What Is a Claim in Health Insurance?

A health insurance claim is a formal request submitted to an insurance company for payment of medical services or expenses. It allows individuals to access the financial benefits provided by their health insurance policy. The claim process ensures that healthcare providers receive payment for services rendered, or that policyholders are reimbursed for out-of-pocket medical costs.

How Health Insurance Claims Work

Health insurance claims are handled through two main methods: direct billing by the provider or reimbursement claims submitted by the individual. Direct billing, also known as cashless claims, is the most common approach. Healthcare providers, such as doctors’ offices or hospitals, directly submit the claim to the patient’s insurance company. The patient provides their insurance information at the time of service. This method reduces the immediate financial burden on the patient, as the insurer settles the bill directly with the facility.

Conversely, a member reimbursement claim requires the individual to pay for medical services upfront and then seek repayment from their insurance company. This method is often necessary for out-of-network care, emergency services at facilities not contracted with the insurer, or when traveling internationally. It may also occur if a healthcare provider does not offer direct billing. While direct billing saves the patient from extensive paperwork, reimbursement claims require careful documentation of all expenses.

Information Needed for Claim Submission

Before submitting a health insurance claim, especially for reimbursement, gather specific information and supporting documents. Required personal details include the patient’s full name, address, and date of birth. Insurance policy details are also essential, including:
The policy number
Group number
Plan name
The insurer’s contact information

Detailed information about the service received must be provided. This includes the date of service, the healthcare provider’s name and address, and a description of the service. Diagnosis codes (e.g., ICD) and procedure codes (e.g., CPT) are necessary for accurate processing. The cost of the service should be clearly stated.

Supporting documentation is a component of a complete claim submission. Itemized bills from the provider, payment receipts, and any referral or pre-authorization numbers are typically required. If a specific claim form, such as the CMS-1500, is used, it must be obtained and accurately completed. Filling all fields correctly helps prevent delays or denials.

Steps for Submitting a Claim

Once all necessary information and documentation are prepared, a health insurance claim can be submitted. Common methods include online portals, mail, or fax. Many insurance companies offer secure online portals where members can upload completed claim forms and supporting documents, which often streamlines the process.

Claims can also be submitted via mail. This involves printing the completed claim form, attaching all required receipts and itemized bills, and mailing them to the address provided by the insurance company, usually on the member ID card. Some insurers may accept claims via fax. Keep a copy of all submitted documents for personal records.

Claim Review and Resolution

Once a health insurance claim is submitted, the insurer reviews it to determine coverage and payment. This involves checking patient eligibility, verifying medical necessity, and confirming adherence to policy limits. Insurers also perform “claim scrubbing” to identify errors or missing information before processing. This assessment ensures the claim aligns with the policy’s terms.

A claim review can result in full approval and payment, partial payment, or denial. Partial payment or denial can occur for reasons like missing or incorrect information, services not covered, or an unmet deductible. Lack of medical necessity or failure to obtain prior authorization are common reasons for denial. Claim processing typically ranges from a few days to several weeks, often within 30 to 45 days for clean claims.

Understanding Your Explanation of Benefits

After a health insurance claim is processed, the insurer sends an Explanation of Benefits (EOB). An EOB is not a bill; it summarizes how the claim was processed and any amounts the patient may owe. Key components on an EOB include the services provided, date of service, the amount the provider charged, the amount covered by insurance, amounts applied to the patient’s deductible, copayment, or coinsurance, and the amount the plan paid. The EOB also shows any amount the patient still owes. Comparing the EOB for accuracy with provider bills helps manage healthcare expenses.