What Is Claim Submission in Medical Billing?
Have you ever wondered how doctors and hospitals get paid after providing medical services? That’s where the claim submission process comes in. When you visit a healthcare provider, whether for a routine check-up or an emergency, they don’t just send you a bill—most of the time, they submit a medical claim to your insurance company to request payment for the services rendered.
But what happens behind the scenes? How does a healthcare provider submitting a claim ensure it’s processed correctly? In this article, we’ll discuss the claim submission process, explore what a medical claim includes, and share essential tips to avoid errors.
The claim submission process in medical billing is the method through which healthcare providers request payment from a patient’s insurance provider for the medical services they have provided.
When a patient visits a doctor, hospital, or clinic, the healthcare provider generates a medical claim detailing the services rendered, including diagnoses, procedures, and medications. This claim form is then sent to the appropriate insurance company or government program for review and reimbursement.
The submission process in medical billing is critical to ensuring that healthcare providers receive proper reimbursement and that patients are charged accurately. The process involves multiple steps, including insurance verification, patient registration, medical coding, and submission through electronic or paper claims.
Medical claims play a vital role in keeping the healthcare system functioning efficiently. Without an accurate and efficient claim submission process, healthcare organizations could experience financial instability, leading to delays in patient care or even limiting access to healthcare services.
For example, you have health insurance for US expats and decide to visit a doctor for a routine check-up. In that case, the healthcare provider submitting the medical claim ensures that your insurance company covers the cost as per their patient’s coverage.
If errors occur in the claim submission process, such as incorrect patient demographics or incomplete documentation, the claim may be rejected, leaving the student responsible for paying out-of-pocket.
A medical claim includes all the essential details required for healthcare services to be reimbursed accurately. Here’s what a typical claim form contains:
Patient Information: This includes the patient’s full name, date of birth, address, and insurance details. Errors in personal information can lead to claim rejections.
Healthcare Provider Information: The name, address, and National Provider Identifier (NPI) of the healthcare provider submitting the claim.
Insurance Information: Details of the patient’s insurance provider, including the policy and group numbers.
Medical Services Provided: A detailed list of the services rendered, including examinations, treatments, and medications.
Medical Codes: Unique codes such as the International Classification of Diseases (ICD) for diagnoses and Current Procedural Terminology (CPT) for procedures performed. Accurate medical billing depends on using the latest coding guidelines.
National Drug Code (NDC): If any medications were prescribed, the claim includes the specific National Drug Code for billing.
Supporting Documentation: Medical reports, test results, and other documents proving the medical services' necessity.
Submitting a complete and error-free medical claim helps avoid claim denials and ensures a timely reimbursement process.
Medical claims can be submitted in two primary formats: digital (electronic claims) and hard copy (paper claims). Both methods serve the same purpose of getting healthcare providers reimbursed for services but differ in efficiency, processing time, and error rates.
Most healthcare providers now use electronic claims to streamline the medical billing process. These claims are submitted through specialized billing software that connects directly with insurance companies and government programs. The benefits of submitting electronic claims include:
Faster processing times, reducing reimbursement delays
Fewer errors thanks to automated data verification
Improved tracking, allowing providers to monitor claim status in real-time
Regulatory compliance, as electronic claims adhere to HIPAA and other industry standards
While electronic claims are preferred, some medical providers still submit paper claims, especially in smaller medical practices or rural areas with limited digital infrastructure.
Paper claims involve manually filling out a claim form, attaching supporting documentation, and mailing it to the insurance company. This method, however, has significant downsides, including:
Slower processing times due to postal delays
Higher risk of errors, leading to potential claim rejections
Increased administrative workload for staff handling physical paperwork
Despite these challenges, some healthcare organizations continue to use paper claims due to legacy systems or regulatory requirements.
Understanding the differences between these claim submission methods can help healthcare providers choose the most efficient approach for their practice.
Once a medical claim is submitted, it goes through several steps before reimbursement is approved. The claims process ensures that healthcare providers receive payment while insurance companies verify that the services billed align with the patient's insurance coverage.
Claim Submission: The healthcare provider submits the medical claim electronically or on paper to the insurance company or government payer.
Initial Review: The insurance company checks the claim for basic errors, such as missing patient details or incorrect policy numbers.
Claim Adjudication: The insurance company reviews the claim to determine:
If the medical services are covered under the patient’s insurance plan
If the claim follows the insurance provider’s billing guidelines
Whether the medical codes used are accurate
Approval, Denial, or Rejection: Based on the review, the claim is either:
Approved: The insurer pays the healthcare provider according to the policy
Denied: The claim is valid but not covered by insurance limitations
Rejected: The claim contains errors (such as missing documents) and needs resubmission
Payment Processing: If the claim is approved, the insurance provider pays the healthcare provider.
Explanation of Benefits (EOB) Sent: The patient receives an EOB statement explaining what was covered, what was denied, and whether any out-of-pocket costs are required.
A smooth claim process ensures faster reimbursement and reduces billing disputes between healthcare providers, insurance companies, and patients.
Both insurance companies and healthcare providers have specific responsibilities in the claims process to ensure accurate billing and reimbursement.
Review and validate submitted claims for accuracy.
Adjudicate claims based on policy coverage and medical necessity.
Process reimbursements to healthcare providers promptly.
Provide Explanation of Benefits (EOB) to patients detailing payments and denials.
Ensure compliance with healthcare regulations, such as HIPAA.
Submit accurate medical claims with the correct patient information and medical coding.
Verify insurance coverage before providing medical services.
Provide supporting documentation to justify treatments and procedures.
Track claim status and respond to requests for additional information from insurers.
Resubmit denied claims after correcting errors to ensure proper reimbursement.
By understanding these roles, insurance companies and healthcare providers can collaborate to improve claim approval rates and prevent unnecessary delays in medical billing.
Errors in medical billing can lead to claim denials, rejections, and payment delays. Even minor patient information, medical coding, or documentation mistakes can prevent a claim from being processed smoothly.
One of the most common reasons for claim rejection is incorrect patient information. Simple errors such as:
Misspelled patient names
Incorrect date of birth
Wrong insurance policy number
Mismatched insurance provider details
These mistakes can cause unnecessary claim delays. To avoid errors, healthcare providers must double-check patient demographics before submitting claims.
Medical codes are used to describe diagnoses, procedures, and treatments. If a healthcare provider enters:
Wrong ICD or CPT codes
Outdated or incorrect coding guidelines
Missing modifiers (which provide additional information about a procedure)
The insurance company may deny or reject the claim. Staying updated on the latest coding standards helps reduce coding errors and improves claim approval rates.
It may be delayed or denied if a claim lacks essential supporting documents. Common documentation mistakes include:
Missing medical reports or treatment records
Failure to submit referral authorization for specific procedures
Not providing proof of medical necessity
Before submitting a medical claim, healthcare providers should include all required documents. This helps streamline the approval process and minimizes billing disputes.
Avoiding these common mistakes ensures that claims are processed faster, helps healthcare providers receive timely payments, and prevents patients from being burdened with unexpected out-of-pocket costs.
Denied medical claims can lead to payment delays, increased administrative work, and frustration for healthcare providers and patients. To minimize claim denials, it is essential to follow best practices in medical billing and ensure that all submitted claims are accurate and complete.
One of the most frequent reasons for claim rejections is incorrect patient information. Even minor errors can cause insurance providers to reject a claim. Before submission, always verify:
The patient’s full legal name (as registered with the insurer)
The date of birth and policy number for accuracy
The correct insurance provider and policy coverage details
Double-checking demographic details prevents unnecessary delays and increases the likelihood of a claim approval.
Modifiers are essential in medical billing, providing additional details about a procedure or service. The claim may be denied or underpaid if there are missing or incorrectly used modifiers. Common modifier errors include:
Using the wrong modifier for a procedure
Omitting necessary modifiers that clarify the circumstances of treatment
Applying a modifier that does not match the diagnosis code
Regularly updating modifier knowledge and following coding guidelines can help avoid claim denials related to incorrect coding.
Certain medical procedures, treatments, or medications require pre-approval from the insurance provider before they are performed. Even if the service is medically necessary, the claim may be denied if prior authorization is not obtained.
To avoid this issue, healthcare providers should:
Check whether the procedure or medication requires prior authorization.
Submit all necessary medical documentation to the insurer.
Follow up with the insurance company to ensure approval before administering the service.
By securing prior authorization, providers can prevent unnecessary claim denials and ensure timely reimbursement.
Medical billing rules and insurance policies are frequently updated. Staying informed about coding changes, policy updates, and reimbursement rules is crucial to processing claims correctly.
Use the latest ICD, CPT, and HCPCS codes.
Stay updated on payer-specific billing guidelines.
Attend medical billing and coding training to remain compliant with industry standards.
Keeping up with billing updates helps prevent technical denials and ensures accurate claims submissions.
Performing a final quality check before submitting a medical claim can significantly reduce errors and increase approval rates. A proper review process should include:
Verifying patient details and insurance eligibility.
Checking medical codes for accuracy.
Confirming prior authorization when required.
Ensuring supporting documentation is attached if needed.
Using billing software or having a dedicated claims review team can improve accuracy and reduce denials. A well-structured review ensures that submitted claims are processed smoothly, resulting in faster reimbursements and fewer disputes.
Submitting medical claims correctly is about more than just avoiding claim denials. Proper claim submission ensures that healthcare providers receive the right payment for the services rendered, maintains trust between healthcare organizations and insurance companies, and helps avoid legal or financial penalties.
When claims are submitted accurately, healthcare providers receive the proper payment for their medical services. Inaccurate medical billing can lead to underpayments or payment rejections, whether due to coding errors or missing insurance details. This can disrupt cash flow and negatively impact a healthcare practice’s financial stability.
By ensuring that medical claims include the correct procedure codes, national drug codes, and service documentation, healthcare providers submitting claims can reduce delays in the payment process and improve revenue cycle management.
Insurance companies and government programs rely on accurate medical billing to process claims efficiently. Repeated errors or fraudulent claims can lead to losing trust between medical providers and insurance companies, making future claims processing more difficult.
Maintaining accurate, transparent billing practices ensures that healthcare providers remain in good standing with payers, reducing the risk of claims being subjected to extra scrutiny or audits. This also improves relationships with patients, as they won’t face unexpected billing disputes.
Improper medical billing can lead to legal penalties, fines, and even exclusion from insurance networks or government healthcare programs. Regulatory bodies, including the Health Insurance Portability and Accountability Act (HIPAA), require healthcare organizations to comply with strict billing and privacy standards.
Common issues that can result in penalties include:
Upcoding or unbundling of coded services (fraudulent billing practices).
Submitting duplicate claims.
Failing to secure patient authorization before billing.
To avoid these risks, administrative staff must follow the latest coding guidelines, ensure claims are submitted electronically whenever possible, and verify all supporting documentation before submission.
To optimize the claim submission process in medical billing, healthcare providers should follow key best practices that improve efficiency and compliance.
Despite the rise of electronic claims, some insurance companies and healthcare providers still process paper claims. When using hard-copy submissions, it’s crucial to:
Use the correct claim form, such as the CMS-1500, for professional services.
Ensure all personal details and patient demographics are legible.
Double-check procedure codes, national provider identifier (NPI), and insurance verification details.
Mail claims promptly to meet submission deadlines.
Although paper claims take longer to process, these steps can reduce claim rejections and improve accuracy.
Healthcare providers must adhere to industry regulations like HIPAA to maintain compliance and prevent fraudulent claims. This ensures that patient information is protected and that medical billing processes remain ethical and transparent.
Key compliance steps include:
Verifying insurance information before submitting a claim
Following the latest coding guidelines, including ICD and CPT codes
Ensuring all service documentation accurately reflects the services provided
Training administrative staff on healthcare billing laws and fraud prevention
The claim submission process in medical billing is a cornerstone of the healthcare industry's financial operations. It ensures that healthcare providers receive timely and accurate reimbursement for their medical services.
Navigating international healthcare and choosing the right insurance plan is just as important for international students as understanding the claims process. Visit WellAway today to discover comprehensive health insurance plans tailored to your needs.