What does the term "claims adjudication" refer to in health insurance billing?

Claims adjudication in health insurance billing refers to the systematic process of reviewing claims for payment. This process involves evaluating the information submitted in the claim against the insurer’s coverage policies to determine whether the services rendered are eligible for reimbursement. During adjudication, the insurance company assesses the claim for accuracy, eligibility, and compliance with the plan provisions.

Several components are typically involved in this process, including verifying the patient’s policy details, checking for pre-authorization, and confirming that the billed services align with the diagnosis provided. The result of claims adjudication can lead to various outcomes, such as the claim being approved for payment, partially paid, or denied altogether.

In contrast, appealing a denied claim, submitting a claim, and paying a claim are distinct actions that come into play at different stages of the claims process. Each has its own specific procedures and implications for healthcare providers and patients, but they do not encompass the entirety of claims adjudication, which is dedicated solely to the review and decision-making phase regarding claims for payment.