What process involves the payer evaluating the claim for payment and confirming coverage?

The process of adjudication involves the payer evaluating the claim for payment and confirming coverage details. During adjudication, the insurance company assesses the submitted claim against the patient's insurance policy to determine its validity. This includes checking if the services rendered are covered under the patient’s plan, ensuring the billed amounts are appropriate, and determining whether any patient cost-sharing responsibilities, like copayments or deductibles, apply.

Adjudication is crucial because it not only validates the claim based on policy coverage but also helps to prevent fraud and ensures that claims are paid correctly according to the terms of the insurance contract. It ultimately leads to a decision about whether to approve, deny, or partially pay the claim, making it a vital step in the health insurance billing process.