Blue Cross Health Insurance

Medical Billing- Health Insurer Claim Workflow

It's important for medical billers to know the typical health insurance workflow after a claim is received by their processing team.

Prior to that, however, it's worth taking a moment to discuss the main advantage of electronic versus manual claim submission for health insurers. According to a 2006 survey published by the AMA, the average cost of processing a clean claim electronically is .90. The average cost of processing a paper claim is .63. Obviously, health insurers prefer electronic claim submissions.

Once the claim is submitted, a seven step process is generally followed by most health insurers:

Claim Receipt- During the intake process, the claim is processed by sorting, extracting and checking all of the relevant patient and physician information including treatment and diagnosis.

Eligibility Determination-Based on the patient's health benefit plan, the system matches whether or not the patient is eligible for the services rendered.

Pricing Edits- The physician charges submitted will be reduced to the individually contracted maximum allowable payment. These edits can be in effect pricing rules, AMA CPT codes or CMS payment rules.

Health Insurer Claim Edit Application- The health insurer determines payment eligibility for specific codes. The most common edits are (Source is the National Healthcare Exchange Services):

- Procedure is not allowed
- Procedure is not allowed with another procedure
- Modifier code and place of service conflict
- Procedure is only allowed with one or more other procedure codes
- Global services package

Final Claim Payment is Determined- Referred to as the pre-adjudication process, this is the step where the level at which the claim will be paid is decided.

Claims are adjudicated for each line not for the total claim.

Explanation of Benefits/Remittance Advice (EOB/RA)- An EOB/RA will be sent that details the allowed and paid amounts , CPT codes, physician and patient information including the amount the patient is responsible for paying.

Payment Sent- This can come with the EOB/RA or be electronically deposited in your account.

A 2007 National Health Exchange Study of over 1.7 million claims suggested that 90 to 96 percent of clean claims are accepted by health insurers when first submitted. The percentage broke down as follows:

Aetna- 90.7 percent
Anthem Blue Cross and Blue Shield- 93.7
Blue Cross of California- 91.6
Blue Cross of Pennsylvania- 94.3
Blue Cross Blue Shield of Florida- 91.1
Blue Cross Blue Shield of Texas- 96.3
Blue Shield of California- 93.0
Cigna- 95.0
Humana- 96.4
Medicare- 93.4
United Healthcare- 96.7

The top six reasons health insurers deny claims are:

- Service not covered- 50 percent
- Patient not eligible for benefits 25
- Information missing from claim 9
- Authorization not obtained 5
- Misrouted claim (wrong health insurer) 4
- Lack of documentation 3

The study revealed another interesting finding. The data suggests that an average of 78 percent of claims are paid accurately on the first EOB/RA. That means that 22% are not. The study also indicated appealing a payment costs between and .

So, the two actions medical billers must take are to get the claim right for the first submission and be prepared to appeal inaccurate payments.

About the Author:
Ronald McLaughlin
625 N. Michigan Ave.
Chicago, IL 60611

Read revenue management information at our website which is


No comments:

Post a Comment