Claim Audit - Adjudication of Claim Adjudication

This is the process of adjudicating a claim and let the hospital know if the claim is accepted or denied or partially paid with a specific reason for each claim line why it is denied or partially paid. 

Claim Audit is a process where the insurer may take help from any other vendor in order to audit the claim and find any savings that they missed. 

There are two kinds of claim audits. Pre Paid and Post Paid.

• Prepaid is a case where claim is audited before its paid and let the insurer know why it should be denied or partially paid
• Postpaid is a case where claim is audited after its paid 

The primary reason why insurance companies need claim audit by third party vendors is - their inability to keep their adjudication system up to date with the changes that are happening in healthcare industry.  There are quarterly updates for HCPCS codes and Annual updates for CPT codes and many more changes for fee schedules and other parameters that impact adjudication. 

Also, the accuracy of billing and coding is always questionable for many reasons which may result in lot of errors. If the insurance company is not up to date with latest changes and correct coding in their adjudication, they may end up paying much more than what they actually should pay. Considering the number of claims they process, a minor inaccuracy may result in millions of dollars to the insurance company. With the introduction of ICD-10, it only got more complicated.