Guide to Electronic Claims in Medical Billing

  • Electronic claims are any medical claims that you create and submit digitally without any paperwork or stamps.
  • Electronic claims submission can save medical practices invaluable time and money while improving claims quality and tracking.
  • You can submit claims electronically through the self-service or outsourced full-service model.
  • This article is for medical practice owners interested in learning more about electronic claims in medical billing.

Electronic claims are fast becoming the industry standard in medical billing. Surely you've noticed this, and if you're not already submitting most or all of your claims electronically, you may be thinking of making the switch. This guide to electronic claims can help you with the transition. Read on to learn why electronic claims might be right for you and how to get started.

What is an electronic claim?

An electronic claim is any medical claim created completely digitally, without any paper or printing, typically within a medical software solution that includes a medical practice management system. You can create and file them yourself or outsource the process to medical billing services. Our medical billing best selection page can tell you about the best service for your practice needs. Once you're set up with the right service, you can submit your claims electronically to payees instead of sending HCFA forms by post.

TipTip: Looking for a medical software to make electronic claims? Consider our best selections of medical software page for reviews of some of the top solutions on the market.

Benefits of submitting claims electronically

In 2013, the American Medical Association and the Connecticut State Medical Society published a joint paper detailing the benefits of using electronic claims in medical billing. Two health care officials indicated these key benefits of electronic claims:

  • Time Saving: Printing and completing manual forms is a laborious process that cannot be automated. Your medical billing service can compile electronic claims in a fraction of the time through automation processes that reduce errors. It can then submit these error free claims almost instantly. Fewer errors of course mean fewer claim rejections, which can improve your cash flow.
  • Resource Savings: Creating and submitting manual medical claims requires a lot of front-office staff time, not to mention budgeting for postage. None of these terms apply to electronic claims. In fact, research found that switching from manual to electronic billing can result in annual cost savings of up to 60%.

did you know?did you know? Skipping manual processes in favor of electronic claims submission can cut your costs by up to 60%.

  • Scrubbing Claims: Even the most experienced medical billers and coders are bound to miss errors when double-checking claims. After all they are human. Computers and machines are much more precise. Claim scrubbers, which are fully automated, rapidly catch claim errors and flag them for rectification before the payer submits them.
  • Integrated Clearing House: Sending claims through the mail introduces all kinds of potential delivery errors. Your claims may be lost, or you may send them to the wrong address. Instead the integrated clearinghouse that operates the online medical billing process directs your claims exactly where they should go in seconds. As a result, you can submit your claims to payers almost instantly.
  • Claim Tracking: If you send claims by postal mail, you won't know they've reached the insurer unless you pay extra for tracking. Even if you pay for tracking, you will not know the status of your claim after delivery until the payer sends you acceptance, rejection or denial in the mail. With Electronic Claims, you can view the real-time status of your claims every step of the way through a detailed audit trail.
  • Fast Payer Reimbursement: Postal mail may take several days to reach its destination. If you are sending a claim or waiting to be reimbursed by postal mail, the process can add unnecessary delay to the billing cycle. In contrast, electronic claims proceed instantly, and payers can reimburse you the moment your claims are approved. Any delay in the billing cycle will be eliminated.
  • More precise accounts receivable: You are probably well aware that a substantial portion of your practice's potential revenue and cash is held in accounts receivable (AR). You're probably also familiar with the frustrations that come from keeping an accurate track of your accounts receivable. Since electronic claims accelerate the reimbursement process and track all claims, they streamline and improve everything.

How to submit electronic claims

You have two options for submitting electronic claims in medical billing:

1. Self Service Electronic Claims

If you handle the creation and ‘insurance' of your electronic claim, your process is self-service. Your choice of medical billing partner can determine whether your claims process is self-service. For example, since AthenaHealth's revenue cycle management services require that you have a medical biller in-house, your process will be at least partially self-service.

For self-service electronic claims, either a business person like you or, more commonly, your front-office employee will prepare and submit the claim in question. If your practice operates with relatively few payers, the self-service model is often straightforward. In this case, each payer is likely to have specific software that you can use to create and file your claims. If you work with multiple payers things get a little more complicated.

Multiple-payer practices typically turn to integrated clearing houses to reduce their billing complexity, but doing so leaves you with a choice. Do you submit the files you create, or do you enter the data directly into the clearing house? File submission may be a viable option if your practice management software (PMS) can easily compile claims into a single file. Data entry is preferable if you lack PMS or prefer to fill electronic claims yourself.

Of course, file submission and data entry de-automate the electronic claim filing process to some extent. However, they can be significantly less expensive than outsourcing your medical billing altogether. That said, they can get expensive if you add functions for insurance information checks, electronic remittance advice (ERA) statements, and more. Many practices find it reasonable to pay for the full service that comes with outsourced medical billing.

2. Full-Service Electronic Claims

Full-service electronic claims are virtually synonymous with outsourced medical billing. Third-party medical billing companies generally only require basic patient information and a summary of the services you provide to make electronic claims. They can then quickly turn this information into properly formatted and coded claims. Before submitting these claims to payers, the billing service will run them through claim scrubbers to maximize accuracy.

Your medical billing service will monitor everything that happens between your claim being submitted and you being reimbursed. If claims are denied or denied, your medical billing service will ask for resubmission or patient payment. For transparency in the entire process, you can track the real-time progress of your claims through your medical billing company's software. User-friendly options such as Kareo are especially helpful for navigating the mess and mud of a complex process.

Medical billing services result in an extremely practical approach to your electronic claims. For low spread practices, this approach is invaluable — well, until you consider the cost. Most medical billing companies keep a percentage of your practice's monthly collection for their work — typically as low as 2% and as high as 9%.

significant achievementsFYI: Most third-party medical billers charge 2% to 9% of your practice's monthly collection for their services.

You may be concerned that outsourced medical billing may soon become unaffordable. However, a comprehensive view of medical billing can show that outsourcing is worth the cost. Think about the errors that you or your thin-skinned employees often make when rushing through claims. That alone can exceed the cost of outsourced medical billing. The upfront cost of outsourced medical billing services often pays for itself in the long run.

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