What is the third stage of the claims cycle?

The third stage of the claims cycle is adjudication. This phase is crucial as it involves the insurance company reviewing the submitted claim to determine whether it meets their criteria for payment. During adjudication, the payer assesses the claim against the terms of the patient’s insurance policy, verifying the patient’s eligibility, coverage for the services rendered, and whether the services are deemed necessary and appropriately documented.

This stage will culminate in one of several outcomes: the claim may be approved, denied, or may require additional information before a final decision is made. Understanding adjudication is essential for billing and coding specialists as it directly impacts the timeliness and accuracy of payments for services provided.

Other stages, such as submission and payment, are adjacent in the claims cycle but occur before and after adjudication, respectively. Pre-authorization is a separate process that takes place before services are delivered and is aimed at determining coverage rather than processing a completed claim. Thus, adjudication is distinctly identified as the third stage in the workflow of processing health care claims.