated into a numerical code, drawn from a similar standardized ICD-9-CM database. These two codes, a CPT and an ICD-9-CM, are equally important for claims processing.

Once the procedure and diagnosis codes are determined, the medical biller transmits the claim to the insurance company (payer). This is usually done electronically by formatting the claim as an ANSI 837 file and using Electronic Data Interchange to submit the claim file to the payer directly or via a clearinghouse. The insurance company (payer) processes the claims usually by medical claims examiners or medical claims adjusters. If the claim is approved the medical claim reimbursement takes place. Approved claims are reimbursed for a certain percentage of the billed services. These rates are pre-negotiated between the health care provider and the insurance company.

Failed claims are rejected and notice is sent to provider. Most commonly, rejected claims are returned to providers in the form of explanation of benefits (EOB) or remittance advice. Upon receiving the rejection message the provider must decipher the message, reconcile it with the original claim, make required corrections and resubmit the claim. This exchange of claims and rejections may be repeated multiple times until a medical claim reimbursement is paid in full, or the provider relents and accepts an incomplete reimbursement.

The frequency of rejections, denials, and over payments is high (often reaching 50%), mainly because of high complexity of medical claim reimbursement and/or errors due to similarities in diagnosis' and their corresponding codes. In order to reduce or control procedural errors a practice that has interactions with the patient must now under HIPAA send most billing claims for services via electronic means. It also provides that before actually performing service and billing a patient, the care provider may use software to check the eligibility of the patient for the intended services with the patient's insurance company.

Typical Medical Billing Process:

Claimat TM: Claimat is an integrated healthcare connectivity application providing cost effective, self-sufficient and direct connectivity products and services for the healthcare industry. Claimat is an easy to use claims submission and management system. The application is also equipped with electronic medical records (EMR) system, which provides for effortless sharing of personal medical records across different healthcare providers and individuals.