Questions and Answers
What is claims adjudication?
The detailed work by the payer that involves rendering a decision or making a judgment on claims.
How many steps are there in the adjudication process?
5 Steps
What occurs in Step 1 of the adjudication process?
Comparison of patient information and demographics on the claim with those on the policy.
What is checked in Step 2 of the adjudication process?
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What is the purpose of the common data file in Step 3?
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What happens in Step 4 of the adjudication process?
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What is concluded in Step 5 of the adjudication process?
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Medical claims are judged or evaluated subjectively.
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Study Notes
Claims Adjudication Overview
- Claims adjudication involves the payer's process of rendering decisions on medical claims.
- The process is objective, adhering to strict protocols, rather than subjective judgments.
Steps of the Adjudication Process
- There are five steps involved in the claims adjudication process.
Step 1: Verification of Information
- The process starts with comparing patient information and demographics from the claim with the policy details.
- Correct identification and eligibility for benefits must be confirmed; discrepancies result in claim rejection.
Step 2: Code and Authorization Check
- Diagnosis and procedure codes on the claim are verified against a list of covered codes for the policy.
- Procedures must correspond to diagnosis codes and be medically necessary; authorization requirements must be met.
- Claims can be rejected if there are uncovered codes, if procedures are unnecessary, or if authorization is lacking.
Step 3: Duplicate Claim Review
- A review of the common data file checks for duplicate claims and assesses the relationship to any recently performed procedures.
Step 4: Allowed Charges Assessment
- Payers determine allowed charges for each service based on policy stipulations.
- Evaluation includes checking if the deductible has been met and calculating any applicable coinsurance.
Step 5: Payment Determination and Notification
- Completion of the adjudication process involves making payment determinations regarding obligations for both third-party payers and policyholders.
- Medical providers and policyholders are subsequently informed of the payment decisions.
Key Highlight
- Medical claims evaluation is governed by strict guidelines, ensuring objectivity; however, differences in opinion may arise between payers and physicians regarding payment outcomes.
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