Medical Claims Processing: How to Improve Medical Claims Handling

For many practices and hospitals, this stage still remains a major pain point for the medical personnel dealing with it. While the client sees only the end result, the bill itself, the provider has to toss the paperwork back and forth between various departments and insurers to make sure the client gets billed properly, and the practice gets the money for provided services. As new technologies appear, so do new ways how to improve medical claims service, optimize the electronic document workflow, ensure accuracy, and shorten the reimbursement time, among other benefits. Let’s discover why this step is important and what novel methods and technologies can come in handy.

Doctor making some notices

What is medical claims processing and why it matters?

Medical claims processing means the insurance company’s procedure aimed at checking the claim request for truthful information, validation, justification, and authenticity. The end result of this process for the healthcare provider is the amount of money paid by insuring company as reimbursement, and that’s precisely the reason why accurate healthcare claims processing matters. 

However, the insurance company can decline the request if the data provided is invalid, forged, incomplete, or outside the insurance policy. This lays additional pressure on those, who deal with the paperwork, as the mistakes can be costly to a medical facility and its clients, which is why automation of the healthcare claims processing workflow is a path many providers and insurer companies start following. And after you look at the process in more detail, you’ll understand why switching to electronic claim handling is an option. If you ever wondered how to start a medical billing company, but didn’t know where to start, visit our guide.


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Healthcare claims processing steps: from visits to billing 

Generally, there are three healthcare claims processing steps:

  • Adjudication
  • Explanation of Benefits (EOB)
  • Settlement


The claim adjudication stage involves checking the pre-authorization request, patient’s eligibility, duplication, network belonging, coverage, the need for medical treatment, the validity of diagnosis and the planned treatment, and the price for services. At this stage, a lot of manual work is being done, which makes the whole process time-consuming and error-prone. As you can see from the sequence, the errors made here lead to the incorrect claim-related decision that can not only add workload to the practitioners but also will impact the decision of the patients on whether to pursue treatment. 

Medical Claims Processing: How to Improve Medical Claims Handling 1

Explanation of Benefits (EOB) or Remittance advice

After the adjudication process, the insurance company sends the practitioners or hospitals a notice where they lay out their findings related to the claim and the reimbursement justification. Based on his data, the insurer can be reimbursed fully or partially, or provide an explanation why it can’t be done. 

Usually, the EOB notice includes the details of the amount reimbursed, discounts, covered amounts, copays, and coinsurance, etc. The insurer can also request additional documents related to the claim, and this can take up a lot of time if the practice doesn’t have an electronic medical record system and software that can safely store sensitive information. From this perspective, improving healthcare claims process is a must for faster and error-free paperwork. 


That’s the stage of healthcare insurance claims processing where the insurance company decides how much it will pay the provider for treating the insured patients. If this sum is less than the actual charged amount, the patient has to pay it to the provider’s/hospital’s office. 

Now imagine each of these stages is done manually — from entering the treatment codes to sending copies of the pharmacy receipts and treatment plan details. It won’t only take forever to do, but also increase the chance of having to go through the process all over in case of errors. But that’s just a few issues that the providers face now. What are the others?

Problems of the medical billing claims process 

  • Inaccurate coding. This issue tops this list as it’s the most popular problem of medical billing and treatment, which entails a lot of consequences for the practitioner and the patient — from influencing the treatment to fraud and abuse fines.
  • Failure to capture the patient’s details fully. It causes delays in billing for both practice and patients.
  • Failure to provide the patient with the proper amount to be paid out of their pockets. With the rise of deductibles and shifting the financial responsibility to the consumer (i.e., the patient), the latter don’t know what to expect from their bill, and when the price is too high, the practices have a hard time collecting the money the patient owns. 
  • More administrative burden. Because billing management is a complex issue, it has to involve a lot of people when done manually. It increases the overtime and payment associated with it. In 2016, 31% of medical providers still had manual claim denial management in place, a procedure that has all the chances to be fully automated.  
  • Low customer support quality. When it comes to appeals, client support is important to guide the patients through the process that probably could have been avoided with automation. 

These claims processing problems lead to two crucial issues: lack of trust and loyalty from the patients and delays in getting a steady revenue to plan for the future. Luckily, there are modern medical IT solutions and methods on how to improve medical claims handling.

doctor consulting patient

How to improve medical claims handling and optimize the workflow

Since the above issues arise from inefficient data handling and the lack of a safe network that would allow the data transmission from the provider to the insurance company and vice versa, tackling these two first would prevent a huge deal of problems. In fact, automation in insurance claims processing can address all the issues. Here’s an overview of what can be done.

Keep the claim management within a special department

Since the process can take a lot of time and the data goes back and forth from one department to another, it makes sense to keep it all within a specially designated team. On the one hand, it will decrease the chance of making mistakes. On the other, it makes outsourcing possible if it’s done according to HIPAA requirements concerning the claim handling and submission. 

Outsource healthcare electronic claims processing to a business associate 

If you aren’t sure about reasons to outsource medical billing, go on reading to figure out. Delegating the claim handling can be very beneficial for your practice. First, you won’t have to spend additional time and money on training and recruiting people for your team. Second, you define the liability limits in the contract and become fully responsible only for the information you provide to them. However, a few constraints here: the service provider’s methods of collecting and processing information have to fully comply with HIPAA, and it should know the data management state and federal policies. 

IT system improvement

AI and machine learning can have a significant influence on the way we systemize the data and use it. For example, manual handling oftentimes involves the mistakes rising from using the incorrect submission forms (UB-04 and CMS-1500 for hospitals and private practices, respectfully). Introducing the algorithm that would allow automatic detection will save a lot of trouble later on.  

Introduce auto-adjudication process

Even automatical sorting out the eligible patients from the ineligible ones can cut processing times and inform the patients whether they will get reimbursed. And creating a more complex algorithm can even identify the possible reimbursement amount and speed up the process, so there will be fewer pending claims. 


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Consider Our Company Your Trusted Partner

If you wondered how to choose right medical billing development team, consider outsourcing to Empeek. Our team has experience in developing medical IoT solutions for data management that follow the best practices and use novel technologies. Our developers have cases that illustrate the skills and competency when it comes to designing, developing, and implementing solutions for faster, easier, and error-free healthcare management. We’re very meticulous about following the HIPAA guidelines since we understand their importance for the practice that handles sensitive PHI data, and we’re ready to work together to improve the way your business handles healthcare claims. 

Final Thoughts

Being the backbone of revenue generation, medical billing is a process that should be streamlined by every medical practice to ensure proper client billing, budget planning, and service charging. Since many of the related steps are still done manually and involve many people, it increases the chance of letting the errors go unnoticed. Medical claims process improvement and automation are the surefire way to prevent mistakes, provide accurate billing information, and deal with data processing faster to speed up the reimbursement processes. Empeek team offers top-notch HIPAA-compliant IT solutions to power the claim processing with accuracy and safety your clients expect. Contact us today and let’s talk about your project today!

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Written by:
Alex Shpachuk Alex Shpachuk CEO
Alex Shpachuk is the owner and strategic partner of Empeek. His effective leadership and a visionary approach to the future of healthcare turned the company into a dynamic environment attracting the brightest minds with the common vision for product impact and service excellence. With over a decade of experience in software engineering and comprehensive knowledge of designing and deploying tailor-made solutions for healthcare providers, Alex channels his passion for software development and consulting into the written word.

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