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What is Adjudication in Medical Billing-B

Claim Adjudication is a process where insurance companies review the claim and decide how much to pay the Provider. Adjudication checks the patient’s personal information, demographics, and care plans for accuracy. It also ensures that medical codes and all CPT codes are correct. The Provider must use accurate codes for the services provided to the patient to avoid claim rejections. 

Once the insurance company completes the evaluation, there are three potential outcomes. The Payer may accept the claim and reimburse the Provider in full, which is the ideal outcome. Alternatively, they may reduce the reimbursement amount if they find any unnecessary additions, which is a possibility to be aware of. Lastly, the insurance company may simply deny the claim due to errors. This is a risk that can be mitigated with careful preparation. The Payer will accept the claim and reimburse the Provider. Providers can also outsource medical billing services from a third-party billing company to minimize unnecessary additions or unbundling errors so that the Payer cannot reject the claim.

If the claim is denied, the Provider has the option to resubmit it after resolving the issues. However, this restarts the entire adjudication process, leading to reimbursement delays. The Provider must meticulously prepare the claim to avoid unnecessary claim rejections and payment delays.

Key Players in Adjudication and Their Responsibilities

There are multiple key Persons in the medical billing industry who are responsible for different things. Here, we will talk about the Key players involved in the Adjudication process and their core responsibilities. Let’s understand Adjudication in Medical Billing step by step and discuss the key persons involved in this process.   

  • Patients
  • Healthcare Providers
  • Medical Billers and Coders
  • Clearinghouses
  • Insurance Companies/ Payers


Healthcare providers rely heavily on accurate patient information and demographics. Therefore, it is the patient’s duty to provide precise and up-to-date personal information and insurance details. Understanding their responsibilities, patients should know their coverage, copayments, Out-of-pocket amounts, and deductibles. If the patient’s insurance is about to expire or if their insurance plans change, it is crucial to communicate this to the insurance company to avoid future difficulties.

Healthcare Providers

It is crucial for healthcare providers to collect accurate Patient details when providing medical services. When the doctor or his in-house Billing team prepares a claim, they should add accurate patient details and CPT Codes with supporting documents. If the insurance company requires additional documents, the Provider should promptly respond to the payments.

Medical Billers and Coders

Medical Billers and coders play a significant role in the adjudication process. If a Medical Biller does not follow the rules and adhere to the HIPAA regulations, the health facility will face a huge revenue loss and legal penalties. Assigning accurate CPT codes to the medication, services, and diagnosis is the responsibility of a medical biller and coder. Preparing and submitting the claim on time and following up on denials are also the responsibilities of a Biller. If a health facility faces frequent denial, it might be possible that there is something wrong with the claims, so a medical biller should address these issues promptly. 


Clearinghouses are working as a bridge between the payers and the Providers. They receive claims from healthcare providers or third-party billing companies and perform initial validations, including error checking and pointing out the missing information of the patient, which are the responsibilities of a clearinghouse. The clearinghouse first receives the claims and will route them to the relevant insurance companies or payers for Adjudication processing. Clearinghouses monitor the claim status, identify issues throughout the process, prepare reports on in-process claims, and communicate with the Healthcare facility and payers.

Insurance Companies/ Payers

Once the insurance company receives a claim, it is their responsibility to review the claim with adherence to compliance and regulations. If the Payer finds any error with the coding, patient Demographics, Insurance Details, or Patient Eligibility, they should escalate these issues at the initial level. The payers must understand the process of Adjudication in Medical Billing properly. Insurance companies have full authority to accept, deny, or reject the claims, but the reason must be authentic for the rejections.

How does Adjudication in Medical Billing Work?

When a patient receives medical services from the doctor in the form of a procedure, Examination, Medication, consultation, major Surgery, or Minor Surgery, The doctor must always Prepare a Superbill against the services provided to the patient. This includes the patient’s personal information, demographics, and procedural details along with the practice information, CPT codes, ICD 10 codes, referring physicians, information, and more. Here comes the Adjudication process After submitting the superbill to the Payer. The insurance companies decide how much is required to pay for each service.

Here, Adjudication is responsible for treating the claim correctly. If errors in the adjudication process are directly considered fraudulent activity, strict actions can be taken against the Payer and the healthcare facility. So, the Provider and the Payer must process every claim carefully.

Role of Adjudication in Medical Billing

Adjudication is the most crucial part of Medical billing. It is the checkpoint for claims after submission. The process decides whether the claim is accurate and how much providers should get paid for their claims. It depends on the accuracy of information provided, the accuracy of the CPT codes, and the documents essential to defend the claim against the services a physician provides the patient. Every step in the medical billing process is interlinked with the Adjudication Process. If there are Adjudication delays, the payment posting will ultimately be delayed, as will reimbursements. There is even a possibility of revenue loss due to posting a wrong payment and delay. 

As per the Healthy Medical Billing process rules, every step must be followed accurately. If inaccuracies or errors occur at any point, they can affect the whole process. Suppose the Provider has made errors in the charge entry process that lead to claim denials. The Provider and the in-house billing team need to submit accurate charges for the services provided by the patients.


Adjudication is a critical process in medical billing. It is responsible for ensuring the accuracy of claims for payers’ clearance. It initiates the submission of claims after the services are provided to the patient. This process ensures that the doctors offer accurate services to the patient and use the correct codes for services, medication, consultations, and procedures. The relationship between Adjudication and the Superbill is direct. If the Provider submits the Superbill with the proper information, the Payer will approve the claim and not delay the reimbursements. For healthcare practices struggling with managing their Medical Billing services, outsourcing to a Third-Party Medical Billing company like Physicians Revenue Group, Inc. can be a beneficial solution. Their Billers offer expert assistance with Error-free Billing, ensuring accuracy and adherence to HIPAA compliance.