What is Claim Scrubbing in Medical Billing?

Medical billing is a complex process with many steps to ensure that hospitals, physician practices and other healthcare organizations get paid for services provided to patients. Healthcare providers usually partner with medical billing outsourcing companies to submit claims to government and private payers and work with them to collect payment. Claim scrubbing is a key step in the medical billing process where claims are checked for errors before they are submitted to payers.

Clean claims result in faster payment. However, healthcare providers are facing denied claims and post-payment recoupments. According to Experian Health’s recent The State of Claims 2022 report, healthcare claim denials are a persistent problem for healthcare providers. Up to 75% of the survey respondents said that claims are denied 5%-15% of the time. Nearly 33% saw claims denied 10-15% of the time. Healthcare providers can lose billions of dollars due to insurance claim denials, as well as additional money to rework and resubmit claims. The report notes that the pandemic resulted in new hurdles to reimbursement. For 72% of respondents, claims management is more important now than it was prior to the pandemic.

Claim scrubbing is critical to file clean claims, reduce denials and receive payment faster. According to MGMA, it is important to file a clean claim for the following reasons:

• Every rejection or denial introduces the risk of not getting paid
• Studies show the average cost to rework a claim is more than $25
• Industry sources indicate that 50% to 65% of denials are never worked, which is attributed to lack of time or knowledge

Fortunately, outsourcing medical billing can ensure clean claims for optimal and timely reimbursement.

Importance of Claim Scrubbing

After providing a patient with medical care, the healthcare provider has to send a clean claim to the insurance company to get reimbursed for the service. According to MGMA, a clean claim is one that “has no defect or impropriety, including any lack of required substantiating documentation or particular circumstance requiring special treatment that otherwise prevents timely payment”.

Claims require a lot of information:

• Details specific to the patient
• Information about the healthcare provider, individual physicians and medical staff
• Data about Medicare, Medicaid, and other healthcare programs
• Detailed information about the patient encounter – diagnoses, procedures, treatments and tests that were performed out. They also include details about the insurer
• Medical necessity
• Medical codes that identify the diagnosis, service provided, and insurance coverage, place of service code (such as in-office visit, outpatient surgery center), date of service, allowed amount, and other related information
• An itemized list of charges generated for services provided

Unless all this information is correct, the claim will be denied. This is where claim scrubbing comes in.

What Claims Scrubbing Involves

Claim scrubbing is the process of reviewing each claim before submission to the insurance company. Claim scrubbers verify the data on a medical claim and correct errors that can cause denials. Such errors include:

• CPT code is invalid for the date of service
• Medical coding errors such as upcoding, undercoding, unbundling codes, incorrect modifier use, using unlisted codes without documentation, and failing to ensure claims align with the National Correct Coding Initiative (NCCI)
• Procedure lacks a diagnosis code
• Invalid diagnosis code
• Coverage is not active on the date of service
• Member ID is incorrect/invalid
• No admission date on an inpatient claim

Claims scrubbing process can be done manually or using software. Today, most healthcare organizations and practices prefer to rely on end-to-end medical billing services that include claim scrubbing to ensure accurate claim submission. The benefits of claim scrubbing by an expert include

• Error-free claims
• Faster payments
• Reduced claim rejections
• Less time on costly reworking of claims
• Increased cash flow
• Improved payer and patient relationships

Reduce Claim Denials – Outsource Medical Billing to an Expert

Expert teams in leading companies have expert teams that will thoroughly audit claims before submission to insurers. They stay current on payer policy language and industry rules and guidelines, which is crucial to ensure accurate claims. Their services include:

• Patient eligibility verification prior to services and precertification to ensure updated patient information on claims
• Accurate medical coding that informs payers about:
  • The patient’s diagnosis
  • Medical necessity for provided treatments, services, or supplies
  • Accurate modifier assignment to describe any unusual circumstances or medical condition that impacted the treatments and services provided to the patient

• Medical billing — collecting, posting and managing account payments, submitting claims and following up with insurance companies
• Evaluating unresolved AR, claim denials, and coding issues to determine the root cause and working with the provider to resolve them
• Helping providers maintain and submit accurate documentation
• Claim scrubbing or quality checks to ensure claims are accurate, complete, and compliant with payer requirements.

Overall, working with an expert medical billing outsourcing service can help practitioners ensure clean claims the first time.

Written By Julie Clements

Julie Clements, OSI’s Vice President of Operations, brings a diverse background in healthcare staffing and a robust six-year tenure as the Director of Sales and Marketing at a prestigious 4-star resort.

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