Although a claim may be fully valid, one small error can still cause a rejection, delay, or additional work for your billing team. Missing patient information, the incorrect codes, incorrect payer information, or incorrect billing data are all problems that can arise before a claim has even left your office.
This is where clean claims in medical billing is so crucial for healthcare providers. A clean claim is a claim that contains all of the information necessary for a payer to process the claim without requiring additional, preventable investigation or correction. According to the CMS’s definition, a clean Medicare claim is one which “does not require the contractor to seek out or develop information under CMS′s control not readily available or predictable before processing the claim.”
For a medical practice this means that having a strong clean claim process allows for a streamlined billing process, reduces preventable rework, and contributes to the more efficient functioning of the revenue cycle.
In this guide, we will cover: what clean claims are, why they’re important, the reasons claims become problematic, how claims are scrubbed, and what steps your practice can take to improve its billing process. We will also discuss how Noventra RCM can benefit healthcare providers through expert billing and RCM services.
What Are Clean Claims in Medical Billing?
Clean claims in medical billing refer to claims that have all required information and can be successfully processed by the payer without unnecessary correction or manual intervention.
According to the CMS, claims are run through several layers of editing. This includes basic HIPAA-format and implementation guide edits, as well as edits related to Medicare’s billing rules and coverage policies. Identifying problems within any of these steps can result in claim denial or rejection.
Essentially, a clean claim is a claim where all required information is accurate and complete to begin with.
What information must be considered a clean claim (this varies by provider, service, claim type, and payer) can include:
Patient demographics
Payer’s claim information (e.g. Subscriber information and member ID numbers)
Provider’s information (including NPI)
Date(s) of service
Place of service
Diagnosis codes
Procedure codes
Modifiers
Charges and amounts billed
Units reported
Authorizations and prior approval information where needed
There are specific needs of each claim, so not all of the above are always required, but they should all be accurate where needed. This is where the process becomes complex, and clean claims are not always just a data entry mistake.
What is a clean claim rate?
The clean claim rate is used by healthcare organizations to measure what percentage of the claims they have submitted were clean claims that will likely be reimbursed successfully.
There isn’t a single, agreed-upon standard to calculate a claim’s clean claim rate; each practice must develop its own criteria and measure the same data consistently. Practices may measure their clean claims rates by the percentage of claims that successfully complete internal pre-submission edits or are able to be billed without needing further information.
Simply put:
Clean Claim Rate = Number of clean claims submitted/Total Claims Submitted X 100
If you submit 1,000 claims and 950 fit into your definition of clean claims, your rate would be 95%. However, the definition should be clearly defined as the distinction between rejected claims, denials, need for rework, etc. Will not be the same for all organizations.
Why Are Clean Claims So Important?
The level of quality in your submitted claims may extend beyond the boundaries of your billing department.
Rejection of a claim due to an obvious error may require rework, resubmission, follow up, or additional investigation that could lead to delays in payments. The CMS’s report has indicated that electronic Medicare claims go through both front-end and secondary edits; this could potentially lead to rejected or denied claims if there is an error.
Reasons to prioritize clean claims include:
Avoidable Rework Can Be Reduced
Claims rejected due to relatively simple, avoidable errors will require staff to spend time pinpointing the issue and correcting it. A well-designed claim process can prevent many of these.
Faster Payment Processing Can Be Expected
Claims that pass required edits have a better chance of moving through the payer’s billing system without being sent back for corrections. This does not guarantee timely payment or approval; however, it does eliminate potential delays.
Supports Improved Cash Flow
A medical practice often relies on prompt reimbursement to manage staff salaries, equipment, technology, and other expenses. Preventable billing complications will unnecessarily prolong revenue cycle times.
Administrative Burden Is Reduced
Every problem claim needs attention. Removing unnecessary issues for your billing staff helps them reallocate more of their time to tasks like denial management, AR follow-up and account resolutions.
Contributes to a Healthy Revenue Cycle
Claims are a building block of the RCM; each part of the process from registration, coding, documentation, payment posting and follow-up is directly linked. A quality claim process starts at identifying where issues arise.
What Causes Claim Problems?
While claim mistakes may seem insignificant individually, it is a common error that is the culprit when problems arise. Several issues can cause a claim to fail to be a clean claim:
Incorrect patient demographic data
Simple demographic errors like incorrect name spelling, birth dates, or incorrect member IDs can impede processing. Likewise incorrect subscriber information or expired insurance data can be a costly mistake to fix later in the process. Patient registration is a critical step in clean claim processes.
Incorrect insurance information
Checking a patient’s insurance information prior to claim submission is essential. Incorrect insurance payer name, member ID, group number or other insurance data, will all add time delays and potential complications for the billing department. Health practices should implement an eligibility check before submitting claims for maximum efficacy.
Incorrect coding
Coding is critical to the medical billing process. Submitting the incorrect CPT, HCPCS, or ICD-10-CM codes can cause claim issues, and CMS states it is essential to have consistent and orderly claim processing. CMS’s National Correct Coding Initiative includes specific edits to prevent improperly reimbursed coded pairs or units.
Missing or incorrect modifiers
Modifiers provide supplementary details about services, therefore, using the wrong modifier, forgetting a needed modifier or submitting a modifier improperly will cause claim complications. The specific required modifier should always be verified by according to appropriate guidance.
Unauthorized service
Some services require a patient to have prior authorization from their insurance carrier,depending on payer and coverage. An improper prior authorization or failure to include authorization codes will cause claim problems. The need for authorization should always be determined and confirmed prior to the billing cycle.
Incorrect provider information
A claim may only have errors that are part of the provider information. Incorrect NPI, taxonomy number, or provider and rendering provider ID numbers will cause issues within payer claim processing.
Incorrect units or charges
The staff should always confirm that the units billed are correct for the service given, as well as the cost charged. CMS’s MUE program sets units of service edits for common HCPCS codes to help prevent inaccurate reporting.
These are only some of the common reasons that claims turn into problematic.
What is claim scrubbing?
Claim scrubbing refers to the process of checking claims for potential issues before they are submitted to the payer.
Typical issues addressed during claim scrubbing might include:
Patient demographics
Insurance and provider information
Diagnosis and procedure codes
Modifiers and units
Claim formatting requirements
Payer-specific policies
Authorization status
Relationships between codes
The primary objective is to catch potential problems before the claims ever reach the payer.
CMS delineates “front-end and other claim edits” as a component of its Medicare claim processing system.
For practices, this could take the form of an in-house or software-based claim scrub. Note that this should not be considered a substitute for qualified billing and coding review; software can only do so much in terms of identifying potential errors. Billing professionals are needed to make crucial decisions based on the specific coding, documentation, payer requirements, and services rendered.
How can medical practices improve clean claim rates?
Clean claim rates are improved by process, not by a single solution. Consider these practical steps:
- Patient Data Verification: Accuracy starts with efficient registration. Ensure all patient demographic and insurance information is complete and accurate prior to billing.
- Insurance Eligibility Verification: Because insurance information varies, maintain a consistent verification process to screen for incorrect member IDs,inactive coverage, and similar issues prior to submitting claims.
- Accurate Medical Coding: Diagnosis and procedure codes must be a precise representation of what’s documented in the medical record. Follow pertinent coding conventions and payer guidelines.
- Documentation Review: Whether claims are technically correct with regard to coding rules, they may require supplemental documentation to meet specific requirements.
- Modifier and Unit Check: Review modifiers and units for accuracy. This is especially true for services subject to specific coding rules or edits by the payer.
- Authorization Requirement: If an authorization is necessary, ensure that the supporting information is available and properly linked with the service.
- Implement Claim Scrubbing: An automated claim scrubber can flag many mistakes prior to submission. These checks vary depending on the software, clearinghouse, billing system, and payer.
- Identify Recurring Rejection Patterns: Don’t approach claim corrections individually; seek out patterns.
Why is the same issue recurring?
Are staff misentering insurance data?
Are specific modifiers missing?
Are any particular payers continually rejecting claims?
Is the same service generating more errors than average?
Is a single department responsible for many of the mistakes?
Addressing the root cause of errors produces better, longer-lasting results than repeatedly fixing individual claims.
- TrainBilling and Front-Office Staff: Billing starts before the claims department ever sees the file. Each step, from registration and scheduling through clinical documentation, coding, and submission, influences claim quality. Regular training should inform staff about how their efforts impact subsequent stages of the revenue cycle.
- Track Claim Performance Metrics: Regularly monitor key billing statistics, which may include:
- Clean Claim Rate
- Denial Rate
- Rejection Rate
- Days in AR
- First Pass Claim Performance
- Average Time to Payment
- AR Aging
- Top Denial/Rejection Reasons
The goal is to focus on the metrics that help identify problems and inform better practices, rather than trying to track absolutely everything.
Clean vs. Denied Claims
These are similar yet distinct terms.
A clean claim is usually one that has met processing requirements without the need for further review or correction.
A denied claim is one for which the payer made a non-payment decision based on the provided information (claim, coverage, coding, documentation, or other rules).
Rejection, or rejection at front-end, can occur before a claim reaches its final adjudicaton based on submission errors.
CMS explains that Medicare edits will ultimately determine whether a claim is rejected or denied based on the type of problem encountered.
Understanding the difference is important because the appropriate response varies. Rejections may require resubmission after correction, while denials may necessitate a careful review before appealing or submitting corrective information according to the payer’s specifications.
The impact of clean claims on revenue cycle management
Clean claims can be seen as the beginning of the revenue cycle process:
Patient Registration> Eligibility Verification> Documentation> Coding> Claim Scrubbing> Claim Submission> Payer Processing> Payment Posting> AR Follow-Up
Mistakes made early on can have a ripple effect down the line. Incorrect insurance can lead to rejection. Bad coding will result in denial. Unnecessary follow-up can be sparked by missing authorizations. Improving the claim submission process therefore streamlines the entire revenue cycle.
CMS notes that claims, along with other financial transactions between provider and payer, can be exchanged electronically using EDI (Electronic Data Interchange), which simplifies this exchange.
The main takeaway: think of clean claims as an integral part of a structured revenue cycle, not an end point.
Consider Professional Billing Support when…
The majority of practices have the technology to process claims, but many lack the resources, time, or expertise of a dedicated internal billing team. Noventra RCM can help with claims in the event of:
Frequent rejections
Billing staff wasting time correcting easily avoidable errors
Difficulty tracking claim performance
Fragmented coding and billing workflows
A growing number of claim denials
Increasing AR
Insufficient time to monitor claim quality
Practice growth is overwhelming existing staff
If this sounds like your practice, Noventra RCM offers professional medical billing and RCM services designed to manage claims, billing workflows, and related RCM tasks more efficiently.
How Noventra RCM can help improve claim quality
An organized, holistic approach to the revenue cycle is essential for creating quality medical claims. Noventra RCM offers a suite of professional medical billing and RCM services, including medical billing, claims management, coding support, insurance verification, denial management, and AR follow-up to better align front-end practices with claim creation and subsequent follow-up.
If your billing team is struggling with the sheer volume of rework, Noventra RCM can provide your practice with comprehensive medical billing and RCM solutions.
The key is to focus on accuracy throughout the process, identify and correct issues early on, and establish a systematic approach to address errors rather than just processing each claim as it comes.
Frequent Questions
What are clean claims in medical billing?
In medical billing, clean claims are considered claims that have all the necessary details to move through a payer’s applicable workflow without unnecessary errors or follow-ups.
What is a healthy clean claim rate?
No ideal clean claim rate applies to all payers and practices. Your organization’s specific definition of a clean claim and how you measure it over time is what really counts.
What is claim scrubbing?
Claim scrubbing occurs when you review claims to identify potential errors prior to submission. This is typically a joint effort between the billing staff, coders, or technology solution providers like claim scrubbing software.
What can lead to claims denials?
Key culprits include incorrect or outdated patient demographics, outdated insurance information, errors in coding, missing or erroneous details on the claim, improper formatting, incorrect provider identifiers, and additional payer-specific nuances.
Can claim scrubbing reduce the risk of denial for every claim?
No, claim scrubbing can help to identify many common denial reasons before the claim reaches the payer but it cannot prevent every single potential denial from occurring.
How can your practice increase its clean claim rate?
Practices that follow clean claim requirements will experience fewer denials and rework. Key strategies include: verifying patient demographics, collecting outdated insurance prior to submission, proper coding techniques, proper documentation support for coding, double-checking for accurate units and modifiers, validating authorizations, utilising claim scrubbing solutions, tracking claim denial reasons and trends and staff training.
Conclusion
Good clean claim practices begin at the point of patient registration and are essential throughout the entire revenue cycle. From accurate and comprehensive medical information to well-defined and well-scrubbed claim forms, clean claims come from several touch points in the revenue cycle.
Improving clean claim rates can drastically reduce unnecessary rework within your revenue cycle and contribute to a much more organised medical billing process. Ultimately, instead of striving for a particular percentage of clean claims, it is more prudent to concentrate on understanding what causes these problem claims and making necessary adjustments.
Analyzing claim rejections, utilizing training to help your medical billers and coders do better, using advanced technologies, such as claim scrubbing software, for assistance in identifying issues early in the process will prevent issues from evolving into larger, more impactful revenue issues within your practice.
Your Practice Might Benefit from Professional Billing Services from Noventra RCM! For medical practices in need of greater support in claim processing and beyond, consider engaging Noventra RCM professional medical billing and Revenue Cycle Management (RCM) services for enhanced revenue cycle efficiency.
A robust claim process does not merely comprise submitted forms. It encompasses creating an organised system that generates accurate claims for overall practice well-being.