Electronic Claim Submission

We know that "Medical Billing is a Process of Submission of Bills/Claims to the Insurance Company in a specified format for the service rendered (for the treatment given) by the doctor for the patient."  And also we know that the most widely used form is Health Care Finance Admin-1500 designed by the Health Care Financing Administration (CMS 1500 or HCFA 1500).

But instead of Sending in Paper form, We can also use Electronic transmission of claims. Here are the advantages sending the claim electronically instead of paper claims.

1. Electronic Submission of Claims (Electronic Data Interchange or EDI) can help reduce paperwork, eliminate printing and mailing expenses, and improve claim   payment accuracy.
   
   
2. No concerns of claims being lost in transit, no concerns regarding data entry errors being made by insurance staff while processing claims, less rejections,   less turnaround time between the process of data and process of claim by the insurance company.
   
   
3. When you file an electronic claim, you also save valuable time. When a paper claim is filed, the U.S. mail may take a few days to deliver the claim. The  insurance company must digitize the information, then it must process the claim and, finally, the company has to mail the statement and reimbursement    back to you. With electronic claims, you send the claim through Internet connection. This takes as much time as picking up the telephone and calling the  company. The insurance carrier instantly receives the claim, the claim is already digitized and the company can process the claim immediately.
   

Now you may ask a  question, since Electronic claim transmission is acceptable and useful, then why do we need still to use CMS 1500 to send the claims.The answer is : we cannot completely wipe off the Paper format, because there are some scenario, you need to send only by paper claims. We will see later about that scenario