Health Insurance Claims Processing Issues

Insurance claims are processed in two ways: electronically or via a universal paper claim form. Regardless of which method is used, claims can be delayed or denied for several reasons. If you are aware of a few common billing errors, you might be able to avoid or resolve some issues with processing insurance claims.

History

A national universal claim form was approved by the American Medical Association in April 1975. This universal form allows for a standard format and quicker claims processing by insurance carriers. Before 1990, all claims were processed manually; however, as technology advanced, equipment was developed to optically scan and auto-adjudicate, or digitally process, universal claim forms.

Process

A paper insurance claim form is filled out and mailed or faxed to your insurance company. The insurance company then scans the document and converts it to an electronic format. Alternately, an electronic claim is submitted directly from your physician’s computer to your insurance carrier’s computer as a digital file. This is received in the necessary electronic format for processing. Regardless of how the form is submitted, the digital data ultimately is run through a software program designed to review the claim for all the required information, and the program either approves it or denies it.

Human Error

Human error can cause the processing software to reject an otherwise appropriate claim. For example, if you hurt your finger playing baseball and go to the emergency room, your claim should have a diagnosis code for a finger injury. However, if the claim is submitted with a diagnosis code for a finger injury and a procedure code for a chest X-ray (instead of the code for a finger X-ray), the system won't process the claim because a chest X-ray is not an appropriate procedure for an injured finger.

Other Issues

Each insurance carrier allows a specific amount of time after your date of service for a provider to submit a claim, and claims submitted outside this time frame are denied. Claims also can be denied when the specific information required is missing, recorded incorrectly or illegible. This information can include the patient's name, member identification number, date of birth, diagnosis code, procedure codes, date of service, place of service, amount charged, physician’s identification numbers and physician’s signature.

Solution

After each claim is processed, an explanation of benefits (EOB) is sent to you from your insurance carrier. The EOB details how your claim was processed, how much you owe your provider and how much the insurer paid your provider. If a portion was not covered, the EOB will list a reason code, giving you an explanation. If you do not understand what the code means or you believe there is an error, call your insurance company and ask for assistance. Your insurance company can tell you the reason the claim was not paid. If it is something your provider needs to correct, your insurance carrier will contact the provider regarding the mistake.