Finance Blog


The Typical Cycle of an Insurance Claim

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Have you ever wondered why the bill from the medical provider and the Explanation of Benefits from the insurance carrier do not occur at the same time? In many cases, they do not even match and some reconciliation may have to occur. Of course, you can multiply this confusion sometimes because of the nature and complications of the medical procedures and benefits provided.

To help aid in your understanding, it would be beneficial to know the steps that a typical insurance claim has to go through to just have everything coded and billed properly. Basically, there are seven distinct steps. Let’s cover each one separately.

During pre-registration, the medical coder or biller inputs the patient’s information into a database for the purpose of insurance coverage. The next step is to verify insurance coverage. This includes verifying that the provider accepts the insurance and to confirm that the patient understands what is covered and what is not covered.


The next step is the provider will do their job. They will provide the necessary services in providing diagnosis, treatment, and ongoing care. This includes all the ongoing treatment for the same illness. This is recorded in the patient’s electronic health record (EHR) by the medical billing and coder professional.

Next is any payment that the patient needs to pay by way of co-pays, deductibles, or any other patient obligations as required by the insurance carrier! This is then entered electronically into the data collection system and this is paid to the provider.

For any and all procedures there needs to be an assignment of medical codes by the medical billing and coding professional! These have to be accurate and verifiable. Then the claim is submitted. Once the insurance carrier receives the claim and everything is accurate then the contracted payment is paid to the provider.

Although this seems straightforward it is anything except straight forward. It requires everyone working together and the focal point is the medical code and billing professional to maintain accuracy.

Medical coding and billing are an in-demand career and you can make a great choice as a medical coding and billing professional by starting with a great online medical coding and billing course at Ashworth College.

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