Adjudication
Adjudication is the process a payer uses to evaluate a submitted claim against the patient's coverage, benefits, and policy rules to decide whether and how much to pay. The outcome, whether payment, denial, or adjustment, drives the next revenue-cycle action.
What is adjudication?
Adjudication is the process a payer uses to evaluate a submitted claim against the patient's coverage, plan benefits, and policy rules in order to decide whether and how much to pay. The payer checks eligibility, medical necessity, coding, and contract terms before reaching a determination.
The result is communicated back to the provider, usually on a remittance advice, and may be a full payment, a partial payment, an adjustment, or a denial. Each outcome carries a reason that explains the payer's decision.
What role does it play in the revenue cycle?
Adjudication is the hinge between submitting a claim and getting paid, and its outcome dictates the next revenue-cycle action, whether posting a payment, appealing a denial, or billing the patient. Understanding the reason codes is what turns a result into the correct follow-up.
For surgery centers, where reimbursement depends heavily on prior authorization and precise coding of the procedure, adjudication is where those upstream steps are tested. Claims that were not properly prepared tend to surface here as denials or reduced payments.
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