Insurance adjudication is one of the most important steps in the healthcare revenue cycle. It’s the process payers use to review, approve, deny, or adjust medical claims after you submit them. For practices of any size, understanding insurance adjudication is essential, as it directly impacts whether providers get paid on time and at the correct rate.
When adjudication works smoothly, payments flow in quickly and support the financial health of the practice. When it doesn’t, your providers face denials, delays, and lost revenue. That’s where tools like Rivet Health’s payer performance solutions can simplify your RCM.
Learn what happens with RCM claims that get routed to the insurance adjudication process and how the right technologies level the playing field.
Insurance adjudication is the payer’s decision-making process once you submit a claim. Every claim goes through several stages before it results in payment or denial:
Insurance adjudication is so central to the lifecycle of RCM claims. Therefore, you need to understand each possible outcome and how to respond.
Learn more about insurance processes that can impact your revenue cycle by downloading an ebook.
Once a payer completes the insurance adjudication process, they will provide a disposition. Potential outcomes include the following:
The ideal outcome of insurance adjudication is that your claim will be paid as submitted. When a claim is clean and complete and meets all payer requirements, it is processed without delay. Providers receive full reimbursement based on their contracted rates.
Claims in this category boost your clean claim rate. If you have a high clean claim rate, you will see stronger cash flow and will waste fewer resources following up. This is great for the long-term health of your practice. Unfortunately, many practices struggle to achieve and maintain a high clean claim rate due to payer underperformance and changing submission rules.
Not all claims make it through the insurance adjudication process smoothly. Some are denied outright or reimbursed at a lower rate than expected. When this happens, it may be due to:
Each denial represents lost revenue and additional work for the billing team. Without visibility into payer patterns, underpayments can go unnoticed and unchallenged.
Sometimes claims stall in insurance adjudication. If your team submitted the claim but it’s missing required data or codes, payers may mark the claim as pending until it is corrected. These delays slow down reimbursement and create a backlog for revenue teams. Identifying these gaps quickly and resubmitting clean claims is essential to keep the revenue cycle moving.
You don’t want these issues to hold up your revenue cycle or prevent providers from receiving full reimbursement rates. Make sure that you understand the common outcomes from the insurance adjudication process and how to respond to each of them in a timely, efficient manner.
Even experienced billing teams run into challenges during insurance adjudication. Prior authorization pain points, a lack of transparency, and delays in the submission process can all throw a wrench into your revenue cycle. Here are some of the most common issues to look out for:
One of the biggest frustrations for billing teams is the lack of clear feedback from insurers. Providers often receive minimal explanation. This leaves them guessing about the root cause and repeating mistakes. A lack of transparency can also result in a violation of the No Surprises Act.
Poor communication from payers is just part of the problem. If your team is relying on antiquated RCM technology, they will face a lack of internal visibility as well. Without transparency, finding and fixing problems that impact your revenue cycle becomes an uphill battle.
Even minor discrepancies in coding or incomplete documentation can trigger unnecessary denials. A single missing modifier or mismatched diagnosis code can hold up an entire claim. These errors are typically preventable, but when they occur, they create added work for staff and delay reimbursement. Streamlined workflows and software that automatically flag inconsistencies can help reduce these issues.
Don’t rely on manual processes for identifying coding errors. Doing so is simply too slow and tedious for today’s healthcare billing environment. By the time you track down the root cause of a denial, it may be too late to appeal the claim.
Adjudication is often slowed down by related administrative tasks — particularly prior authorization. Prior authorization workflow processes must be fast and efficient. When they are, you can avoid miscommunication issues and time delays during the filing process.
Otherwise, your staff will have to jump through extra hurdles, which will stretch out payment timelines. If these delays become systematic, your revenue cycle will be bogged down, and actual cash will not match your projections.
Insurance adjudication is a payer’s internal process, but it has a huge impact on your bottom line and whether you get paid promptly or not. By understanding outcomes and addressing pain points, you can reduce denials and improve clean claim rates. To do that, you’ll need the right set of tools.
Rivet’s claims analytics software can help you navigate the insurance adjudication process and protect your bottom line. Our powerful tools provide insights into underpayments, denial trends, and more. Schedule a demo with Rivet Health or sign up for an upcoming webinar and let our solutions level the playing field.
