Explaining Healthcare Reimbursement

August 2, 2022

A healthcare reimbursement guide to share with your patients.

For Providers

If you’re a provider, you probably already know how healthcare reimbursement works. But that doesn’t necessarily make it easy to explain it to your clients. The system is convoluted, and chances are you’ve met a client’s confused, “How does healthcare reimbursement work?” with a long-winded and difficult response at least once. So, we created this healthcare reimbursement explainer to clarify things as much as possible and help you edify your clients about the health insurance claim process. Feel free to use it as a reference before speaking with your clients about the process, or to simply send them this guide.  

Step 1: Documenting the Procedure

Before anyone can be paid, providers need to record information about their client’s medical history and current presenting problem, as well as their thoughts and reasoning for a potential diagnosis. The information documented can range from personal details like name and address to medical jargon like International Classification of Diseases (ICD)-10 codes that name diagnoses as well as Current Procedural Terminology (CPT) codes that describe procedures and services and help insurance payers standardize their payment plans.

This step is important for your clients to know about because it helps ensure they aren’t getting ripped off. The reimbursement system, while certainly not perfect, is designed to be as airtight as possible to prevent misuse. A client who doesn’t understand this might think they’re being overcharged or underpaid due to a misinterpretation of their benefits, but in reality, regardless of whether you have the best health insurance plan on the market or a low-cost plan with a high deductible, every CPT code corresponds to a payment rate denoted by the insurance payer. Your client can find this in their Explanation of Benefits (EOB).

Step 2: Submitting the Forms

In many cases, providers submit claims directly to insurers. But they may also go through a third-party like a clearing house, an institution that helps them check for errors and standardize the claims to increase their chances of being accepted. In the event the provider is using a superbill, they have the option to submit it directly to insurers, or give it to their client to submit on their own. But be careful when giving your clients superbills to submit; superbills given to clients are rarely reimbursed. Clients don’t have the advantage of using a clearing house, and they can easily become overwhelmed by the rigamarole of the insurance claims process. 

The difficulty of claims submissions is probably the most important point to drive home when speaking with your clients about their superbills, because so many clients give up after their first claim is rejected. Help them understand that refiling is a part of the process, and you’ll likely save them money. 

Step 3: Reviewing the Insurer’s Response

After the insurance payer receives a claim, they decide whether to reimburse the claim in total, in part, or not at all. Insurers use remittance advice codes to convey their reasoning behind healthcare reimbursement rejections. Whoever filed the claim, whether it’s the provider or the client, has to review these codes to determine if resubmission is merited. Sometimes, a slight error in the claim can be corrected, and the claim can be resent without much hassle. But in other cases, insurers give more complex reasons for rejections. They might reject a claim due to the timing of the service rendered, the grouping of non-compatible services into a single bill, noncoverage of said services, or any number of reasons, leaving the filer wondering whether to refile, and if so, what to correct. 

It’s helpful to remind your clients that healthcare reimbursement is often a shared responsibility between insurers and clients, especially when filing for out-of-network benefits. Many clients will owe a copayment, coinsurance, and/or deductible amount that can leave them confused. 

Optional: Skip All Three Steps

Here at Superbill we make sure to refile claims repeatedly until your client receives the maximum allowable amount from their insurer. Persistence is key in this system; Superbill won’t stop until your client gets the reimbursement they deserve. Navigating the health insurance marketplace is easier with a sidekick. Save yourself time and let Superbill fight for you.

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This post was written and researched by
Harry Gatlin

Harry (he/him/his) is a freelance writer and web designer who has worked in the health and tech spaces for over 2 years now. He is passionate about the power of language to make complex systems like health insurance simpler and fairer. He received his BA in English Literature from Williams College and his MFA in Creative Writing from The University of Alabama. In his spare time, he writes fiction and obsesses over Bob Dylan. You can reach him at harrison.gatlin@thesuperbill.com.

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