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Ethical AI in Healthcare: Balancing Innovation & Compliance
Learn how Claimocity uses ethical AI in healthcare with HIPAA compliance, coding rationale, and improved accuracy to protect patient data.
According to recent reporting by the HFMA, initial inpatient claim denial rates have reached nearly 12%, and 85% to 90% of these are avoidable. This represents a huge loss of revenue and time. The solution is a process that verifies accurate claim information before submission, often called claim scrubbing.
Claim submission in medical billing is the process of sending healthcare claims to insurance payers for reimbursement after services are provided. Claim submission affects every aspect of the back-end revenue cycle, including reimbursement speed, denial rates, cash flow, compliance, and patient financial experiences. Even minor mistakes made during registration, coding, or documentation can lead to claim rejections, denials, and delayed payments.
Effective claim submission can be a fairly complex process. In this article, we’ll go through the claim submission process, common mistakes, and best practices for improving your organization’s clean claim rates.
The formal process of sending a healthcare provider’s request to an insurance payer after services are rendered is called claim submission. Simple, right? It may not be as straightforward as you’d think.
Medical claims contain detailed information, some of which can be difficult to accurately determine. A bill contains patient demographics, insurance information, diagnosis codes, procedure codes, provider information, and supporting documentation. The goal is to submit a claim that demonstrates medical necessity and meets payer requirements so reimbursement will occur. This is known as a clean claim. Claims may be submitted electronically through clearinghouses or directly to payers. Electronic submission is now the industry standard.
You can think of claim submission as the bridge between clinical care and reimbursement. The more bills that make it across the bridge, the better off you’ll be.
There are several advantages to getting your bills right the first time (clean claims):
Inaccurate claims, on the other hand, can cause trouble in both the short- and long-term:
The root causes of claim denials often happen upstream of actual billing due to errors made during registration, eligibility verification, authorization, and coding. The best way to avoid claim denials is to submit clean claims that contain no errors or reasons for the payer to deny or delay payment. In fact, many organizations use the clean claim rate as a key revenue cycle performance indicator. Click here to learn more about the KPIs that are most commonly tracked.
First, it’s important to understand the claim submission process, step by step.
First, you’ll collect basic patient demographic information: name, date of birth, address, phone number, and insurance information. You’ll verify that patient records match payer records to prevent eligibility and identity-related denials. If the coverage belongs to a spouse or parent, you’ll need to confirm subscriber information. Errors are commonly committed during patient registration, and they can cause problems downstream during the RCM process.
During the insurance verification stage, you’ll confirm that the patient’s coverage is active, then verify benefits, copays, deductibles, coinsurance, and network status. This is the time to determine whether the planned service requires a referral or prior authorization, and to confirm that all required authorizations are obtained and documented before claim submission. You’ll update coverage information at every visit, just in case the patient’s policy has changed or expired. Eligibility issues remain a leading cause of claim denials, so it’s particularly crucial to be accurate during this step.
Coding is the step where your team will assign diagnosis and procedure codes that accurately reflect the services that were performed. It’s important to make sure that coding is supported by proper documentation, and that modifiers are applied correctly when required. Coding policies may differ from payer to payer. You should review the payer-specific requirements, because reimbursement and compliance are directly affected by coding accuracy. Click here to learn more about strategies to improve coding accuracy.
To generate the claim, you’ll compile all the information from the first 3 steps: patient, provider, coding, and charge information. Then you’ll verify that all of the information is complete before submission. When it’s required by payer policies, you’ll need to attach supporting documentation. Once you’ve confirmed that the rendering provider and the billing provider information is accurate, you should be ready to submit the claim.
Claims are normally submitted electronically through a clearinghouse or directly to the payer. This is where the benefits of claim scrubbing become apparent. It’s a pre-submission review process that identifies missing data, coding conflicts, modifier issues, and payer rule violations. Automated claim validation helps reduce preventable errors before claims reach the payer.
Payers don’t miss a thing. They evaluate eligibility, coverage, coding, medical necessity, authorization status, and policy compliance. Additional information requests may also occur during payer review. Not only do payer rules vary from company to company, but they can also vary between plans within the same organization.
Payer adjudication is the review process that payers use to evaluate submitted claims. It determines the validity of the claim and calculates exactly how much the payer, provider, and patient are financially responsible for.
There are four possible outcomes:
Payment details are communicated through remittance advice and EOB documentation. It’s important to address denials and underpayments as quickly as possible.
There are many different errors that can trigger a denial, and they can occur during almost any step of the RCM process:
These front-end errors often occur before coding or billing begins. They are some of the most easily prevented causes of claim denial.
Even when coding is correct, insufficient documentation or authorization can stop or delay reimbursement.
Many of these issues are preventable through front-end accuracy checks and claim scrubbing technology. To learn more about denial management in RCM, check out our post here.
There is an art to improving your clean claim rate. Here is a list of steps that are crucial for optimizing this critical KPI.
Finally, leverage reporting and analytics tools to continuously improve claim performance. This isn’t a process that you can simply optimize and leave. Claims performance must be monitored continually and errors must be tracked. Significant revenue loss isn’t normally caused by one or two large, expensive errors. More often, it’s a pattern of small mistakes that can only be detected by carefully monitoring your analytics tools.
Click here to learn more about how to streamline denial management with AI.
Claim submission is one of the most important processes within the revenue cycle. Denial prevention is quicker and much less expensive than denial correction, and accurate registration, verification, coding, documentation, and claim scrubbing contribute to faster reimbursement and fewer denials. Even if you think your organization is on top of your RCM, it’s important to evaluate your claim submission workflows. There’s a very good chance that you’ll identify opportunities for automation and process improvement. Claimocity combines powerful revenue cycle technology with an experienced RCM team to help healthcare organizations improve claim accuracy, reduce denials, and streamline reimbursement.
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