Medical Claims


From scrubbing, transmitting, adjudicating, you name it – it’s here on the Medical Claims Page; everything under the sun that has to do with claims. Rejections, Denials, Appeals, Resubmissions, Management, Testing, Errors, Paper, Electronic, Billing, Clearinghouses, Free, Unlimited, PAR, Non PAR, Government, Commercial, Medicare, Status Reports, Adjusters, Lost Claims, Medicaid, BC/BS, Coding, Edits, Software, and more!

In introducing the topic of insurance claims, it’s necessary to state that there are university degrees offered in Revenue Cycle Management, which is the science of managing medical claims, and that an exhaustive work on the subject would be encyclopedic. The effort of this page is far less granular, to uncover the top 30 or so basic introductory topics that come up in everyday medical billing scenarios, and to offer clarity and insight to the arcane terms billers are surrounded with – or ‘medical billing speak’. Click here to check out the top ten tools every medical biller must have in order to successfully bill!


We cannot begin our topic of claims processing without first introducing our nemesis – and every biller’s source of income -the CMS-1500 Form – also know as the ‘Professional Form’ because it’s is used to bill out all of the rendered services of all health professionals. For over twenty years it was called the HCFA form (pronounced “hic-fa”), so nearly everyone in the industry still calls it this. From this form flows all knowledge, and every veteran Billers knows it like the back of her hand. But who would imagine that 33 little boxes could cause so much trouble, right?  If you want to see a field-by-field explanation of the form, we have found a useful page here: 

Paper Claims vs. Electronic

Paper Claims are fairly straight forward as you only have 33 boxes to worry about. But Electronic Claims can be a bit more complicated as the ANSI-837 file (the electronic version of the paper CMS-1500 Form), has 2,400 different segments that can go wrong, and Testing Claims can be truly tedious work. Medical offices seldom have to enter this mad world, but it is day to day stuff for Claims Software companies, and Claims Processors.


Claim Rejections occur whenever there is incorrect information on the CMS-1500 Form. Claim errors cause the claim to be rejected at three levels:

1.) At the software level (referred to a front-end edit, and the easiest to fix).
2.) At the clearinghouse level, which will produce an error code, so this is fairly straight forward. And…
3.) at the Payer Level. This is the trickiest part because each payer (remember there are over 4000 of them) has its own rules about what information they want in what field. The good news is that as a medical biller, you send insurance claims to the same few dozen payers day in and day out.


Denied claims are simply the worst, and they are the bane of every medical biller. Denials are different from rejections and can happen for several reasons (none of them good), the worst being that the front-desk failed to check eligibility, which means the doctor most likely won’t get paid. Payer denials due to benefit issues can be appealed on the basis of medical necessity. With commercial payers (the worst culprits, and the bulk of unwarranted denials), this is often what has to be done.


A Claim Resubmission is required when an insurance claim needs to be sent to the payer a second time because it has been corrected, or is resent with an appeal letter, or resent with the necessary accompanying medical documentation.


(Government vs. Commercial)

PAR and Non-PAR are confusing clearinghouse terms that designate which payers a medical claims processor is participating with. To add confusion on top of confusion, doctor’s use the same term to relay which insurance payers they are participating with. PAR claims are most often Commercial payers (non-government payers) like United HealthCare (UHC), Cigna, Aetna, plus thousands of other private insurances.

Non PAR claims are claims to government payers like Medicare, State Medicaid, BC/BS, Tr-Care (veterans), and Railroad (retired government workers).


Lost Claims happen when you believe that you have uploaded, or sent your batch file of electronic medical claims to the payer, but a few weeks later, you see no response from the payer and no status report in your clearinghouse control panel. So you pick up the phone and call the payer only to find out they have no record of the claim. These are lost insurance claims that have to be then resubmitted to the health benefit payer.

CLAIMS Clearinghouses

EDI Clearinghouses are companies that act as an intermediary to insurance payers. They shield payers from the potential of millions upon millions of claim errors hitting their internal system thus overloading it with bad claims. Clearinghouses catch these errors first and then return the bad claim to the medical practice for correction and resubmission. Once the claim passes the clearinghouse level, it is allowed to proceed to the payer. Most insurance payers are more than happy to pay a penny or two per transaction for the tremendous service clearinghouses provide them.





Medical Claims Clearinghouse Ratings and Reviews