How Does the Healthcare Claims Process Work?

Anyone who isn’t actively involved in healthcare, on any level, probably doesn’t understand just how much goes into the healthcare claims process. Actually, it’s more than just sending out a bill every time a patient is seen and then following up on it to make sure it is paid. The claims process is all about what is known in the industry as the “3 Ps” which refers to “patients, providers and payers.” Healthcare claims begin with the 3 Ps and hopefully, if all goes well, it ends there too.

A Break in the Process

Unfortunately, there are times when the claims process doesn’t go as planned and then the billing department has to track down a specific issue and see to such things as overpayment recovery initiated by the payer. Even so, in order to get a better understanding of the healthcare claims process, a general summary of routine tasks should help. Oddly, the claims process starts even before the patient is seen! 

A Word about Medical Coding and Claims

When a patient calls his or her provider to set up an appointment, the person taking the call typically will ask the reason for the visit. That reason is assigned a services / billing code in the computer and so when the patient comes into the office or medical facility, that code explains why that patient is there. Rather than writing a lengthy summary of what the patient said when making the appointment, a short code will tell the provider, at a glance, why the patient is there. It is this code that is carried through to medical billing, either as is or with an amendment based on what services were provided, and it is here that the claim is filed if the patient is not a self-pay.

A Quick Rundown on the Claims Process

Once you understand that a medical claim is sent off to a payer, typically and insurance company (private or government i.e. Medicare), you then know that the doctor or medical providergave a service which needs to be paid. That service is categorized by a billing code which the payer then verifies in terms of what is being billed against allowable amounts. If everything is correct, the payer cuts a check to the provider and everyone is happy. Well, almost! There are times when the patient paid the provider and the payer needs to reimburse the patient. 

When Something Goes Wrong

Sound confusing? It could be more than a bit confusing keeping the payer, provider and patient all in their own little boxes. Then, as mentioned above, there are times when either a wrong code was entered and not caught or that the provider charged too much for the service and the payer doesn’t catch it before paying too much. It is this type of situation that can get a bit time consuming and frustrating, tracking down what was paid in terms of what should have been paid. Sometimes this leads to an audit which, in turn, can create a great deal of panic on the part of the billing department. No one likes to have their integrity questioned and especially over an honest mistake. 

In the end, the claims process should be clear cut as it is well defined, but human error and intentional fraud are always possible so overpayment recovery begins a new chapter in the life of a claim.