Over the past century, the health insurance industry has evolved dramatically. In addition to other changes and advancements, this evolution has been characterized by complex multiline health plans, increased regulation, standardized procedure and diagnosis coding, and government programs. These features of modern health insurance, as well as changing medical practices and technology have resulted in increased complexity in the claims adjudication process (the process by which insurance payers determine the amount of reimbursement they are responsible for).
In the face of such complexity, modern claims processing procedures and standards serve the purpose of ensuring the eﬃciency and accuracy of reimbursement. This is essential to preserving the ﬁnancial sustainability of insurance payers and healthcare providers, as well as the aﬀordability of care for patients. To this end, the primary components of the claims adjudication process are the ﬁling and receipt of claims (both electronic and paper), several rounds of review (automated and manual), resubmission of denied claims, payment processing, distribution of Explanations of Beneﬁts (EOBs), claims archiving, and claims data recording.
The process starts with the ﬁling of claims by a healthcare provider. Professional service charges (e.g. services from medical staﬀ) and hospital facility fees have separate claim forms; a single hospital stay can require multiple claims. In order to produce a claim, information must be alphanumerically coded regarding the type of visit, the symptoms of the patient, the diagnoses made, and the services performed on or for the patient. As one might imagine, the task of encoding the vast variety of information involved in a medical vis