What Is Claim Scrubbing?

What is claim scrubbing?

Claim scrubbing is the process of finding and eliminating coding errors on medical claims before practices submit them to insurers. Claim scrubbers, whether automated or manual, verify the data on medical claims before submitting them to payers.

To understand claim scrubbing, it’s helpful to learn how the medical revenue landscape works. There are three main steps:

• Providers submit their bills.
• Medical coders code those bills into concise reports.
• Medical billers fill out two medical claim forms — CMS-1500 and UB-04 — for insurers.

Depending on the size of their organization, medical billers receive between dozens and thousands of bills daily, and they have little time to review the accuracy of their reports. If a claim is ultimately denied or suspended due to an error, the medical billers must repeat the entire process, creating cash flow problems and increasing the company’s time and labor overhead costs.

Claim scrubbers are usually part of a third-party medical billing service. It’s their job to audit medical bills to ensure accuracy. Scrubbers are used in most healthcare facilities, including hospitals, dentists, doctor’s offices and outpatient centers. Some scrubbers ensure forms are filled in correctly, while others conduct a more meticulous audit for accuracy.

Step-by-step claim scrubbing process and validation checkpoints

Modern claim scrubbing follows a systematic workflow with specific validation checkpoints to ensure compliance and accuracy, including pre-submission validation, coding accuracy review, regulatory compliance checks, payer-specific requirement verification and final review.

1. Pre-submission validation

This step typically occurs before or during a patient’s appointment and includes:

• Patient demographic verification: Confirms patient identity, address, date of birth, and insurance information.
• Eligibility verification: Real-time checks against payer databases to confirm active coverage.
• Authorization verification: Validates prior authorizations and referrals are in place.

2. Coding accuracy review

Once a patient has been seen, codes related to their diagnoses, symptoms, and procedures are generated as part of the claim. It’s critical that these codes are accurate before going to payers, and a review of them includes:

• ICD-10-CM diagnosis code validation: Ensures codes are current, valid, and appropriately sequenced.
• CPT/HCPCS procedure code verification: Confirms correct procedure codes and modifiers.
• Code relationship analysis: Checks for appropriate diagnosis-to-procedure code matching.

3. Regulatory compliance checks

Healthcare is a highly regulated space and compliance is a top priority at all stages, including in claims scrubbing. Regulatory compliance checks include:

• National Correct Coding Initiative (NCCI) edits application: Prevents billing of inappropriate code combinations per CMS NCCI guidelines.
  
• Medical necessity validation: Ensures services are medically necessary based on diagnosis codes.
• Bundling and unbundling review: Prevents incorrect separation or combination of services.

4. Payer-specific requirements verification

Each payer also has their own set of policies and requirements that need to be met in order to result in prompt (and ideally full) payments. The verification step includes:

• Coverage limitation checks: Validates services are covered under specific plans.
• Frequency limitations: Ensures services don’t exceed allowable frequencies.
  
• Place of service verification: Confirms appropriate location codes.

5. Final data integrity review

Final review of claims prior to submission is designed to ensure all details are correct. This step includes:

• Completeness check: Ensures all required fields are populated.
• Accuracy validation: Reviews dollar amounts, units of service, and dates.
• Format compliance: Confirms submission meets electronic format requirements.

How does a claim scrubber work?

There are two kinds of claim scrubbers: those that audit for complete information and those that audit for accuracy. Both types check for errors after reports have been created and are ready to be submitted but before medical claims are filed with insurers. If a claim scrubber finds a mistake, they’ll flag it so a medical coder or biller can fix it.

You also may have heard the term “charge scrubber.” A charge scrubber is similar to a claim scrubber, but there’s a difference: Whereas a claim scrubber audits medical billing reports before submitting them to an insurer, a charge scrubber audits reports before the medical biller even compiles the claim.

Claim scrubbers and charge scrubbers ultimately provide the same benefits. However, charge scrubbers flag billing errors before claims have been created, while claim scrubbers flag errors after they’ve been created.

Manual vs. automated claim scrubbers

Claim scrubbing can be completed by manual claim scrubbers or automated claim scrubbing software.

• Manual claim scrubbing: Manual claim scrubbing is performed by employees or contractors who handle medical coding. If you opt for a manual claim scrubber, make sure to invest in an expert. While your staff may be experienced, effective claim scrubbing requires extensive training. Proper medical billing and coding entails knowledge of over 3,000 medical codes, medical terminology and HIPAA regulations. You’ll need someone with robust credentials who is willing to stay updated in the industry.
• Automated claim scrubbing: The industry is shifting toward automated claim scrubbing performed by software. Automated solutions scrub claims quickly and accurately. They can catch errors that manual scrubbers may miss, thus lowering your chances of denied claims and bolstering your organization’s credibility. The software can be acquired through a one-time installation, or it can be incorporated into your medical practice management solution.

Why is claim scrubbing important?

Claim scrubbing is essential for practices and patients and should be integral to any medical billing process. Automated claim scrubbing can bring your practice the following benefits:

• Accurate claims: Insurers receive accurate claims the first time around, resulting in fewer denials and easier access to reimbursement.
• Expedited payments: Because denied payments slow down the reimbursement process, accurate claims result in expedited payments, thereby boosting revenue and increasing cash flow.
• More time for crucial business tasks: With a smoother billing process, the organization and its employees can dedicate more time to marketing, patient care and research.
• Improved client relationships: Client patients are likely to be pleased with their timely payments and are more likely to remain with the medical practice.
• Improved payer relationships: Payers appreciate meticulous reports and spend less time and effort rectifying faulty claims, resulting in reduced overhead.

Claim scrubbing scenarios and solutions

These scenarios are common examples of how claims scrubbing may catch errors prior to claims submission.

Scenario 1: Incorrect diagnosis code linkage

• Error: Provider submits CPT 99213 (office visit) with ICD-10 code Z00.00 (general health examination).
• Scrubbing solution: System flags inappropriate code combination. Preventive visit codes should be used for routine examinations.
• Resolution: Correct to CPT 99395 (preventive visit) or change diagnosis to support sick visit.
• Financial impact: Prevents claim denial and payment delay.

Scenario 2: Missing prior authorization

• Error: Advanced imaging study (MRI) submitted without required prior authorization.
• Scrubbing solution: Real-time eligibility check identifies authorization requirement.
• Resolution: Obtain authorization before service or notify patient of potential financial responsibility.
• Financial impact: Prevents claim denial and potential write-off.

Scenario 3: NCCI edit violation

• Error: Billing both comprehensive and component procedures for same anatomical site.
• Scrubbing solution: NCCI edit system identifies mutually exclusive code combinations.
• Resolution: Bill only the comprehensive procedure code with appropriate modifier if applicable.
• Financial impact: Prevents improper payment and potential audit exposure.

These scenarios reflect common issues identified in AHIMA’s Standards of Ethical Coding and industry best practices.

Claim-scrubbing terms you should know

Familiarize yourself with these standard claim-scrubbing terms:

• Superbills: Superbills are itemized lists of services provided to the patient; they’re the primary source of claim creation.
• CMS-1500 and UB-04: CMS-1500 and UB-04 are the most common medical forms for compiling patient case histories and billing claims.
• Claim-editing tools: Claim-editing tools, or claim-scrubbing software solutions, are integrated with electronic health record or practice management systems to ensure claims are billed at the contracted amount, coded accurately and processed as quickly as possible.
• Charge review rules engines: Charge review rules engines review, correct and apply millions of coding rules to submitted claims to ensure billing accuracy.
• Clean claim rate: The percentage of claims that are successfully processed and paid on the first submission without rejections, denials, or requests for additional information. Industry benchmarks suggest clean claim rates should exceed 95 percent for optimal revenue cycle performance.
• First-pass rate: The percentage of claims that pass initial payer edits without being rejected or denied. Leading practices achieve first-pass rates of 98 percent or higher.

Some common reasons for claim rejections include missing or incorrect diagnosis codes, lapsed patient membership, invalid member IDs, and omission of the admission date on an inpatient claim.

Codes used in medical claims

Medical coding is incredibly complicated, so it’s no wonder coding mistakes can happen. Here’s a look at some of the issues involved:

• ICD-10-CM codes: Medical coders must be thoroughly acquainted with approximately 70,000 diagnosis codes in the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM), the official diagnosis code system in the U.S. These codes are updated annually, with significant changes requiring ongoing education for coding professionals, according to AHIMA certification requirements.
• HCPCS and CPT codes: Coders must know the thousands of HCPCS (Healthcare Common Procedure Coding System) and CPT (Current Procedural Terminology) codes. CPT codes are updated annually by the American Medical Association, with approximately 10,000+ active codes requiring mastery by certified coders.
• Knowledge of medical terminology: All agents must be familiar with medical terminology and anatomy to understand what they’re reading.
• Procedure and specialty codes: Coders must know the most frequently used procedures and specialty codes and stay abreast of coding changes.
• Code permutations: Code permutations must accurately and thoroughly represent a patient’s visit as described in the original surgical records, office notes, laboratory notes or pathology findings.
• Detailed visit data: Coders’ reports must include personal details about the patient, healthcare provider, individual physicians and medical staff, and all diagnoses, procedures, treatments and tests that have been carried out.
• HIPAA compliance: All documents must be Health Insurance Portability and Accountability Act (HIPAA) compliant.
• Regulatory updates: The Centers for Medicare & Medicaid Services (CMS) updates NCCI edits quarterly, requiring ongoing system updates to maintain compliance with current NCCI guidelines.

Because of coding’s staggering complexity, most practices use healthcare claims management software rather than manual methods to process their claims. Ultimately, automated solutions save healthcare organizations time and money, resulting in more motivated employees and a better patient experience.

Leah Zitter contributed to this article.