Electronic Claims Submission Steps (The American Medical Association (AMA))

Electronic Claims Submission method should be considered by physician practices before starting claims submission process. Electronic claims may be transmitted by:

  • Dial-up method, which uses a telephone line or digital subscriber line for claims submission.(Clearinghouses typically supply the physician practice with the software required forcommunication between the physician practice’s computer and the clearinghouse’s system.)
  • The Internet, which allows for secure, direct transmittal of claims submission to health plansover the Internet and eliminates the need for transmittal software.

Electronic ClaimsElectronic claims can be generated in a practice management system and then transmitted either directly to the payer electronically in accordance with the health plan’s submission requirements or indirectly through an application service provider (ASP) or cloud computing service, a clearinghouse, a billing service or another third-party vendor.

An ASP or cloud computing service is a company that contracts with a payer and/or physician practice to supply software applications and/or software-related services for use over the Internet. A clearinghouse is a private company that provides connectivity, often serving as a “middleman” between physician practices, billing entities, payers and other health care partners for transmission and translation of claims information into the specific format required by payers. A clearinghouse acts for an electronic claim like the Post Office does for a manual claim. Physicians or physician groups often contract with clearinghouses for a nominal fee. A contracted billing service, an ASP or even a payer may meet the definition of a clearinghouse if it performs such translation and transmission services.

Physician practices submitting electronic claims directly to a payer must follow the national standard formats currently in place—these require completion of extra fields beyond the standard fields of the CMS-1500 claim form. Each payer has a companion manual containing specific requirements above and beyond the Health Insurance Portability and Accountability Act (HIPAA) of 1996 mandated requirements that must be met in order for claims to be processed for payment. Those specific requirements should be programmed into your practice management system electronic claims module and be handled automatically. Health insurers are required by HIPAA to accept electronic claims. The physician practice should have checks and balances in place to protect the privacy of information and to ensure that the electronic claims are submitted in compliance with HIPAA requirements.

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