Insurance claims adjusters play a vital role for insurance providers by investigating insurance claims to determine the extent of the insuring company's liability. Their work can range across the insurance spectrum including health, life, property, and auto. This can include structural damage, liability claims involving personal injuries or third-person property damage.
Claims adjusters verify insurance claims and determine a fair amount for settlement. This requires them to perform a wide variety of functions in the course of doing their job. They do this through an investigative process that includes the following:
- Interviewing the claimant
- Interviewing witnesses to the damage
- Obtain police, fire and medical reports for review
- Interview legal and healthcare professionals with knowledge of the incident
During this process, insurance claims adjusters are gathering a great deal of documentation, statements, photographs and records that are instrumental in assessing claims before processing. This documentation is compiled into a comprehensive report provided to the insurance company and other professionals as needed (and authorized) to evaluate and process the claim.
Upon completion of the investigation, the claims adjuster can determine the scope of liability held by the insurance provider to the insured. Since insurance adjusters in life, property and auto work for or with the insurance providers, their goal is to limit the liability payout to only those factors that are applicable and undisputed.
While insurance claims adjusters in the broadest sense work with claims related to health, life, property and auto insurance, medical claims adjusters are a distinct subset focused on health insurance claims. Medical insurance claims adjusters determine if an individual’s insurance policy covers a specific medical procedure. They will either work directly for insurance companies or as part of a physician’s practice, medical group, or hospital processing medical claims.
The Health Claims Review Process
One of the primary responsibilities of an insurance claims adjuster working for a payer is to make sure the claim is valid. This requires a careful inspection of each policy’s benefits. This review process is investigative in nature, as they check each claim to verify medical necessity of a procedure and whether the individual’s policy covers it.
The claims adjuster is responsible for gaining any missing information from patients, doctors and hospitals as well as verifying that the procedure took place. The first step is the review process to ensure the claim form is filled out completely, which requires detailed knowledge of current billing and coding procedures. This includes a detailed understanding of current procedure codes (CPT) and disease classification codes (ICD).
Hospitals and healthcare enterprises use ICD for coding of:
Current Procedural Terminology (CPT) codes define the following performed by health care providers:
- Medical Services
- Diagnostic services
- Surgical services
Both numeric-based codes utilize software to compare the relationship between their use in a claim for submittal.
The claims adjuster is responsible for providing updates on claim status during the review process to patients, doctors, and hospitals. Once the claim has been thoroughly reviewed, the adjuster determines the amount to pay based on a complex set of criteria determined by the insurance company and the individual policy.
The adjuster is responsible for notifying all parties involved of the claim decision and the reasons for the determination. Valid claims are processed with designated payments to the physician and/or hospital. When claims are denied, the adjuster sends a letter to the doctor, hospital and patient with the reason for the denial and provides answers to any questions they may have.
The procedures are slightly different for medical claims adjusters working directly for physician practices and hospitals. These adjusters work directly for the healthcare provider to collect and process claims. They do this by working with the patient to fill out the claims forms and then submitting them to the insurance provider. Accuracy and detail are critical to claims adjusters working directly for either providers or payers to avoid overpayment (in the case of an adjuster working for the payer) and underpayment (in the case of the adjuster working for providers).
Claims adjusters working for healthcare providers are also responsible for submitting claims to CMS for Medicare reimbursements. HIPAA regulations require that claims be submitted electronically. While rules exemptions do exist for practices with fewer than ten employees to submit claims manually, few if any claims adjusters go this route and have access to sophisticated claims adjustment software for support.
The most common forms used for claims are
- CMS-1500: This form is used for private practices and other non-institutional healthcare organizations.
- UB-04: This form is used for hospitals and other institutional healthcare entities.
Successfully Navigating the Complex Claims Process
The billing process for an insurance company or third-party payer contains numerous variables that the medical insurance claims adjuster must know intimately. This ranges from the minute details inherent to a patient’s insurance plan, individual payer guidelines for claim submission and payer/provider contract details.
Highly accurate record keeping is also vital to the role of the claim’s adjuster in the event of legal disputes that may arise. These records enable the claims adjuster to show the specific reasons for coverage or denial of a claim as well as the settlement amount if the claim was settled for less than expected.
Insurance claims examiners utilize a mix of analytics, investigative research, and highly developed interpersonal skills to successfully adjudicate countless claims each year. This involves interacting with medical experts and an ability to evaluate medical records. Negotiation skills are necessary for both reaching settlements with claimants and working with attorneys on the insurance company’s behalf.
Insurance claims adjusters may need a professional license, depending on the state. Some states allow claims adjusters working for large companies to work under the company's license, while other states mandate that all adjusters be individually licensed to practice.
Many providers look for claims adjusters with certifications and some healthcare related background or training such as billing and coding. Voluntary certifications and designations are available through professional claims adjuster organizations, such as the Society of Registered Professional Adjusters (RPA) and the International Claim Association (ICA).