Medical claim submission is the process of accurately reporting healthcare services using CPT, HCPCS, and ICD-10 codes to ensure timely reimbursement and compliance. Errors such as missing codes, incorrect modifiers, or overlooked eligibility can cause claim denials, rework, and delayed payments.
This guide provides a step-by-step, practical overview of the medical billing and claim submission process, demonstrating how CPT, HCPCS, and ICD-10 codes interact in real-world healthcare claims. By following these steps, coders and billing teams can submit clean claims and minimize revenue cycle disruptions.
Understanding the Three Code Sets Used in Claim Submission
Medical claim submission relies on accurate coding using three primary code sets: CPT, HCPCS, and ICD-10 to ensure proper reimbursement and compliance. Each code set serves a distinct purpose and must work together for clean claims.
CPT Codes
CPT codes describe the procedures and services performed by healthcare providers. This includes evaluation and management visits, diagnostics, surgeries, and therapeutic services. CPT codes tell payers what work was performed.
HCPCS Level II Codes
HCPCS Level II codes cover supplies, durable medical equipment, certain injections, and non-physician items not included in CPT. Any tangible item billed outside of physician services typically uses HCPCS.
ICD-10 Codes
ICD-10 codes provide the clinical rationale and establish medical necessity. They justify why a CPT or HCPCS service should be reimbursed. ICD-10 codes explain the medical reasoning but do not describe the service itself.
Clean medical claims depend on proper alignment of all three code sets. Errors often occur when CPT, HCPCS, or ICD-10 codes are submitted in isolation.
Step-by-Step Claim Submission Process in Medical Billing
Understanding the claim submission process in medical billing means looking beyond individual codes and seeing how the entire claims process flows works. From patient registration and documentation to ICD-10 coding, charge entry, and payer review, each phase builds on the last.
These are the claim processing steps in healthcare, and they shape how smoothly medical claims processing actually happens.
Step 1: Patient Registration and Insurance Verification
Patient demographics must be accurate, complete, and consistent. Insurance verification goes beyond confirming active coverage. Eligibility, plan type, deductibles, copays, prior authorization requirements, and network status need to be checked, as they all influence how the claim will be processed later.
Common issues at this stage includes the following:
- Incorrect subscriber information
- Outdated policy numbers
- Missed prior authorization requirements
These aren’t coding errors, but they remain one of the most common causes of claim rejection.
Step 2: Documentation of the Patient Encounter
Provider notes need to support every code that will eventually appear on the claim. That includes diagnoses, services rendered, time spent when relevant, and clinical decision-making. If it’s not documented clearly, it effectively didn’t happen in the eyes of a payer.
Strong documentation doesn’t need to be excessive. It needs to be specific, internally consistent, and written with coding in mind, even if the provider never sees the final claim.
Step 3: Assigning ICD-10 Diagnosis Codes
Diagnosis codes should be selected to the highest level of specificity supported by documentation. Each diagnosis must logically support the procedure being billed. When ICD-10 codes don’t establish medical necessity for the linked CPT or HCPCS codes, denials follow, sometimes automatically.
Common ICD-10 issues that cause denials includes:
- Overly general diagnosis codes
- Incorrect sequencing
- Diagnoses that don’t support medical necessity
Step 4: Selecting the Correct CPT Procedure Codes
CPT selection translates clinical care into billable services. Evaluation and Management (E/M) coding requires particular care. Whether codes are chosen based on time or medical decision-making, documentation must clearly support the level billed. Overcoding and undercoding both create risk, one financial, the other compliance-related.
Procedural codes must reflect what was actually performed, not what was planned or discussed. Payers compare CPT selections against historical patterns, documentation, and diagnosis codes more closely than many practices realize.
Accuracy here protects both reimbursement and audit exposure.
Step 5: Adding HCPCS Level II Codes When Needed
HCPCS codes enter the picture when services involve supplies, DME, injections, or non-physician items.
The challenge isn’t identifying when HCPCS applies. It ensures proper linkage between HCPCS, CPT, and ICD-10 codes. Supplies billed without a medically necessary procedure, or injections without clear documentation, are common denial triggers.
Units, dates, and payer-specific rules matter more here than many teams expect.
Step 6: Applying Modifiers Correctly
Modifiers quietly influence payment more than any other element of medical claims submission. When used correctly, modifiers clarify services and prevent inappropriate bundling. Used incorrectly, they almost guarantee denials or payment delays.
Modifiers like -25, -59, RT, and LT must be supported by documentation and applied with intent. Overuse of it is flagged, misuse is penalized, and omission can result in underpayment.
Step 7: Charge Entry and Claim Creation
Charge entry turns coded services into a claim. This step requires close attention to units, service dates, provider identifiers, and payer-specific billing rules. Errors introduced here often go unnoticed until rejection.
The practice management system doesn’t prevent mistakes by default. It reflects whatever data is entered. Accuracy at this stage determines how much work will be required later.
Step 8: Claim Scrubbing and Compliance Checks
Claim scrubbing acts as the last internal checkpoint before submission. Scrubbers review claims against payer edits, the National Correct Coding Initiative (NCCI) rules, coverage policies, and code compatibility. Automated tools don’t replace expertise, but they reduce preventable errors. Practices that rely solely on post-denial fixes usually pay for it in delayed cash flow.
Step 9: Electronic Submission Through a Clearinghouse
Most medical claims now move through clearinghouses using EDI formats like 837P and 837I. Here, clearinghouses validate formatting and basic compliance before claims reach payers.
As a result, rejections at this stage usually point to technical issues like missing fields, invalid codes, and formatting problems, rather than medical necessity. This is an important distinction, because rejections never enter payer review, whereas denials do.
Step 10: Payer Adjudication and Decision
Once accepted, claims enter payer review, then insurers evaluate coverage, coding accuracy, medical necessity, and contractual terms. Results vary a lot and may include full payment, partial payment, denial, or a pending status that requires additional information.
The Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA) explains how the claim was processed and why payment was adjusted.
Step 11: Posting Payments and Adjustments
Payment posting closes the loop. ERAs must be posted accurately, including contractual adjustments, payer payments, and patient responsibility. Errors here distort financial reporting and patient balances.
Write-offs should follow contractual rules, not assumptions. Transparency at this stage prevents downstream disputes.
Step 12: Managing Denials and Resubmissions
While denials are inevitable, repeated denials are not. Typically, most denials trace back to the same root causes: eligibility issues, coding errors, missing documentation, or authorization failures. For this reason, correcting and resubmitting claims requires precision and timeliness.
In practice, improvement happens by tracking denial patterns. Without that visibility, the same mistakes repeat quietly.
Tips to Improve Your Claim Processing Workflow
Improving medical claims processing involves implementing repeatable practices that reduce coding errors and prevent claim denials. Most organizations achieve significant gains without a full system overhaul by focusing on targeted, high-impact improvements.
Use Coding Software and Automated Scrubbing Tools
Automated coding software and claim scrubbers flag issues such as NCCI conflicts, modifier mismatches, and coverage gaps before claims are submitted. These tools support coders and enhance accuracy, particularly during high-volume periods.
Train Staff Regularly on ICD-10, CPT, and HCPCS Updates
Regular training keeps coding teams updated on evolving ICD-10, CPT, and HCPCS rules. Short, consistent refresher sessions improve compliance and reduce errors in high-impact areas like medical necessity, modifiers, and E/M guidelines.
Audit High-Risk Claims More Often
Focus audits on high-risk claims, such as E/M visits, DME, and injections, rather than auditing all claims equally. Targeted reviews prevent costly denials and maintain claim accuracy.
Maintain Payer-Specific Rules and Prior Authorization Logs
Document and track payer-specific guidelines and authorization requirements. Accessibility to these logs improves consistency, reduces guesswork, and increases the clean-claim rate.
Common Errors That Delay Medical Claims Submission
Most delays in medical claims submission don’t come from complex coding scenarios. They come from familiar, repeatable issues that slip in during busy days and tight handoffs. The frustrating part is that many of these errors are easy to prevent, once you know where to look.
Below are the most common trouble spots that slow down the claim submission process in medical billing, even in otherwise well-run practices.
Incorrect Demographics
This is where delays often begin, quietly.
A misspelled name, an outdated insurance ID, or the wrong subscriber relationship can stop a claim before it ever reaches the payer. These aren’t clinical errors, but payers treat them just as seriously.
Demographic accuracy sets the tone for the entire claims process flow. When it’s off, everything else stalls.
Missing Prior Authorization
Few issues cause more avoidable denials than missing authorizations.
Services that require approval but move forward without it almost always come back unpaid. By the time the denial appears, the window to fix it is often narrow, or closed entirely.
Authorization checks don’t feel urgent at the front end. They become very urgent later.
Incorrect ICD–CPT Linkage
Even when codes are technically correct, how they’re linked matters.
If the diagnosis doesn’t clearly support the procedure, payers question medical necessity. This is one of the most common reasons claims get denied during medical claims processing.
A quick diagnosis–procedure review before submission can prevent weeks of back-and-forth.
Duplicate Billing
Duplicate billing rarely comes from intent. It usually comes from system timing, charge reposts, or manual workarounds.
Payers flag duplicates quickly, and once they do, the claim enters a slower review path. Even legitimate services can get caught in the delay.
Clear charge tracking and clean workflows help avoid this bottleneck.
Modifier Errors
Modifiers carry more weight than they appear to.
A missing modifier, an incorrect one, or a modifier used without proper documentation can turn an otherwise clean claim into a denial. Payers apply modifier rules strictly, and inconsistencies don’t go unnoticed.
Regular modifier reviews and payer-specific guidance reduce this risk significantly.
Conclusion
Clean medical claim submission improves accuracy, reduces denials, and enhances revenue cycle efficiency. Stable claims processing benefits finance teams and all downstream users who rely on accurate data and consistent workflows.
Key practices for effective claim submission include:
- Verify patient demographics to ensure accurate billing
- Align ICD-10 codes with CPT and HCPCS for proper medical justification
- Apply payer rules consistently to minimize denials and rework
If your team is seeing repeat denials, delayed payments, or growing rework in the claims queue, it may be time to look beyond manual fixes.
See how PacePlus supports cleaner medical claims submission through real-time validation, embedded coding guidance, and denial intelligence.
Frequently Asked Questions (FAQ)
What is the medical claim submission process in healthcare?
The medical claim submission process is the workflow that turns patient care into reimbursement. It starts with registration and insurance verification, moves through coding and claim creation, and ends with payer adjudication and payment posting. When each step aligns, claims move predictably instead of stalling in rework.
Why are CPT, HCPCS, and ICD-10 codes important for claim submission?
These codes work together to tell a complete story. CPT and HCPCS explain what was done, while ICD-10 explains why it was medically necessary. If one part doesn’t align, payers often pause or deny the claim. Tools like PacePlus help surface these mismatches early, before they reach adjudication.
What information is needed before submitting a medical claim?
At a minimum, you need accurate patient demographics, verified insurance coverage, complete provider documentation, and correctly assigned codes. Prior authorizations and payer-specific rules also matter more than many teams expect. Missing details at this stage usually surface later as denials.
What is the difference between a rejected and a denied claim?
A rejected claim never makes it into the payer’s system; it fails basic formatting or data checks and is sent back almost immediately. A denied claim, on the other hand, is reviewed by the payer and then refused based on coverage, coding, or medical necessity. Rejections are usually quicker to fix. Denials take more time, documentation, and sometimes appeal work.
How does a clearinghouse help in the claim submission process?
A clearinghouse acts as a buffer between the practice and the payer, like checking claims for formatting issues and basic compliance before they ever reach the insurer. A clearinghouse review catches missing fields, invalid codes, or mismatched data that would otherwise lead to quick rejections.
What are the most common reasons medical claims get denied?
Denials most often stem from eligibility issues, incorrect or incomplete coding, missing documentation, or authorization failures. Modifier misuse and ICD–CPT mismatches also appear frequently. That’s why denial tracking and real-time checks, like those built into PacePlus, make such a difference.
How long does it take for a medical claim to be processed?
Processing time depends on the payer, claim type, and how clean the submission is. Some electronic claims are resolved in a few days, while others take several weeks, especially if they’re pending or partially paid. Claims with fewer errors move faster; there’s no real shortcut around that. Teams using real-time validation tools such as PacePlus tend to see shorter turnaround because fewer claims need rework.
How can medical practices speed up the claim submission process?
Speed usually improves when accuracy improves. Verifying insurance early, strengthening documentation, and using automated claim scrubbing tools reduce rework. Tracking denial patterns also helps teams fix problems once instead of repeatedly.
What should you do if a medical claim is denied?
Start by reading the denial reason carefully, not just the code, but the context behind it. Many denials trace back to the same issues: eligibility gaps, ICD–CPT mismatches, or modifier errors. Correct the root issue, then resubmit or appeal within the payer’s timeframe.
How can coders ensure accurate ICD-10 coding for claim submission?
Accurate ICD-10 coding begins with strong documentation and ends with choosing the most specific code that the note truly supports. Coders should pause to confirm that the diagnosis clearly justifies the procedure, not just that the codes are technically valid. Regular review of payer feedback helps sharpen this judgment over time. Platforms like PacePlus reinforce accuracy by flagging weak ICD-10–CPT linkages before claims ever reach the payer.
