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Discuss the life cycle of an insurance claim. For example, where does this cycle begin and how does it begin? In your discussion, demonstrate your ability to discuss claims submission, clearinghouse, VAN, and EDI.

Steps of an insurance claim cycle are as follows:

The cycle begins with submission of claim. This involves the submission in a manual or electronic form the claim form and data related to the insurance claim. The claim is submitted to the ultimate payers of insurance or the intermediate clearing houses. Clearing houses are intermediaries which enable processing of claims and conversion of unstructured data into standard form. This would involve exchange of data between computers of clearing houses or insurance payers using electronic data interchange (EDI). The health insurance claim is reviewed and processed: The statement and codes are carefully reviewed by your insurer. They will verify all the information is correct and whether the services listed are covered benefits and medically necessary. This is called claims processing. Adjudication of claims is when the claim is compared to ensure that claim is as per the patient health benefits plan and also that required procedures have been followed and necessary information is available. The amount of deductible expenses and other such charges are calculated. Lastly, the health insurance benefits and coverage are explained, your insurance company will send you a letter in the mail called an Explanation of Benefits (EOB). This letter will show you what has been paid, what has been written off by the provider, and what still needs to be paid by you, the patient. Payment of claims: The insurance company is provided with a formal request for a payment based on the terms of the opted policy. The verification of the claims are done and then claim is paid to the patient post completion of verification.