For both electronic and manual submissions, the claims process generally follows similar steps. Claims processes vary by payer, but the following general outline describes how the system is supposed to work.
- Claim submission. A psychologist submits a claim either electronically or manually to a health plan. Electronic claims are translated or converted into a standard format, while paper claims are scanned or typed into the computer system. If you submit a claim to an intermediary such as a billing service or clearinghouse, the intermediary typically processes the claim and submits it to the payer.
- Claims adjudication. After the claim data is entered into the company’s computer system, it goes through a process called “claims adjudication.” The company checks the validity of the claim by comparing it against the coverage and benefit requirements of the health plan. The claim is checked for all of the information necessary to activate payment.
- Notification of adjudication. An explanation, or “remittance advice,” is typically sent to the practice describing the outcome of the adjudication process. In addition, an “explanation of benefits” is typically sent to the practice and the insured client outlining the services performed and how the payments have been settled.
If the claim is approved, the company forwards payment to the practice. If the practice uses an intermediary such as a billing service, the health plan may remit payment to the billing service, which will in turn forward the payment to the practice. A claim may be approved but only partially paid; in that case, the payer should provide an explanation.
If the claim is put on hold, the practice may be asked to resubmit the claim with additional information.
If the claim is denied, the practice or intermediary may file an appeal.
- Tracking and payment. The time that elapses between submitting a claim and receiving payment can vary. Generally, electronic claims take much less time to process than paper claims. One of the benefits of using a billing service or clearinghouse is that these intermediaries may track claims until they are paid, helping to identify and resolve problems in a timely manner. Practices who don’t use an intermediary can check on the status of claims by calling the company or checking the company’s website.